Fannie Mae (FNMA)

[navycmdr]

Short Takes: Passing the (Stress) Test With Flying Colors

so Why? are they STILL HELD GOVT HOSTAGE ?

Thursday Aug 11, 2022 - [e-mail], [e-mail]



It looks as though Fannie Mae and Freddie Mac will survive the
next severely adverse economic scenario that comes their way.

According to the results from their 2022 Dodd-Frank Act Stress Tests,
released Thursday morning, the GSEs remain in the black even in a
scenario in which commercial real estate and corporate debt markets
are severely stressed, GDP contracts more than 3.5% and unemployment
jumps to 10%. (There's an inflation component as well.)

Under this baseline scenario, the DFAST suggests Fannie still would
manage $11.8 billion in net income over the two-year stress period while
Freddie would reap earnings of $8.7 billion — that’s despite combined
provisions for credit losses totaling $34.9 billion and losses of $7.1 billion
due to the global market shock on trading securities and counterparties…

So why, then, are these two money-printing mortgage giants still in conservatorship

after 13 years and roughly 10 months? A loaded question indeed…