Replies to post #747049 on Fannie Mae-No Politics (FNMA)

[stoxjock]

Do you think the POTUS will inform us in the SOTU Feb 7th any hint of RRR of FnF, so that maybe they can 'jump start' more 'Affordable Housing Loans'? TIA & GLTU!

[FOFreddie]

Thanks Freddie bagholder - that seems real logical to me but there is an accounting component tied to the NWS that TH has highlighted which makes it more imperative that a Court invalidates the NWS or we get a political solution:

Here is an excerpt from the TH January 4 Post:

How long might that take? We can make an estimate, using data as of September 30, 2022 from the companies’ most recent 10Qs. To be eligible to be released from conservatorship, Fannie would need $136 billion in CET1 capital, $230 billion more than the negative $94 billion it has now (because of the net worth sweep); Freddie would need $111 billion, or $168 billion more than the negative $57 billion it has. At what I estimate as their sustainable rate of after-tax retained earnings—about $13 billion per year for Fannie and about $9 billion per year for Freddie—Fannie would not be eligible for release until 2040, and Freddie not until 2041. Fully meeting their risk-based capital requirements would take even longer.

https://howardonmortgagefinance.com/