Agree. This new entity was not created overnight; it has been in the works for years and was and is a well known cornerstone of reform from FHFA conservator.
The hub-bub results from one really prejudicial and misleading headline from one news service. The article does not say what the headline says. This new entity is a way to allow private capital to participate in risk-sharing on a uniform and limited basis with FnF, and reduce government exposure and participation. But that process will take decades and no one knows what it will ultimately look like in practice.
In the short term shorts will attack in the a.m. but this is good medium to long-term news as, to me, it is providing political cover for Congress and is one of the last 'check-offs' for the conservator before releasing FnF.
The only way it is bad is if there is ill intent towards shareholders in this and they plan on keeping FnF in conservatorship for the next decade and gradually bleeding off assets into a new entity. This sort of behavior on the part of the conservator would face a lawsuit every week that, according to most legal minds I've heard speak, is a slam-dunk for shareholders - unless political issues ouweigh the rule of well-established law in takings.
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