Fannie Mae-No Politics (FNMA)

[Wise Man]

***BOMBSHELL*** It's been unveiled on #Fanniegate that one change by Calabria of the rule proposed by Watt, wasn't specified in the document and in order to increase their Capital needs when he saw that the outcome was a low Capital requirement. Calabria increased the minimum rate of the risk-weighted assets, from 6% to 8%. There's other controversial change with the same goal, this time mentioned in the document, and is the application of a risk weight floor of 15%.
I remind you that the Risk-Based Capital requirement is calculated by multiplying the Asset value x risk weight x 8%. These changes have prompted an increase of $25 billion in the Capital required (0.5% of the single-family Unpaid Principal Balance) compared with the amount applying Watt's rule on the same assets. Without those changes, the Adequately Capitalized threshold would have been $110 billion, not the current $135 billion. The shareholders and JPS holders request the resignation of Calabria, a Moelis' footman (sponsored by John Paulson and Blackstone)
More detail.