Fannie Mae Preferred S (FNMAS)

[jwnoble3]

How much was TSY offering Demarco to conduct these write downs? I remember the initial analysis included TSY steering $$$ to ea GSE for performing the write downs. I thought Demarco said it was a net positive ($1.7B better for GSEs). Then Ed D raised the parade of horribles...moral hazard, protecting taxpayers, etc...

In this article it was "Treasury is offering to use billions of dollars of unused HAMP funds to cover 16% to 63% of the cost of a principal reduction on GSE and other loans."

http://www.nationalmortgagenews.com/dailybriefing/2010_525/treasury-incentives-principal-writedowns-1028564-1.html?site=default_msn

If TSY is still offering the unspent HAMP cash to the GSEs, then I see it as a positive for a quicker workout of the remaining underwater borrows and quicker recovery for the GSEs.