Thursday, May 12, 2022 5:53:24 PM
Calabria said if FnF went under again then shareholders would be wiped out.
I'm not worried about that happening now, though. FnF have almost twice as much balance sheet net worth as their Dodd-Frank stress tests said they would need in a severe housing downturn. While the ever-increasing liquidation preference of the senior prefs sucks, at least FnF have been able to retain earnings over the last 2.5 years.
Sandra Thompson has said she wants this to continue, and a month ago she even talked about the steps that would be necessary to allow FnF to raise outside capital in what would probably be the largest IPO ever.
You're right that FnF's MBS books are in far better shape (LTV ratios, credit scores, etc) than in 2007-2008. That's why the stress test results came in so low. If I remember right, Thompson also did what Calabria didn't in those tests and allowed FnF's anticipated income to count against expected losses.
A housing downturn would certainly not help our cause, but I don't think even a severe one would be catastrophic to FnF shareholders.
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