Fannie Mae-No Politics (FNMA)

[navycmdr]

...As I’ve said many times before, it would be as easy

to get Fannie and Freddie out of conservatorship as it was

to put them in it, if some critical group of officials in

the Biden administration had the political will to do so.

I believe they got close with the proposed nomination of Mike Calhoun
as FHFA director, but the bank lobby was able to sideline
(and probably kill) it.

So now we sit, with Fannie and Freddie in the impossible
position of having a half-trillion dollar shortfall from
the negative core capital they have currently (because of
the net worth sweep) to the 4.0 percent-plus required
full capitalization set by a director who raised the
previous director’s required capital level by 80 percent
at the same time as the companies had improved their
creditworthiness to the point that they could survive
the Dodd-Frank stylized repeat of the Great Financial
Crisis solely on the income from their current
guaranty fees, with no need for any initial capital at all.