Fannie Mae-No Politics (FNMA)

[Robert from yahoo bd]

The warrants will have to be dealt with before asking institutional investors to fork over a record amount of their money as fresh capital in a twisted partnership that the government has just spent 13 years proving that shareholders returns WILL GET OBLITERATED IF TIMES GET DIFFICULT.

No institutional investor is going to invest a dime in new money until the warrants, LP, and the dust settles from all the litigation, that could take awhile considering the government usually doesn't act decisively unless faced with a crisis.

If by reorganization, you mean recapitalization, it will likely take years for the dust to settle from the current outstanding litigation and the gses will likely be rebuilding capital organically. The government can easily adjust the requirements for release. With the Secondary Mortgage Market running full steam on all cylinders with the ability to prevent another mortgage crisis (see March 2020) and the government currently enjoying the benefits of 100% control over the gses without booking $7+T in liabilities on their books, this recap could take awhile.