Fannie Mae-No Politics (FNMA)

[nats1]

I believe Calabria is just laying the groundwork for publishing the rule in close to its current form (with a probable increase in the credit given to securitized credit risk transfers, and possibly also some relaxation in the restrictions on dividends paid on new issues of preferred stock–and potentially also common–during the recapitalization period).

This was Tim Howard from his blog responding to if he thought that the cap requirements would be affected by the FSOC's noting that the cap requirements may not be high enough.

As part of the process, there are a lot of detailed comments and suggestions that they have to address when they publish the Final Rule. Freddie alone had 104 pages of highly technical suggestions and other comments. I was optimistically predicting an ETA of the week after Thanksgiving, but this may go longer.

My take is we need to go to the mat and let the SC decide so Biden (if he wins) can shuffle Mark out the door and then I think we have a shot at scrapping Cap Rule II and put a more reasonable and realistic Cap Rule III in its place. I really think this has a good shot at happening. I don't think any stock offering would be done by the time the SC decides so no change in who owns what - so we would have a window to do this.

Nats