Fannie Mae-No Politics (FNMA)

[Rodney5]

You mentioned critical capital levels and somehow you believe everything the government has done is legal. What will happen? Will the government reverse the stranglehold on the company?

Although Fannie Mae is gradually rebuilding its capital base, capital levels remains substantially below regulatory requirements. Fannie Mae is subject to the enterprise regulatory capital framework (ERCF), though capital requirements have been waived during conservatorship. While Fannie Mae had a GAAP positive net worth of $78 billion at YE23, the ERCF excludes the stated value of the senior preferred stock ($120.8 billion), as well as a portion of deferred tax assets, resulting in the Company being significantly undercapitalized. Indeed, at YE23, the shortfall to adjusted capital requirements totaled $243 billion, with the Company reporting negative regulatory capital ratios given deficit for each tier of capital. Given covenants under the PA, Fannie Mae also does not have access to equity funding except through draws from the U.S. Treasury (and only when total liabilities exceed total assets).