Fannie Mae-No Politics (FNMA)

[Wise Man]

SUMMARY OF 13 YEARS IN CONSERVATORSHIP
Data as of end of March, 2021. FnF combined.
*Core Capital -$194 billion
*Deficit of Core Capital over Risk-Based Capital requirement= $399 billion ($514 billion with the prescribed buffers)
*$416 billion of Core Capital generated by FnF during Conservatorship.
*$428 billion of Core Capital is recovered with the announcement of the Secret Plan.
*$182 billion is the expected UST refund to FnF.
*FnF would have to pay taxes on $55.5 billion out of the $182 billion refund, as they were deductible expenses at the time.
*$17 billion is the Capital Surplus over Risk-Based Capital requirement after the refund and all the adjustments (SPS and Warrant canceled). FnF declared Adequately Capitalized.
*$17 billion surplus is 17% of the prescribed buffers, thus, below the 25% buffer threshold ($29 billion) required in the Capital rule to resume the dividend payments.
*The JPSs' fair value still hasn't reached its par value and until they resume the dividend payments.
*Even with the 2Q results, FnF would still be approximately $2 billion short of the threshold to resume the dividend payments. But there is no doubt that it will be surpassed with the 3Q results. The FHFA could direct the enterprises to announce the first dividend payment on December 2021.
More detail on #Fanniegate.