Replies to post #568198 on Fannie Mae-No Politics (FNMA)

[obiterdictum]

"Privatization of the Housing GSEs"

Obi,

FnF and SLM are fundamentally different in many aspects.

FnF loans are based on Physical properties whose prices varies over a period of time. In case of SLM there is no such thing to compare even though repayment depends on good employment market in both the cases.

Home owners can wipe out their loans through bankruptcy but not students.

FnF end consumers are much diverse and much more in numbers compared to SLM market. FnF consumers need to have good credit history but students have hardly any credit history.

So applying SLM real privatization experience may be simplifying to much to apply to FnF.

bcde,

Frankly, the differences mentioned above are not directly relevant to the federal charters and recommend legislation issues raised in the post.

The business differences are not at issue in the comparison of Sallie Mae and the GSEs. "The issue raised is the about the federal charters, terminating charters and/or re-chartering as undergone in fact in Sallie Mae's history and as given in the Treasury Housing Reform Plan's recommendations for the repeal of federal charters and re-chartering by FHFA." See post: https://investorshub.advfn.com/boards/read_msg.aspx?message_id=151539388

Treasury recommends the repeal of the GSEs federal charters (a legislative act) to have Congress grant chartering powers to the FHFA (a legislative act), and for the FHFA to re-charter the GSEs and to charter other companies in the same manner as the FHFA re-charters the GSEs (a statutory and regulatory act). As the Treasury plan states, this is done to increase competition in the secondary mortgage market.

So, the comparison to be made is not business differences. The comparison to be made is about past actions done to achieve the termination of a federal charter of a GSE (Sallie Mae) and what may happen in the future to the GSEs federal charters and FHFA's re-chartering of the GSEs and chartering of other companies recommended by Treasury. By applying the lessons learned of the past to present and future circumstances and conditions, we can be better informed.

[Lotto65]

Home you can take. Mind you cannot. Fannie Mae/Sallie Mae.

[Donotunderstand]

FnF loans ?

do you mean the underlying bank loans?

Sallie Mae to my recollection did not buy bank loans - they just got in the middle somehow and provided near zero value (where at one time their administrative capacity might have been of serious value it dwindled over time)

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