Replies to post #257956 on Fannie Mae (FNMA)

[Ripcord01]

I just finished reading the transcript from Mel Watt's Speech today.

I do not think the intent was to let the lender off the hook based on what I read. If anything, they seem to be clarifying to the lenders what the rules are for when the hook will be pulled.

One part of Watt's speech focused on the confusion lender's are having with how long they are liable for lending to someone. It appears there was an assumption that the life of loan meant forever. They seem to be defining it to a more set time frame. If you were a bank and you were making 30 year loans would you want to be on the hook for 30 years? So someone made payments for 20 years and then the borrower has problems and you get held accountable to a bad load?

It seems Watt was breaking it down to a more manageable period of time. So the banks, regulators, FnF, etc.. could have some measure to do their accounting by.

This isn't the opening to the great flood of bad loans. It just means there is some room for people with a less than perfect credit rating get a loan at a more affordable rate.

**break**

However, the meat of the speech is the Common Securitization Platform (CSP). Why is this important? Its important because this is the big FHFA project in regard to FnF. Completion of the CSP could be the opening for the end of conservatorship. I doubt FHFA/US Treasury would end conservatorship without this project being completed.

Guess what we already have a time frame. Because one key member COO Edwards of Fannie Mae is leaving in around 6 months. He had all of his jobs taken away except his management of the completion of the CSP.

So completion of the CSP should be around the corner. I haven't heard of any other big projects out there that involves both FnF. I have no proof that the conservatorship will end at that time. But in my mind it solidifies that the conservatorship will NOT end before the CSP is completed or there is a deal to complete the CSP.