Fannie Mae-No Politics (FNMA)

[Johnje]

People seem to be focusing on Watt and the NWS

I think that the bigger statements came from Mnuchin, he said:

1. Housing reform is a priority for this administration.

2. Mnuchin said that reform is a priority for him in the second half of the year

3. Mnuchin said the GSEs cannot stay in the current government control, it is not sustainable

4. Mnuchin said he has had several conversation with Watt about the GSEs.

5. And I think the biggest one people aren't talking about is... Mnuchin said he strongly prefers to have a bi-partisan bill to address the GSEs. To me strongly preferred means if congress doesn't act or can't get to a decision, he will act on his own.

6. Mnuchin said treasury has a large amount of money tied up in the GSEs and he needs to protect that

7. Mnuchin said that the taxpayers need to be protected first by private capital in front of any loss... Then he brought up FDIC insurance for banks as a similar back stop


All those things to me are extremely positive for some change occurring before the end of the year