Fannie Mae-No Politics (FNMA)

[tutt1126]

ADMINISTRATIVE REFORMS

• FHFA should end the net-worth sweep and, per HERA, require both GSEs
to develop capital restoration plans. These plans would include continued
use of credit risk transfers, provided they meet a targeted economic return
threshold that balances GSE revenue and capital-building needs with
prudent credit risk management standards.

• FHFA should review and approve those capital plans, establish prudent
risk-based capital levels as required by HERA, and set reasonable
timeframes and milestones for achieving re-capitalization goals.

• FHFA should monitor the GSEs’ performance against their respective
plans and release each GSE from conservatorship as they become well
capitalized.

• The GSEs should complete construction of the Common Securitization
Platform and issue their respective MBS from the platform. Ownership and
management of the CSP should remain with the GSEs through the current
LLC structure. Expanding access to the CSP to other entities should be up
to the Common Securitization Solutions LLC board, with final approval by
FHFA.

• Launch of the Uniform Mortgage Backed Security should be deferred until
both GSEs are recapitalized and released from conservatorship.