Fannie Mae-No Politics (FNMA)

[navycmdr]

Short Takes: A New Letter on GSE Concerns
Explicit Guarantee?
There is None
The GSE Bailout Score
The Big Four

Tuesday Dec 15, 2020 - [e-mail]



Four influential housing-finance related trade groups shot off
a letter to Treasury Secretary Steven Mnuchin Monday, reminding
him of the risks involved in freeing Fannie Mae and Freddie Mac
from conservatorship too early. Namely, the four trades worry
that the Trump White House might let the two out into open water
without having the life vest called “appropriate levels of capital”...

The other big concern: the two might be released before Congress
creates an “explicit federal backstop” for the two mortgage giants....

Note: There is no explicit federal backstop of their MBS
(go see Ginnie Mae if you want that) or their shareholders
(ask the investors who hold the common)...

In case you’re keeping track, Treasury (since the historic
takeovers 12-plus years ago) has pumped $191.4 billion into
the Fannie/Freddie machine but received $301.1 billion back
in the form of dividends. That works out to an account
surplus of $109.7 billion in favor of the GSEs.

The four trade groups that penned the letter: the American
Bankers Association, Mortgage Bankers Association, National
Association of Home Builders and National Association of Realtors...