Replies to post #519106 on Fannie Mae-No Politics (FNMA)

[IL Padrino]

Of course we are pessimistic. We’ve been crapped on and swindled for 10 years now. Why would we think otherwise? At this point, we are all in or bust.

[Embers]

I think his statement is general. 2 "reforms" are likely.

1) Build capital- Mark and Treasury only. Easy to start.
2) Major reform- Congress required. Major reform to how the mortgage space is managed and who can manage. Likely to stall in congress. Mark may want this but ultimately Congress needs to get involved.

There will be pressure to release before 1) major reform because the government/taxpayers will be stuck with the bill if the housing market has issues. Therefore, I think Mark will push 1) hard and may even get democrats trying to take credit.

[kthomp19]

Anyone else see Calabria's statement negative for us f&f shareholders?

I think it's not necessarily positive.

When he says "we must not let this opportunity for reform pass" it seems he wants reform to happen before any recapitalization and ultimate release for the GSE's. Once they are recapped and released, the opportunity to reform them will have passed.

I would replace the "before" (emphasis added) with "alongside". But I agree with the last sentence. The presidential memo was pretty clear in the desire to reform the whole housing finance system, not just FnF.

I have seen some that anticipate an end to the NWS being announced in isolation, but not only do I disagree with that being a possibility (unless it's due to a court order), I'm starting to think that a recap and release won't be done without the rest of reforms as you said.

I was really hoping he would take actions THIS year and not wait for congress to maybe, possibly pass some sort of reform in the next few years.

I don't share this fear, though. Watt was the ultimate sit-on-your-hands director. Calabria, with the mandate from the President, won't do the same. This administration is in a huge hurry, and will want to get as much of this wrapped up as possible before campaign season.

[jog49]

Such a statement should worry all shareholders. He's harping for REFORM and we all know that F&F have reformed themselves years ago and are operating like well oiled machines. Along comes Miss Muffett singing reform.

Reforming something that has been reformed = major governmental train wreck!

[bcde]

“I enter this office with a sense of urgency. The foundations of our mortgage finance system remain vulnerable, and we must not let this opportunity for reform pass," said Dr. Calabria.

No fhfa director can act independently without the support from administration. Moreover Ending gov/conservatorship control of fnf is the most glaring unfinished work of reform. The housing finance system is too complex to reform in one go.

By trying to destroy fnf using lawless conservatorship has further complicated the reform efforts. True reforms can be made only following rule of law. So first fhfa has to unwind all lawless decisions of conservatorship to start true reforms.