Replies to post #480803 on Fannie Mae-No Politics (FNMA)

[cfljmljfl]

I don’t think that printing any new shares will be done. In my extensive study of HERA I can see no legal authority for that to be done. A “plan” of restructure, would have to be approved by congress or ordered by judge. A release under new rules of management could be done by Watts, as conservator, or Treasury. But no company structure change, until a new released company board (subject to real shareholder approval)

[YanksGhost]

<< This is why FnF need credit line from Gov during phased recap. >>

Yes, that is one option. Another is that the GSEs get released but are unable to issue any new MBS until capital is rebuilt unless some forbearance period is empowered by the Regulator. My opinion is that recap gets facilitated by government cancelling the warrants and allowing a 5 B common equity secondary offering to provide capital for justify a return to a "business as usual" posture for Fannie Mae and Freddie Mac.