Fannie Mae-No Politics (FNMA)

[RumplePigSkin]

“Something” will be done this week. Anywhere from a letter agreement increasing the retention amount while raising the liquidation pref to a Big Bang writing the liquidation pref to 0, writing off the warrants, and a consent decree.

I think the big bang is all but cancelled. Mnuchin doesn’t like the idea of rushing an exit of the conservatorship.

I do think the remaining options are on the table.

I think the letter agreement raising the retention amount as a fall back position is ready to go this week and already done. I think a 4th amendment has a decent probability, but what it will contain is anyone’s guess. NWS being permanently cancelled but having the rest stay to a scenario where the liquidation pref be written down significantly.

Final week ...