Fannie Mae-No Politics (FNMA)

[capitalismforever]

The assets, and debt, you are referring to have always been carried as off-balance sheet accounts until FHFA changed the recognition rule. They are now stated on the books with the exception that they are labeled as "consolidated trust accounts". The footnotes further defines these assets and liabilities as owned by the mortgage originators. In bankruptcy, they are not the contractual obligation of the GSE's. These are simply the assets that allow g-fees to be raised, and it's debts are the instruments by which they raise them. The GSE's do not have an ownership claim to these underlying assets (mortgages), nor a contractual obligation to these debts (MBS). In the 10-k, Fannie Mae also provides their unconsolidated accounts which do not include those holdings. They make the distinction - on purpose. Unfortunately, and I see this time and time again, most investors do not read the 10-k. Hence, they are left to guessing based on one page articles they've read rather than reading 300 pages of financial data they don't understand.

As I've mentioned before, I invested because the tangible equity is worth more than the preferreds are selling as a whole, and because of the priority rule towards those claims.

My 15 post limit has been reached. Have a good day.