Fannie Mae-No Politics (FNMA)

[Barrario]

It’s coming: Wanted to highlight three things for you this morning:

GSEs: As we’ve predicted for some time, it appears that the Trump administration (by way of the Treasury Dept and FHFA) is ready to begin taking action to release the GSEs from conservatorship, and soon. FHFA Director Otting made the latest in a series of remarks from administration officials suggesting that they will seek to recapitalize FNMA and FMCC, and won’t wait for FHFA nominee Mark Calabria to be confirmed before starting the process. We expect Treasury and FHFA to initiate administrative actions to amend the Preferred Share Purchase Agreement (PSPA), end the Net Worth Sweep (NWS), and finalize capital requirements, none of which requires congressional approval.