Fannie Mae (FNMA)

[wzxchange]

Here's my short take:

Conservatorship will end in 2018 (after midterm elections). Note that Treasury and FHFA see "eye to eye" on housing finance reform goals, so whatever RBC recommendations made by FHFA will likely be adopted by Treasury. Stay tuned for that.

Since receivership is already essentially off the table, ending the conservatorship is very likely to mean ending the NWS and recap/release. The only hold up is how recap/release will happen. Will there be massive dilution of existing shareholders (don't forget that's what happened to AIG's original shareholders), and then an additional dilution due to Treasury's 79.9% stake? Or will there be some sort of "recap fee" on the industry (maybe for accessing the CSP?)?

Fannie and Freddie are here to stay. The question everyone on this board should be worried about is how much return do we see.