Fannie Mae-No Politics (FNMA)

[capitalismforever]

In 2008, the government believed the GSE's wouldn't be profitable going forward. Based on that assumption, they wrote down the carrying value of the DTA's. In 2010, they found out they were wrong and marked the DTA's back up. Also in 2010, new recognition rules were adopted. The companies started to consolidate VIE Trusts that were previously off-balance sheet entities. Because Fannie "controls" these entities, they're allowed to include them. However, they do not own them which is why they should be unconsolidated during valuation analysis.

I've reached my posting limit for today. Have a good day everyone.