Fannie Mae-No Politics (FNMA)

[4Duxs]

Yes, I have read the article. The fannies only pay the Feds on the profit and capital value of the company. Because reserves for bad loans diminish profits they can be a place future profits can be realized. They would only hit profits if/when, through established accounting rule decisions, and mgt. approval to be released for reclassifying as profits. Double journal entry simplified: reduce reserves for bad loans, increase profits from performing loans. Yes, there could be releases at such a time as mgt. agreed to do it. No, the Feds can't touch those reserves until reclassified.