Fannie Mae-No Politics (FNMA)

[Wise Man]

This is why the FHFA cannot overstep.
The threshold of CET1 > 2.5% of Adjusted Total Assets as of the Q3 2023 earnings reports, is the last one, if we want to make sense of this extended Conservatorship.
It allows the redemption of the JPS at their fair value of par value and FnF would meet Tier1 Capital > 2.5% of ATA afterwards (ERCF).
It'd be done by the conservator in order to skip the Redemption Dates with its Incidental Power.
The fair value might not coincide with its Redemption Value, for instance, in FNMFO, a $100,000 par value JPS that has a redemption price of $105,000.
I'd be better to call it stock buyback instead of Redemption, to avoid legal liabilities with their contract that talks about Redemption prices.
Mnuchin's 3% CET1 for the release was snubbed.
He overstepped.