Replies to post #694756 on Fannie Mae-No Politics (FNMA)

[Donotunderstand]

Thank you

[Guido2]

Thanks FOFreddie. I believe you're right. Glad we still have plaintiffs willing to take on the government.

[JOoa0ky]

For all of those who haven't read the report yet... you probably should.

Based on the CBO timeline, its retained earnings for 3 years 2023 or 5 years 2025. But I think if the current administration wants to book in the windfall they would do it during this term. Although if they feel like they can win the next election, they might punt it back to 2025. It all depends.

Last but not least if you read the recap scenarios they laid out for 2023 vs 2025 and the 3% capital rule vs 4.5% capital rule and 6%.
- The US treasury seems to be WILLING to take a haircut to make the JPS whole (Which I find incredibly interesting)
- The goobermint also seems to acknowledge the fact that with a lower capital % the US GOVT will book a greater windfall. This tells me that if they are strapped for cash they may even lower it to below 3%... perhaps to 2.5% as Tim howard suggests.
- They also seem to acknowledge that there would be multiple scenarios where the govt would not get the full SPS or the full warrants. Which is encouraging. The possibilities!

Hi Robert and Guido - The 2020 CBO Report is what the Raneri and Calhoun opinion piece is based on. You can see the various scenario valuations based on assumed capital requirements.

https://www.cbo.gov/publication/56511

The base recap timelines are a public float in 3 years or 5 years with NO NWS until then. JPS get paid at PAR at some undetermined date and there is some settlement with common.

This is Pelosi's CBO and perhaps there will be an incentive to put part of the GSE stake for public housing? There is no discussion saying that a continuation of the NWS would be the best outcome. There is a paragraph on the bottom of Page 18 which will allow the UST to recognize 50% of expected profits if legislation is just INTRODUCED.

Maybe things have changed post Collins which will prompt JB to go back to the NWS with and indefinite conservatorship? It seems that they could accomplish what they want with a Utility based Recap and Release in line with the CBO analysis?

Thanks again to your both for your continued efforts on behalf of shareholders!!

[clarencebeaks21]

Quote: “There is a paragraph on the bottom of Page 18 which will allow the UST to recognize 50% of expected profits if legislation is just INTRODUCED.”

Well, correction, I think:

It says the 50% would be recognized upon *Administrative* rule and policy. This means the Executive branch (President) including any federal agency actions.

It also says *no* recognition ($0) for legislation, *until* fully passed & signed!

Quote:”Maybe things have changed post Collins which will prompt JB to go back to the NWS (&) indefinite conservatorship?”

I don’t see justification for a reversion to the original NWS. Despite popular criticism, the Collins decision reaffirms that at minimum, FHFA *must* follow a reasoned decision-making process as Conservator, to avoid a finding of APA arbitrary action. So an excuse like “the devil made me do it” would not fly (but admittedly, the bar seems barely higher…). Bottom line, FHFA and Biden would need to state a real rational justification plus support it with an objectively verifiable record.

SCOTUS is not gonna fall for the “banana in the tailpipe” twice. Though they may still slip on a peel.