Fannie Mae-No Politics (FNMA)

[obiterdictum]

I do not know. And I know very little about Ackman's plan. Neither can I say if the "REIT" idea refers to the GSEs becoming large landlords.

He has made no comment about his investment and future plans beyond what is in the SEC SC 13D filing. REITs usually own and operate rental properties and years ago Ackman had made comments that Fannie and Freddie could be organized as REITs.

However, I did a quick count on HomePath.com to see how much real estate Fannie Mae owns. A rough count by state led me to over 49,000 homes. This is Fannie's REO and could be an outdated number, a figure that isn't taking into account all what they owe and/or a figure that is not contemplating future foreclosures that may lead to an increase in the REO count. Freddie may have as much?

Under the Berkowitz proposal, all of the legacy mortgages would be run-off, sold or liquidated, so even if there were 100,000 homes available on the legacy book of business as owned mortgages they would eventually be disposed of.

So one can say that the possibility of Fannie and Freddie becoming very large landlords is there. But, at what cost? What is the state of such real estate? How much improvements are needed? Have the neighborhoods where they own property kept up? Is there infrastructure in place to start a rental operation? This could in some fashion prolong their existence regardless of other visions/offers/plans

Yes. If the run-off and liquidation plan in Berkowitz proposal is dropped by the and the proposal is altered in some consensual arrangement with Congress, FHFA and US Treasury, there is no reason that HomePath properties and other foreclosure properties including those of Freddie Mac could not be spun off as a REIT. Ackman had suggested this before MARCH 8, 2012 on CNBC. - http://www.cnbc.com/id/46667985

Nothing has been said that enables to establish a relationship between Ackman's action and the 3rd ammendment problem. Has he been outspoken in this regard? For all we know he could be simply placing a bet that there will be a win at the courts. Which may make any deep reform by Congress a lot harder. Perhaps his bet is that the future is better regulated GSEs that stay. So no run off and no Berkowitz.

He has not been outspoken and has declined to comment on his investment plan. No mention of vacating the 3rd amendment to the PSPA and no mentions of the taking clause.

And yes, he obviously making a bet. His investment gained on Friday 175 million dollars. Take a look at the video below to see how Akman thought in 2008 and compare his restructuring plan to the PSPAs. Unlike Berkowitz, Ackman would keep the GSEs going.

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