Fannie Mae-No Politics (FNMA)

[FOFreddie]

FNMA and FMCC are worth more as interest rates decline. The fee income has a higher PV with lowere interest discount rates. Mortgages will be refinanced at lower rates and mortgage holders will never have incentive to refinance if rates ever go higher over the next 15 to 30 years. This means that the annuity of fee income have longer lives and more value in PV or present value terms.