Fannie Mae-No Politics (FNMA)

[BigBenWallace]

FnF Business model

You will see that the debt/assets that FnF have are literally the same thing. The "debt" that people often refer too is/are also the assets (in the trillions). They hold the note/deed that is secured by the property that the note is against.

You will see that every week/month or so FnF have auctions selling those notes off to investors as RMBS's (residential mortgage backed securities).

I am sure if you look at the news feeds you will see that there is mention of auctions and/or sales of these, usually 2 or 3Billion at a time.

With home prices increasing you will see that the assets of FnF are safe as the equity that the homeowner has (because the homeowner will not walk away from that equity) protects the note that FnF could hold if the bank who lent the the money according to FnF guidelines wants to generate revenue and sell that paper to FnF.

If I were China/Russia or any other economically strong country, I would make the government an offer to buy FnF because then they would literally hold the rights/notes to 40% of the residential real estate in the US. Just imagine if that happened. Since the gov't has the rights to 79.999999 % at a cost basis of .000001 per share (if they exercise), at a sales price of $10/share we could pay a nice chunk (dont want to do the math now) of the national debt/deficit.

That is a question for the authors of this bill. just ask them, ok, instead of winding them down, let's sell them and get something out of them. The answer would probably be "no way", why would we sell them at such a discount. And that is the same answer that most of us that held on today had on why we didnt sell.

We will see tomorrow and in the coming months, but the liquidation value of of FnF is in the Trillions and that is in todays money, that is not taking into account what the 30 year mortgages that they have written will yield in the next 30 years in terms of payments, even more trillions.