Fannie Mae-No Politics (FNMA)

[bobstruths]

Yanks, I think your statement "6. The warrants have no relation to bankruptcy provision and likely would be worthless in any such case." is inaccurate in two ways. "Bankruptcy" is not discussed in HERA, but "Receivership" is. Bankruptcy gives a method to reorganize while Receivership does not. For FnF Receivership is the prescription for failure to meet obligations for a two month stretch (at least that's how I remember reading it). In a Receivership the warrants do have value to the tune of 80% of settlement value of the sales of all assets of FnF. These assets have substantial value, especially the portfolios and the intellectual property. It wouldn't take excessive losses to force Receivership, so market value of assets would be substantial and 80% would go to holders of the Warrants, thus assuring taxpayers would not have their interests wiped out, at the expense of equity shareholders by dilution.