Fannie Mae Preferred S (FNMAS)

[44centsAKAchoccake]

Well, I think that part of what the FHFA is working on is "guarantee portability," i.e., various entities including FnF and others could get a "guarantee" from Tsy if the mortgageholder pays the 25 bp or 50 bp or whatever. There would be a process for deciding which mortgages will get a guarantee.

I think a guarantee will stay in some form. In the past, Tsy has provided a guarantee without being compensated for doing so. In the future they may provide a guarantee for which they get paid a fee. With good credit screening and so on Tsy could make good money on this.

Granted, once every 20 years there will be problems in the mortgage and housing markets and Tsy and others will take a hit.