Fannie Mae-No Politics (FNMA)

[rekcusdo]

"A. ".....before the end of the Conservatorship occurs." There is no mention of timing rekcusdo."

I have to disagree with this obiterdictum. As I tried to infer in my post, Watt does state that the Conservatorship should not end until Congress completes housing reform. Of course, he doesn't say "next week" or "next month", but the combination of the 5 statements I posted in my last post...:

1. conservatorship is not a desirable end state and that Congress needs to tackle the important work of housing finance reform.
2. if reform is not done right
3. Congress can engage in the work of thoughtful housing finance reform before we reach a crisis
4. Although the Enterprises are not building capital while they are in conservatorship
5. We have made these ongoing conservatorships work thus far

...to me, clearly indicate that though Watt does not approve of Conservatorship, he feels it necessary until reform is done. I recall that he said in another statement (that I'm afraid I don't have time to locate at this moment) that although he doesn't approve of Conservatorship, he doesn't feel there is a good alternative at this time. To me, this seems to clearly propose his viewpoints around continued Conservatorship until reform occurs.

"B. "release from Conservatorship is not a good idea" There is no mention of release. "

I'm not sure what you meant by this. There are only 3 possible states of Conservatorship. The state of being in Conservatorship, the state of moving from Conservatorship to Receivership and the state of Release from Conservatorship. Receivership hasn't been discussed by Watt once, so that's out. Our entire topic has been about Watt's viewpoint on Conservatorship release. If he is saying "conservatorship is not a desirable end state", then all that is left is receivership or release. Therefore, release can be reasonably inferred. Unless I misunderstood your purpose of posting this response, of course.

"Short - https://www.c-span.org/video/?c4498579/fhfa-director-mel-watt-future-fannie-mae-freddie-mac

So, by his words, he does not see the FHFA (Watt) ending the conservatorship, releasing the GSEs. Instead, he digs in and focuses on handling what happens day by day without considering the future too much beyond giving a warning that the legislators better hurry up because the GSEs are approaching an iceberg as he did in February 2016.

Watt sees his responsibility as maintaining the GSEs in the conservatorship while waiting for the legislators to come up with a reform law that will tell him what to do, whatever that may be. "

First, I disclose that I watched the short version. If there is more on the long version, let me know. I'm at work and can't watch the long version right now. Second, this was a comment he made in 2014. A lot has happened in the last 2 years, so I do need to take his 3 year old comments with a grain of salt. Third of all, the first half of his statement seems to be that times change, and he doesn't know what the future will be like. Furthermore, he made it clear that his responsibility is not to shareholders, but to taxpayers (which seems partially shocking to me, but it is what it is). Lastly, and perhaps most importantly, I don't see that his comments in the video you posted as contradicting what I posted in my post. My post is basically suggesting that Watt does not want to release the Conservatorship as long as he perceives the companies in danger. He made it clear in 2016 that to get out of danger, he expects Congress to create housing reform. His post in 2014 does not contradict his statements in 2016 or the logic behind my post.

"Now that there is a new administration, there are new possibilities that will soon be revealed, more or less. "

I agree. New times are always coming and we shall see what changes. But, the one constant thru this entire Conservatorship is Watt's statements that he believes Conservatorship is a necessary evil and that housing reform is necessary in order to make the companies "risk-free". I don't personally believe that Watt will be on board with any action that moves to release the companies without Congressional reform. I therefore still put most of my hope in the court system. That being said, I do believe that Trump and Mnuchin can take actions unilaterally that would benefit shareholders...whether they will or not, I can't say for sure as there is no real comment to support what their actions would be.