Thursday, January 23, 2014

Risk sharing is happening at F&F NOW


This is from motley fool article today. 

http://www.fool.com/investing/general/2014/01/23/2-big-moves-show-the-future-direction-of-fannie-ma.aspx

the FHFA also announced that Fannie Mae is close to the completion of its second Connecticut Avenue Securities, or C-deals, transaction, which effectively allows institutional investors to invest in the credit risk of mortgages that Fannie Mae retains on its books. This move essentially helps manage and transfer the risk posed to Fannie Mae by bringing in private investment.

Watt said, "This and other risk-sharing transactions undertaken by Fannie Mae and Freddie Mac provide valuable insight as to how to restore private sector participation in housing finance and reduce losses for taxpayers."

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They (MF) spin this as being a bad thing for shareholders , I don't see it that way at all.

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