Replies to post #382261 on Fannie Mae-No Politics (FNMA)

[bcde]

It does not matter how balance-due is calculated either using separate loans or combining the loans, 30 year or quarterly basis as long compounding is done correctly.

Balance Due calculations @5%

fnma 5% fmcc 5%
2008 Q3 0 13.80
2008 Q4 15.18 44.51
2009 Q1 34.34 50.43
2009 Q2 45.06 49.91
2009 Q3 59.74 49.24
2009 Q4 74.63 48.56
2010 Q1 82.44 58.48
2010 Q2 83.06 59.72
2010 Q3 84.48 59.00
2010 Q4 85.99 58.64
2011 Q1 93.35 57.76
2011 Q2 97.32 58.35
2011 Q3 103.83 63.45
2011 Q4 107.08 62.74
2012 Q1 105.60 61.73
2012 Q2 103.99 60.69
2012 Q3 102.36 59.64
2012 Q4 100.71 58.58
2013 Q1 97.74 53.49
2013 Q2 39.60 47.19
2013 Q3 29.85 43.42
2013 Q4 21.61 13.52
2014 Q1 14.68 3.25
2014 Q2 9.17 -1.21
2014 Q3 5.58 -3.11
2014 Q4 1.65 -5.94
2015 Q1 -0.25 -6.86
2015 Q2 -2.05 -7.69
2015 Q3 -6.43 -11.70
2015 Q4 -8.72 -11.85
2016 Q1 -11.69 -13.74
2016 Q2 -12.75 -13.91
2016 Q3 -15.78 -15.02
2016 Q4 -18.95 -17.51

[obiterdictum]

Obi,

For this exercise, each draw or annual total does not have to be presented in separate loans, the math gets you to the exact same spot regardless of presentation.

That exercise is fine. It is a personal exercise.

The bill's provisions require separate loans. Why? Ask Capuano. If it passed, as is, separate loans will be made with provisions of 5% interest rate over the entire term of the loan, a 30 year maturity, an amortization schedule over 30 years, and GSE dividends paid counted as principal and interest payments beginning with the first loan originated by date as stated and directed in the bill and added to subsuquent loans. Is that not so in the bill as given?

On the basis of loan - v draw and repayment my presentation is sound.

See presentation: http://investorshub.advfn.com/boards/read_msg.aspx?message_id=128245099

Yes. It is sound for what it is.

However, it is not what the bill requires and cannot be used to evaluate H.R. 491 which is the exercise for this thread.

jeddiemack, what is it about the bill that it cannot be evaluated on its own terms as clearly stated.

For instance, what is the reason to not make separate loans with on a 30 year amortization schedule at 5% percent interest when the bill requires it?

(2) Treatment of enterprise draws on Treasury

[i]That any amounts received, before or after such modification, during a single year by the enterprise as a draw on the commitment made by the Department of the Treasury under such an Agreement, shall be treated as a loan made by the Treasury to the enterprise that—

(A) was originated on the date of the last such draw during such year;

(B) has an original principal obligation in an amount equal to the aggregate amount of such draws;

(C) has a term to maturity of 30 years;

(D) has an annual interest rate of 5 percent for the entire term of the loan;

(E) has terms that provide for full amortization of the loan over such term to maturity; and

(F) shall be repaid by the enterprise in accordance with the amortization schedule established for the loan pursuant to subparagraph (E) of this paragraph, subject to paragraph (3).

(3)Treatment of dividends paid
That any dividends paid by the enterprise to the Department of the Treasury under the Senior Preferred Stock Agreement before such modification of such Agreement shall be treated as payments of principal and interest due under the loan referred to in paragraph (2), and shall be credited against payments due under the terms of such loan (in accordance with the amortization schedule established for such loan pursuant to paragraph (2)(E)), first to such loan having the earliest origination date that has not yet been fully repaid until such loan is repaid, and then to the next such loan having the next earliest origination date until such loan is repaid.

The bill's provisions state that separate loans are be originated on the date of the last draw during a year when the draws are made and wherein the principal obligation for the loan is in an amount equal to the aggregate amount of such draws for that year with a 30 year maturity at 5% for the entire term of the loan and placed on a amortization schedule over such term to maturity and repaid according to that amortization schedule and Paragraph (3)?

Is it difficult or impossible to use A, B, C, D, E, F, and Paragraph (3) to construct a presentation, rather than a personal presentation that does not follow the bill's provisions?

The simple amortization schedule in the bill refers to what is seen below.

Payment # - Payment Amount - Principal - Interest - Balance

What the amortization schedule schedule would be like in terms of the number of payments over thirty years is unknown. The bill does not make that clear. Certainly, different amortization schedules with different number of payments over the maturity of the loan yield different results. As you know, prepayment, overpayment rules are not provided in the bill.

Source:
H.R. 491
https://www.congress.gov/bill/115th-congress/house-bill/491/text