Fannie Mae-No Politics (FNMA)

[philipmax]

Thanks bmp152.
I am trying to follow the money trail.
Agreed that normally the MBS (Mtge backed securities) end up in some pension plan.
Here's the problem as I see it:
1- the pension plans want LEH and GS to refund the money under fraud provisions.

2-GS goes back to FnF and demand coverage.

3- F&F go to the banks and question the legality at the point of origination.

4- Fed steps in and buys the MBS from banks.

5- Banks make good to pension funds and all is forgiven.

Now, FnF were the original guarantors.

6- Eventually Fed will want its money back from FnF as the insurers of the pile of S#$t sitting on Fed's books.

I am still baffled as to how QE3 helped FnF.

Having said all that. Let's understand that although the mtge fiasco nearly dumped the US into another Great Depression, the actual default rate as compared to the entire mtge market was under 7% vs. 25% for the Great Depression. 5 yrs later most of the damage was absorbed by the system so that FnF can easily work the problem thru and continue to generate huge profits.