Selling Your SECU Mortgage To A "New/New" Partner... The Real Core Issue!

                               

 ... an unsettled and unsettling national issue.

 ✅ "Background of Conservatorship" [source: J.P. Morgan]

"In response to the Global Financial Crisis, the U.S. Treasury placed Fannie Mae and Freddie Mac into conservatorship in September 2008. This action was intended to stabilize the mortgage market and restore confidence in the government-sponsored enterprises (GSEs). 

Since the start of the conservatorship, the Treasury has injected approximately $190 billion in capital into the GSEs, from a total commitment of up to $446 billion. In exchange, the Treasury received warrants to purchase up to 79.9% of common stock and approximately $190 billion in senior preferred shares with a 10% dividend rate. The senior preferred shares have generated $300 billion in dividends for the Treasury. However, the preferred stock agreement was recently modified to allow the GSEs to retain capital instead of making dividend payments.  

To compensate taxpayers for the forgone dividends, the liquidation preferences for the senior preferred shares are being increased by the amount of capital retained. As of the third quarter of 2024, the Treasury's liquidation preference for the senior preferred shares stands at $340 billion. As a result of retaining capital, Fannie Mae and Freddie Mac increased their combined net worth to $147 billion as of the third quarter of 2024. Despite this steady growth, the GSEs remain well below the minimum regulatory capital framework requirements set by the Federal Housing Finance Agency (FHFA) in 2020.  

Under the risk-based capital requirements, the GSEs must maintain minimum regulatory capital levels, including a tier 1 capital ratio of at least 2.5% of their adjusted total assets. As of September 30, 2024, Fannie Mae's capital requirement is $187 billion, while Freddie Mac's is $141 billion, resulting in a combined total requirement of $328 billion."

😎 After 17 years of conservatorship by the taxpayers, Fan/Fred remain under-capitalized by -$181 billion [required: $328 billion, actual: $147 billion = -$181 billion!]... even though the required capital level is only 2.5%.

✔ "New/new" have you really thought this partnership through for SECU mortgages ... a propped  up 1930's-era legacy, tax-payer subsidized, in a 17 year conservatorship, under-capitalized, with a risky political future, in an uncertain world economy! 

Tell us how you "risk-rated" all that, for the SECU Board, please...

   What could go wrong... again?