Replies to post #462074 on Fannie Mae-No Politics (FNMA)

[contrarian bull]

Can you explain how the debt just disappears? I'm surprised more companies aren't going this route -- you know, just move the profitable portion of the business to an LLC and then just walk away from their debt/obligations.

This is the fun part of going through bankruptcy reorganization. You get to wipe out your debt, and keep the company going. Can be very profitable for the company and their executives. Trump used this trick to build up a lot of his net worth, so he's familiar with the process. If he were to ever take an interest in fannie and freddie I wouldn't be surprised if he had Treasury go this route.