Fannie Mae-No Politics (FNMA)

[kthomp19]

However, it costs the government around $250 B per year to continue this credit facility.

I find this wording highly misleading. This implies a cash outlay (or non-cash expense) of $250B every year, when neither of those is true. Its true nature is a reserve fund that has only been tapped once (the Q1 2018 draws due to the DTA writedowns) since the inception of the NWS.

From the government's perspective, the risks of maintaining the backstop while the GSEs rebuild capital may be far greater than just putting them in the Waste Management corporate dumpster along with General Motors.

Fortunately, the government can get the best of both worlds by just having the companies issue massive amounts of shares. It both eliminates the backstop and preserves the 30-year fixed-rate mortgage.