Replies to post #612367 on Fannie Mae-No Politics (FNMA)

[TRCPA]

To add one final point to this. I see a way out that can solve the problems of just about all parties here.

And that is a point that was brought out by a couple of people close to the scenes, a few days ago.

That way out is extremely simple in its execution, but could well be the elixir that satisfies all parties enough to pull together to an end.

And that is this.....a simple book entry that categorizes the GSE's overpayment of over $100 billion as a prepaid asset. With the offsetting entry going towards core capital.

This sounds like something straight out of a Trump-like/Mnuchin Art of the Deal move.

Treasury keeps its money, and gives up all of its warrants.....or most of them. They are back to square one....or better. The plaintiffs get credit for the overpayment in the form of core capital towards release.....if not the actual cash. The courts might look favorably on this.....and so might the plaintiffs, as this makes the heavy lifting (capital raise) for the GSE's a helluva lot lighter......however the capital standards actually turn out.

What happens to the prepaid asset? That will be a question for new administrations to ponder. By the time it becomes an issue, we will have been way down the road already of GSE freedom.