Fannie Mae-No Politics (FNMA)

[Patswil]

The plan intends to give the shareholders of Fannie and Freddie an opportunity to realize the value of these assets.

http://www.restorefanniemae.us/aei

INTRODUCTION AND SUMMARY

The purpose of requiring an AA-equivalent rating is to prevent Fannie and Freddie from using their continuing GSE status to attract capital and support their operations, while transferring most of their assets to the holding company. The purpose of requiring that they spin off copies of their automated underwriting systems is to assure that, even as privatized companies, Fannie and Freddie are unable to dominate the mortgage market through their superior data on conventional/conforming mortgages or the fact that many originators have become accustomed to working within the parameters of their automated underwriting systems. By requiring that these assets be spun off to independent companies owned by their shareholders, the plan intends to give the shareholders of Fannie and Freddie an opportunity to realize the value of these assets. The spun-off companies, which will be required to maintain their independence from the GSEs, the GSEs’ holding companies, or any other participants in the mortgage market, can engage in any activity, but they will be required to license the automated underwriting systems and the databases to all comers, on essentially comparable terms.