Fannie Mae-No Politics (FNMA)

[camaro4me]

So which is it?

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YanksGhost
YanksGhostyesterday
Here's the interplay that is shifting the White House Plan back and forth with Treasury. The SPSPA must be basically gutted for an administrative reform to be at all comprehensive. No Congressional intervention is likely during election season. The SPSPA provides an approx. $250 B draw backstop which even the ABA cites as adequate to deal with another crisis. However, multi-family business extensions and risk from added >43% DTI loans (even if the patch ends) are new risk categories' "safety and soundness" seems to indicate a SIFI-sized capital standard at around $275 -300 B (5.5%) for emergence with new, private capital backing. Since any GOV guarantee requires Congress to approve, the higher capital standard helps bridge the timeline until/if a reform Act eventually passes. Nothing can change until the SPSPA is altered, and THIS appears to be the only way such action can meet the Administration's timelines for action. The GOV will recoup its losses from "cleaning the slate" with the SPSPA by recovering its reduced number of warrants at the $200.00 IPO share price, netting $400 B vs. the $100 B expected in the Moelis Blueprint.

Common shares rise to $10+ by end of 2020 buyback. Preferred shares remain intact as part of the new capital structure with partial dividends resumed and a trading value at an estimated 70% of par to begin with.... same time basis: end of 2020.

Collins en banc is what it is, as is Lamberth and Sweeney. GOV has $400 B in its coffers to cover any contingency and keep the rest.

JMO.
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***BREAKING NEWS***

The eagerly awaited "Treasury Housing Reform Plan" is actually the one-and-only "(No) Secret Sauce Plan"... and... it is predicted to release Fannie Mae and Freddie Mac from conservatorship "at any moment."

This is sure Good News for all common shareholders.

Sorry, but it is not such Good News for JPS shareholders who must wait 5 more years for dividends to be restored and bring share prices up to or near par value.

Sorry Glen, your Seeking Alpha report gets blown out of the water by this. And, sorry ACG Analystics, your predicted 50% rise in JPS value is now ruined by "The (No) Secret Sauce Plan" too.

But Plan founder Secret Squirrel has stars in his eyes for common shareholders whose share price immediately goes to $200.00 as their shares relist on the NYSE under a new CUSIP number. Then they are getting a 5 year vacation for recapitalization with some inexplicable exemption from having enough capital to support their guarantee and debt risks. But I digress...

Hey, have a nice weekend, everybody. The Secret Squirrel is about to deliver huge riches to all common shareholders momentarily. He just can;t tell you how this happens... because... IT'S A SECRET.

LOL.