Fannie Mae-No Politics (FNMA)

[kthomp19]

Delinquency will only get worse into Fall -- this inept stoppage in unemployment will panic a bunch of people into various categories of deferal, delinquency etc

Maybe. Still, the delinquency and forbearance rates of FnF's MBS loans are way below anything that would cause them stress. Calabria said a 15-20% takeup rate on forbearance for 6 months (if I remember the numbers from his March interview correctly) would start causing stress, instead the number is under 6% now and dropping.

Calabria has said that admin action can only take place if economy is right -- the economy is WORSENING and so is risk of no admin action

No, he said a capital raise could only happen if the housing and equity markets were doing well. Administrative action like a SPSPA amendment, settling cases, ending the NWS, etc. is not dependent on the state of the economy.

A lot of people here debate common vs pref, but you need to start discussion admin action vs NO admin action -- odds are lengthening against action imho

Both are important considerations, but I agree that the latter is much more important than the former.

I disagree about the probability of there being no adminstrative action, though the various timelines do seem to assume that the economy doesn't take a steep dive late this year. If it does I think we will all have more problems than deciding what stock to invest in.

If I thought administrative action wasn't coming then I would definitely sell all my FnF stock and not look back. The court cases, especially Collins, are important, but imo only so far as to force the administration's hand.

Right now Treasury is staring the possibility of having to write a $125B check in the face (though they would keep the seniors). That's a true political black eye that can be avoided with the administrative actions above.