Fannie Mae-No Politics (FNMA)

[BigBenWallace]

Once it is sold off, it is the property of the buyer. There is no implicit promise that it will perform and that is why it is auctioned off in a free market risk/reward system. FnF makes a premium at auction in relation to the rate that at which they are sold.

FnF basically, if they wanted, could keep them on their books (if they have the capacity) or sell them at auction for a premium, less than the 6% example that you used, as that reward goes to the buyer, but at a premium.

Once they are sold, they dont pay anything to the RMBS moving forward and that is what is worked into the calculation when they are bidding on the security on the buyers side.

The net assets are the trillions of mortgages that have not been sold at auction that are on the books of FNF. They trickle a few billion out every week or so as they couldnt sell them all at once, but could sell them over time. That is the value here.