Fannie Mae-No Politics (FNMA)

[bmp152]

Thanks for the fantastic continued analyis obit.

I have a question for you, that has never made sense to me:

If the FHFA, DeMarco, and FnF knew that the upcoming years would be highly profitable, why did they ever agree to the 3rd Amendment of the PSPA (i.e. the dividend sweep)? For it to have been passed so close to the profitability period (within 6 months) has never really made sense.

I know that the intention of the 3rd Amendment of the PSPA was to prevent FnF from making Treasury draws just to pay their dividend obligation. But to agree to such drastic measures just doesn't seem like sound business practice.

I'd be interested to hear your thoughts/comments on this.