Fannie Mae-No Politics (FNMA)

[Wise Man]

It's recorded on the balance sheet as an Asset write-down. The accounting rule CECL considers that the expected loss, already occurred. Thus, the Capital ratio covers unexpected losses. This is horrible because this Loan Loss Reserve now isn't considered TIER2 Capital, as it always has been (Equity, not Liability)
On the annual Income Statement of operations, it's recorded as a provision for loan losses, so a whopping $42 billion expense during the two years of the stress test. But FnF manage to post a $14 billion Net Income after this provision.
That's the Severely Adverse Scenario. What would happen in the mild scenario? And the good scenario?