Fannie Mae (FNMA)

[Robert from yahoo bd]

Been reading many of the Comment letters and many make compelling arguments that the 4+% Capital Ratio is too high, namely because:

(1) GSES are really NOT International Commercial Banks, therefore Basel III is inapplicable.

(2) FHFA should account for gfee revenues received during stress periods.

(3) The procyclicality buffers will damage the market in times of stress as GSES will be making less MBS, due to increased capital requirements.

(4) The excessively high Capital Ratio will result in the GSES going after higher return riskier mortgages and would not be competitive with low risk loans.

(5) The negative consequences of over capitalization of the gses will hurt consumers, the CRT market, and the gses themselves.

Dr. Mark Calabria, the porridge CANNOT BE TOO HOT OR TOO COLD, make it just right!