Replies to post #42 on Fannie Mae Preferred S (FNMAS)

[44centsAKAchoccake]

[[There is no hidden clue here that can be extrapolated to us. I think we are on the hands of Congress if we wish to see more than a buck. But Tsy can surprise us with a sudden AIG conversion of Srs and *this* may raise some hope. Except that in AIGs plan common equity got hit.]]

DeMarco has been saying for a while now that he wants a third securitization platform that provides open and nondiscriminatory service to multiple servicers. So FnF could use that securitization platform but so could Wells Fargo and others. Given the fiasco with private label mortgages this is obviously necessary to get more participants in the market.

FnF would thus remain as companies. With the 15% reduction in portfolio, the emergence of the third platform, restored profitability and payback of taxpayers over the next five or whatever years, they would become less of a political football.

We are already on the trajectory for this to happen. I suppose that Congress would need to approve the startup of the third platform, but they don't need to do anything to FnF. Even with the third platform, there would still be a role for FnF.

Also, in the AIG plan common equity may have gotten hit, but that was not the case with the preferreds. The preferred dividends weren't cut and they are still being paid.