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Federal National Mortgage Association Message Board

  • jwtechy jwtechy Jun 7, 2013 9:04 AM Flag

    Conservators are bound legally to Exit If and when the COMPANY Becomes SOLVENT- WE ARE.

    This is why congress was scratching their heads, "what do we do now", when they got the big checks.

    They also want to reduce the government's risk. Well FnF were already on the path toward doing that with stepped up securitizations (which, but don't look now, are making a profitable come back!)

    Ending Fannie and Freddie as part of some perceived political outcry for something to punish, would be an escape goat move that cripples the housing market. Folks are not giving the conservators the credit they deserve. I have read their plans. Seen the diligence, the new management staff, the rebirth of the business. And the economy is benefiting in part to these efforts. Why would the government punish its own significant efforts?

    So, sell side analysts, who would like to cover their shorts by writing "inadvertently kill the economy" articles about ending the life of a good thing(FNMA); after "the people" have invested so much in its re-birth, is desperation at its most extreme.

    Congress needs to work on legislation that stops short sellers from placing its F'kd up opinions in people's news feeds! That one is better than the 4 year prison sentence for annoying a cop (check out NY on that one..)

    Obama, and gang, lets not throw out the baby with the bath water. Instead, make political gains by letting folks know of your success with FnF, and how housing will continue to thrive under their financial backing, regardless of the shifts in underlying risks. It's more than do the right thing, it's a function of survival of the nation's economic health.

    God Bless America...buy FNMA...
    :)
    jw

    Sentiment: Strong Buy

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    • Your points are well taken.
      Besides the economical and political arguments, let's consider for a moment the technical argument. The FAnnies have built for many years sofisticated data bases, computer applications, reporting systems and systems to interface them with the miriad of banks and other institutions. This is not something you can dispose of and then start from scratch. This is something that is based on a lot of technical expertise, hundreds of thousands of man/hours and tens of $$$millions spent. Dismantling Fannies and starting an new is pure abheration from the technical standpoint.

      Sentiment: Strong Buy

    • So what you suggest makes sense. Congress effectively turn its lemon into lemonade by emphasizing the successful re-positioning of the GSEs. I think this is sound. With the FED trying to eventually withdraw its presence from bonds and MBSs, what they do with Freddie and Fannie will be extremely import.

      This is a classic case of "turn it lose" and let the private funds flow.

      md

      Sentiment: Buy

      • 1 Reply to mctr_dangerfield
      • I think Corker is nuts to consider a new government owned mortgage lender. The government will screw it up just like they have with Fannie, Freddie and FHA. How many times do these guys have to get hit over the head before they realize that mortgage lending is risky stuff?



        I don't know what will happen with Fannie and Freddie. If you believe in the FHFA (the administrator for F/F) then you would have to conclude that F/F have no value at all. The flip side is that if left alone, F/F would be able to pay back all of the money borrowed from the Treasury PLUS a very big return to the taxpayers. This "miracle" could be accomplished in less than 36-months.

        GM/Chrysler, AIG and all of the TARP banks have done pretty much what F/F are capable of. They went into the crapper in 2009, the Feds bailed them out and after a few years all the money was paid back with a gain. Given that as a precedent, then a good case could be made to let F/F go down the same road.

        If F/F were allowed to payback the taxpayers, and then emerge as new private sector companies, the Preferred stock of the Agencies would be money good, and the common stock would be worth many multiples of the current price.

        Most investment opportunities have three possible outcomes. (1) A significant gain, (2) a complete loss , and (3) something in the middle. That's not the case with F/F. There is no "middle". Either the the common/Pref could be a huge home run, or it is going to zero. No wonder the market is having a difficult time trying to figure out how to value the equity.

        Sentiment: Strong Buy

    • yep

 
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