Fannie Mae-No Politics (FNMA)

[Rodney5]

Guido, Tim was asked
Quote: “Tim, how much overpayments have been done with compound interest to date? Also why did FnF have to pay the 10% dividend and all of their net worth as liquidation preference even though they were and are undercapitalized (CET1), because that violates the cited FHEFSSA guidelines?”End of Quote

Tim Howard Quote: “You are correct that Fannie and Freddie’s regulatory guidelines [FHEFSSA] would have prohibited them from paying cash dividends while severely undercapitalized, but FHFA suspended those guidelines because it wanted the companies to have to draw more senior preferred stock from Treasury to pay the annual dividends in cash, to balloon their outstanding senior preferred and increase their required annual dividends by still more.” End of Quote

Keep in mind the FHFA is regulator the FHFA cannot change the law.

Link: https://howardonmortgagefinance.com/2023/06/05/response-to-fhfa-pricing-rfi/#comments