Fannie Mae-No Politics (FNMA)

[jeddiemack]

Obi,

I've cut and pasted the excel numbers below. It assumes the 5% rate is used from the start as per Cap's 491 and applying all the payments to interest / then to principal.

Once the loan is repaid; it pays Freddie $$ at 5% same as it was re-charged.

Old Old Old Old Old Old New New New New New
Date Rate Int Charged Draw Paid Bal Rate Int Recalc Draw Paid Bal
9/30/2008 10% - 13.800 0 13.800 5% - 13.800 0 13.800
12/31/2008 10% 0.167 30.800 0.167 44.60 5% 0.084 30.80 0.167 44.52
3/31/2009 10% 0.370 6.100 0.370 50.70 5% 0.185 6.100 0.370 50.43
6/30/2009 10% 1.149 - 1.149 50.70 5% 0.571 - 1.149 49.85
9/30/2009 10% 1.294 - 1.294 50.70 5% 0.636 - 1.294 49.20
12/31/2009 10% 1.293 - 1.293 50.70 5% 0.627 - 1.293 48.53
3/31/2010 10% 1.293 10.600 1.293 61.30 5% 0.619 10.600 1.293 58.46
6/30/2010 10% 1.293 1.800 1.293 63.10 5% 0.617 1.80 1.293 59.58
9/30/2010 10% 1.560 0.100 1.560 63.20 5% 0.736 0.100 1.560 58.86
12/31/2010 10% 1.603 0.500 1.603 63.70 5% 0.746 0.50 1.603 58.50
3/31/2011 10% 1.605 - 1.605 63.70 5% 0.737 - 1.605 57.63
6/30/2011 10% 1.618 1.479 1.618 65.18 5% 0.732 1.48 1.618 58.22
9/30/2011 10% 1.618 5.992 1.618 71.17 5% 0.723 5.992 1.618 63.32
12/13/2011 10% 1.655 0.146 1.655 71.32 5% 0.736 0.15 1.655 62.55
3/31/2012 10% 1.808 0.019 1.808 71.34 5% 0.793 0.019 1.808 61.55
6/30/2012 10% 1.808 - 1.808 71.34 5% 0.780 - 1.808 60.52
9/30/2012 10% 1.808 - 1.808 71.34 5% 0.767 - 1.808 59.48
12/31/2012 10% 1.808 - 1.808 71.34 5% 0.754 - 1.808 58.43
3/31/2013 Sweep 5.826 - 5.826 71.34 5% 0.730 - 5.826 53.33
6/30/2013 na 6.971 - 6.971 71.34 5% 0.667 - 6.971 47.03
9/30/2013 na 4.357 - 4.357 71.34 5% 0.588 - 4.357 43.26
12/31/2013 na 30.436 - 30.436 71.34 5% 0.541 - 30.436 13.36
3/31/2014 na 10.435 - 10.435 71.34 5% 0.167 - 10.435 3.10
6/30/2014 na 4.499 - 4.499 71.34 5% 0.039 - 4.499 (1.36)
9/30/2014 na 1.890 - 1.890 71.34 5% (0.017) - 1.890 (3.27)
12/31/2014 na 2.786 - 2.786 71.34 5% (0.041) - 2.786 (6.10)
3/31/2015 na 0.851 - 0.851 71.34 5% (0.076) - 0.851 (7.02)
6/30/2015 na 0.746 - 0.746 71.34 5% (0.088) - 0.746 (7.86)
9/30/2015 na 3.913 - 3.913 71.34 5% (0.098) - 3.913 (11.87)
12/31/2015 na - - - 71.34 5% (0.148) - - (12.02)
3/31/2016 na 1.740 - 1.740 71.34 5% (0.150) - 1.740 (13.91)
6/30/2016 na - - - 71.34 5% (0.174) - - (14.08)
9/30/2016 na 0.933 - 0.933 71.34 5% (0.176) - 0.933 (15.19)
12/31/2016 na 2.310 - 2.310 71.34 5% (0.190) - 2.310 (17.69)

Totals Totals 101.443 71.336 101.443 Totals Totals 12.416 71.336 101.443 Totals


If you can put this in a spread sheet you'll see the power of compounding!

At 5% - they'd owe Freddie $18Billion!

Fannie is done and recalculated the same way. It results in a higher amount owed.

If they do this you can forget that 30 year amort thing.

Next to your question of what happens. Well that's not up to me; but i couldn't imagine they'd not be free. Also, keep in mind the tax benefit of re-characterizing this as interest payments. Freddie would have to show the expense and the tax benefit of the interest expense.

This would be great.

JM

Enjoy.