r/FNMA_FMCC_Exit

With all the nonsense of the Trump administration, Democrats should win in the midterms. If that happens, market will likely discount Fannie Freddie release and share will tank. Which perspective do you have at that point - buy or bail?

On the bullish side, it would be a buying opportunity. That is, a lot of factors , even aside from specifically Trump, line up towards privatization. This includes, among other things, that assuming Fannie and Freddie remain profitable, they will accumulate enough capitalize that they will have to be repeivatized since the only other option is to liquidate and dissolve them, which borders on the ridiculous at that point; in general privatization should be favored since it reinstalls a layer of capital to absorbed losses if 2008 like events happened again; and privatization is the primary way the government could realize the full value of its stake - that is, the government can't monetize it's shares unless, by definition it has people to sell those shares too. Additionally, I personally find it hard to believe that Trump's ego would let him pass up an opportunity to claim he "fixed" Fannie and Freddie and released them from conservatosh. By definition, if Trump doesn't release them that means a subsequent president could, I find that very hard to believe Trump would leave it for any future president - particularly a potential Democrat - to claim success for releasing them. All this boils down to if shares tank after midterms, then would be a buying opportunity.

On the other hand, if you think the midterms close the door if the Democrats win, then you would be bailing since it implicates reprivatization would not occur.

Which side are you on?

Great clip of the important parts of his talk today

Source: @HorsemanCountry

Oksenholt Capital making moves...

Sold $FNMA, bought hundreds of thousands of $FMCC shares. Perhaps after seeing Jon's analysis, @michaeljburry decided to double down... but in a bold move of confidence, @JonOksenholt bolstered his Freddie Mac position to ensure a leg up on Burry.

This is a calculated, measured, and conviction- based trade that - if @POTUS follows through with his promises made, and @SecScottBessent can figure out how to monetize - will be a generational move.

...........

Jon Oksenholt:

This week I bought several hundred thousand $FMCC shares.

@FreddieMac shareholders will soon learn why I’m their 3rd best friend (after @realDonaldTrump & @pulte )

While everyone else has been asleep at the wheel, I haven’t..

$FMCC $FMCKJ $FNMAS $FNMAT

Ps - some of the reasons for my decision include:

1. I’m happy with the tremendous progress that has been made

2. I couldn’t stand the thought of @michaeljburry possibly owning more $fmcc than me

https://preview.redd.it/tltccitoz0jh1.png?width=648&format=png&auto=webp&s=ce9d15635ded21b8eafa988ad7e836c57d2150eb

If House flips in the coming midterm, what is the expected price that F2 will hit.

If F2 are release after midterm losses, would Congress have any ability/interest in blocking presidential executive orders around F2 release ?

Are there any obvious synergies between Berkshire and Pershing and F2 besides Pershing’s stake in F2? A new post on the PSTH board for Pershing Square Sparc got me thinking about it given Berkshire’s Taylor Morrison acquisition and Pershing’s HHH. Not sure if those are competitors or if there could be a pony in there? I know the SPARC concept has been discussed before but a lot has transpired since then.

It's back - EDIT: When I said its back I meant the hoax last year

From Nico on X:
TIME TO BUY: FANNIE MAE (FNMA) – THE SLEEPING GIANT IS WAKING UP
Fellow Investors Update;

The opportunity in front of us is rare, asymmetric, and massively mispriced. Fannie Mae (FNMA) is trading at pennies on the dollar while sitting on the foundation of the entire U.S. housing finance system. Together with Freddie Mac, Fannie and Freddie account for roughly 75% of all U.S. mortgages — guaranteeing and enabling the vast majority of home loans in America. With over $4.5 trillion in mortgage-backed securities under management and a central role in home ownership for millions, Fannie Mae is not a speculative bet — it’s a future cash-flow machine trapped in conservatorship, for now.
Here’s why it’s time to load up before Wall Street wakes up:

1. Massive Intrinsic Value, Insanely Undervalued
   Fannie Mae generates billions in net income annually, yet the common stock trades like it’s worthless. This is deep value in plain sight. Based on core earnings power and book value, fair market valuations could easily justify a 10x–20x return from current levels once the GSE exits conservatorship.

2. Conservatorship Exit Is No Longer “If” — It’s “When”
   The political and legal tides are shifting. Stakeholders and courts are pushing for resolution, and the government already holds 79.9% in warrants—meaning it stands to benefit more from a rising share price than from further dilution or SPS overreach. Treasury can no longer justify dragging out a process that destroys long-term value.

3. Legal and Investor Pressure is Reaching Critical Mass
   Lawsuits are gaining momentum. Shareholders are no longer passive—they’re organized, vocal, and winning key arguments in court. The landmark Lamberth victory delivered over $600 million (later finalized near $812 million including interest) for shareholders, and the D.C. Circuit recently affirmed that award. Investor mistreatment is becoming a political liability, especially when private capital is needed to support housing finance stability.

4. ERCF Capital Relief = Faster Path to Recapitalization
   Recent amendments and reductions under the Enterprise Regulatory Capital Framework (ERCF) have lowered key risk weights, buffers, and requirements on CRT exposures and other assets. This eases the capital rebuild, accelerates retained earnings growth, and brings a viable exit from conservatorship closer.

5. Tailwinds in the Housing Market
   Despite short-term rates volatility, the U.S. housing market remains structurally strong. Fannie Mae (with Freddie) benefits from guaranteed demand for its services across ~75% of the mortgage market, making its earnings power not only predictable but growing. In any normalized environment, this stock should never be trading at sub-$10 levels.

6. Asymmetric Risk/Reward
   What’s the real downside? You’re buying a company with a massive asset base and recurring earnings for less than a small-cap tech startup. The upside? 10x+ if GSE reform and recap happens. Even a partial win (warrant settlement, SPS resolution, ERCF-driven capital progress, or political deal) could re-rate the stock by multiples.
   Bottom Line:
   FNMA is not a trade — it’s a conviction buy. The time to own it is before headlines confirm what smart investors already see. Institutions aren’t here yet. That’s your edge. Accumulate before clarity comes, because when it does, this stock won’t be under$25 - it’ll be on the path to full valuation.
   Back up the truck. $FNMA is waking up.

Sincerely,
A Believer in Justice, Value, and Once-in-a-Generation Trades
-----------------------

My response:

Fannie and Freddie are the real deal, with massive scale in the trillions (total assets were ~$4.33 trillion as of June), steady multi-billion-dollar earnings every quarter, Fannie's net worth climbing past $100 billion, and a central role in a big chunk of the U.S. conventional mortgage market. They’re retaining earnings under the current rules, getting some helpful tweaks to the capital framework, and just got that Lamberth award affirmed (jury awarded damages related to the net-worth sweep, and D.C. Circuit affirmed the judgment in July), which shows real progress and a bit of pressure for accountability.

That sets up an interesting asymmetric opportunity. The stock’s trading where it is largely because of years of being subordinated and stuck in policy limbo, not because the earnings power isn’t there. If they find a sensible way to handle the senior preferred, the warrants, the capital needs, and maybe a limited public offering or eventual exit, the residual common equity could re-rate in a meaningful way. Solid housing demand and the system’s need for private capital are also working in its favor.

Still, there's reason for caution... Up-list or exit is ultimately a political and regulatory process with no set timeline or guaranteed terms. Common shareholders sit behind that big senior preferred liquidation preference and the 79.9% warrants, a matter that's still unresolved. And as an OTC stock tied to Washington, liquidity and volatility stay high.

Size any position carefully, treat it as a special situation that depends on policy rather than a straightforward operating compounder, and keep an eye on the capital numbers, what FHFA and Treasury do next, and any concrete plans for recapitalization or release. There’s real upside if things move in a constructive direction, but the downside protection is limited until the capital structure gets clarified. This isn’t advice, but a balanced take on the setup.

I'm less cautious than I advise others to be; $FNMA and $FMCC are the two largest single-stock positions in my portfolio.