Fannie Mae-No Politics (FNMA)

[kthomp19]

what are your thoughts on another SPSA.

I don't think a brand-new agreement would be legal, at least one that includes a line of credit from Treasury. I believe that the existing line was made available pursuant to Treasury's temporary authority in HERA which required an emergency determination.

Therefore the existing agreement would have to be modified instead. But I don't see any limit to the changes FHFA and Treasury can make as long as they stay within their prescribed authorities in HERA. (i.e. no new NWS!)

One that has a modest and reasonable return for treasury. One with clear language terminating the agreement when treasury is paid back.

Well, you don't want the agreement terminated because the MBS markets want government backing of the MBS. Right now it's only FnF that are backed, and it would have to stay that way without Congressional action. It is very important that the funding commitment stay in place.

I read earlier someplace 7 billion a year for such which is way too high.

We will see what FHFA and Treasury agree to, but your opinion (or mine) about what constitutes a reasonable number isn't likely to matter.

DOJ could still go after them for criminal activity but not shareholders.

I wouldn't hold my breath on that one.