Replies to post #624109 on Fannie Mae-No Politics (FNMA)

[navycmdr]

in Calabria's own words ... "Fix the Roof while Sun is Shining"

Calabria TOTALLY FAILED to TAKE SWIFT LEADERSHIP Definitive ACTION

1st Day Failure - STOP the ILLEGAL (HERA) SWIPE

2nd Day Failure - RELEASE w Consent Decree Milestones to be met

3rd Day Failure - Reduce GOVT Backstop ea/QTR by Retained Earnings

instead he just went to RUBBER CHICKEN LUNCHEONS and GOT REALLY FAT !!!

posing for Vogue magazine - really Bad pic



became INTEGRAL PART of the SWAMP that HE DESPISES and now

is REDUCED to Pathetic TWEETING about Sea Cucumber Poop !!!...

[Robert from yahoo bd]

Currently, the twins, DO NOT have to fully recognize the financial impact of forebearance due to COVID on their books, The next bill will likely include unemployment benefits, mortgage rates are at 50yr lows (you don't want to skip your mortgage payment), there is an acute housing supply shortage, most homeowners have big equity positions in their homes,and it looks like the US Congress will allow financial institutions to not let COVID destroy them. But YOU should simply sell your investment(s) in the twins if you are "nervous about the future", I hear you can earn 0.01% PER YEAR on 1yr US Treasuries! "Also, even before negotiations with the House begin, on July 28 Senate Banking Chairman Mike Crapo (R-Idaho) stated that Republicans are considering adding language to relax financial institution capital requirements by permitting the exclusion of certain assets from the calculation of the Tier 1 Leverage Ratio. Whether this happens, and whether the relaxation survives negotiations with the House, remains to be seen."
https://www.arnoldporter.com/en/perspectives/publications/2020/07/coronavirus-legislative-update#Article6

[kthomp19]

Delinquency will only get worse into Fall -- this inept stoppage in unemployment will panic a bunch of people into various categories of deferal, delinquency etc

Maybe. Still, the delinquency and forbearance rates of FnF's MBS loans are way below anything that would cause them stress. Calabria said a 15-20% takeup rate on forbearance for 6 months (if I remember the numbers from his March interview correctly) would start causing stress, instead the number is under 6% now and dropping.

Calabria has said that admin action can only take place if economy is right -- the economy is WORSENING and so is risk of no admin action

No, he said a capital raise could only happen if the housing and equity markets were doing well. Administrative action like a SPSPA amendment, settling cases, ending the NWS, etc. is not dependent on the state of the economy.

A lot of people here debate common vs pref, but you need to start discussion admin action vs NO admin action -- odds are lengthening against action imho

Both are important considerations, but I agree that the latter is much more important than the former.

I disagree about the probability of there being no adminstrative action, though the various timelines do seem to assume that the economy doesn't take a steep dive late this year. If it does I think we will all have more problems than deciding what stock to invest in.

If I thought administrative action wasn't coming then I would definitely sell all my FnF stock and not look back. The court cases, especially Collins, are important, but imo only so far as to force the administration's hand.

Right now Treasury is staring the possibility of having to write a $125B check in the face (though they would keep the seniors). That's a true political black eye that can be avoided with the administrative actions above.

[TRCPA]

Yours is an important viewpoint that needs to be heard amongst all of the others. I think we will be alright once we get into 2021. But that is a long 6 months away.

A lot can happen between now and then.