Fannie Mae-No Politics (FNMA)

[FOFreddie]

Great points Guido. Now is the time to exit Conservatorship and raise new equity while interest rates are low. The current value of the GSEs according to the 2024 budget is $ 224 bn and if interest rates rise the value of the GSE equity will decrease as interest rates rise.

Additonally now is the time to exit Conservatorship to ensure that the $7.2 billion MBS portfolio is properly backstopped by private shareholder equity as you mentioned. MBS investors assume the interest rate risk in the MBS pools due to the potential change in prepayment speeds but the GSE continue to assume the risk in potential market value declines in the liquidation of the underlying houses backing the MBS pools