Replies to post #56395 on Fannie Mae-No Politics (FNMA)

[JohnCM]

Poor choice of words. Should read ... "The GSEs would be liquidated within five years."



"From Bloomberg we know:

•The GSEs will be liquidated within five years
•Private financiers will fund the newco, taking a first loss position adequate to cover price declines as steep as those seen during the recession
•Proceeds from the liquidation would first go to the US government as senior preferred shareholder (and lastly to holders of the common stock).
•The new entity will be called the Federal Mortgage Insurance Corp (FEDMAGIC)
That is all we know for sure. The following from BofAML provides the best primer for the possibilities that we have seen (beware the details are not particularly positive)..."