Fannie Mae-No Politics (FNMA)

[Fully Diluted]

Thank you DaJester and Barron,

Yesterday was not my day, as I made claims without thoroughly researching them first. First, I overlooked the CBO report when I spoke harshly about Carney (although he always deserves it from an investor's point of view 🫢), and then I misinterpreted HERA with regard to receivership and LLRE. You were spot on, DaJester.

Let me summarize:
- HERA prohibits the FHFA from dissolving the charters of Fannie and Freddie. Page 115 of 261: PROHIBITION OF CHARTER REVOCATION
- FHFA has the option to sell shares of LLRE. Page 111: AUTHORITY
- LLRE takes over the charters of Fannie or Freddie. Page 110: …succeed to the charter…
- Although its status is temporary, once at least 80% of LLRE shares have been sold, LLRE loses its status as LLRE but continues to exist as an entity. Page 111: IN GENERAL

I now assume that the charters will remain in force, „…after the entity shall cease to be a limited-live regulated entity…“. Page 111
I think the purpose of the whole thing is that even after receivership, there will still be two GSEs that fulfill their charters / mission.

I'll save myself the time of checking whether it's even possible to put Fannie and Freddie into receivership under HERA at this point. Although I've come across the statement several times in this section alone that Fannie or Freddie must be “in default or in danger of default” I agree with Barron: what can you do if the administration simply does it?

I don't like having to correct myself. But I like it even less to knowingly leave false statements I have made uncorrected. 🧐

GLTY 😎

https://www.congress.gov/110/plaws/publ289/PLAW-110publ289.pdf