Fannie Mae-No Politics (FNMA)

[crawford2012]

A couple of very powerful statements and they are very true.

The questions are?
- will they come back? (talking about investment managers)
- will they trust again?
- Will they help the gov't flip the switch?

Our politicians are trying, let's give them credit...but the truth sometimes in life there are things that you just can't replace but you can simply improve.

You're depending on tens of thousands of individual investment managers to play with you -- to shake your hand, and say, 'yes, I will help you build this market.' They may come, on a five year timetable, but if they don't, when you flip your switch, your system is going to shut mortgage availability down.

The most important lesson, I think, in terms of this benchmark vs. timeline is: you are trying to design a system that will induce people to put capital into new mortgage insurers and into new first loss securities that don't exist today, in a system for a guarantor with a guarantee that doesn't exist today, for a market of new securities that doesn't exist today -- it's going to take time.