Fannie Mae (FNMA)

Fannie Mae's stock price has fallen so dramatically in the last week because of a combination of factors -- shorting by Wall Street hedge funds, a general downturn in the mortgage market, some ill advised comments by a public official, and rampant rumor and speculation cultivated around the firm by the media.

Fannie Mae is adequately capitalized. Defaults comprise <1% of it's total book, even in the current market. It continues to have the backing of the government.

The stock is undervalued. Buy it now, hold, and in a year or two, you will have made an enormous return.

Simple solution will solve: Merge and sell fannie and freddie to a private company (that can be a group of banks working together with a gov't run insurance fund) that can guarantee and make huge profits for all parties. Of course, before that the gov't has to convince people and institutions to pour huge amount of investment money into FNMA and FMCC before it privatize them.

This mortgage giant can become a multifold stock if the government lets it administer itself, but the fact is they won't. Govt needs Fannie and Freedie to prop up the house market.

What do all three have in common?

They are all invested in Fannie Mae. China bought in with 10% of its GDP. Warren Buffet thought it was a good deal at $1.00, and the US Government knows that the entire market would fall apart if Fannie Mae and Freddie Mac (As well as Ginnie and Sallie Mae) were no longer able to issue Government Securities.

FNMA recently announced a new issuance of MBSs for the first time since 2008. It continues to make progress on its bonds and its debt to shares.

CNBC and the other media won't cover it, but this company is solvent and will steadily reduce its debt and become re-privatized within 10 years, easily.

1. people are going to invest #2government is going to invest and the rewaerd is nice

read the reasons given here why you should buy and you will be glad you stayed away from FNMA or FMCC. not true

Quote from the news source, "Last month, the Obama administration released a white paper outlining its plans for the U.S. mortgage market. All three options published in that paper envision a scaled- back role for the government and eliminating Fannie and Freddie."

Eliminating Fannie and Freddie: Are they going to be gone for good? NO chance of coming back?

Can someone explain?

Regaurdless of the good or bad news you hear its sooo cheap you cant not buy it. Your % of possible gain is too much for me to pass it up. Its worth lossing 500 to possibly turn it into 5000. Its a once in a lifetime opportunity so dont pass it up.

The stock is dirt cheap and the government will not let them go under. If you have time to sit on the stock, I'd bet you will make out very well.

China is watching the events closely because some 10 percent of China's gross domestic product is invested with the troubled mortgage giants. NPR's Adam Davidson talks with host Jacki Lyden about China's stake in the U.S. mortgage industry.Fannie Mae and Freddie Mac are so large and so interwoven in our financial system that a failure of either of them would cause great turmoil in our financial markets here at home and around the globe. The gov will not let this fail, and at the current price, you can't go wrong. This stock is highly undervalued.

http://www.npr.org/templates/story/story.php?storyId=94369826&ft=1&f=1001

Government Sponsored Enterprise: Although there is no guarantee that the government will bail out Fannie in the event of default. Fannie's size and key role in the industry make any collapse costly for the economy as a whole. Moreover Democrat's traditional sympathy towards home-owners, and their support for Fannie improve the of a bail out. The possibility of bail-out represents a diminution of risk: Fannie may be a safer bet than many of its competitors.

FNM is not going anywhere. It is such a HUGE piece of the U.S. economy, and all of us investors (3000 shares for me at 1.08)will, eventually, be rewarded for putting money behind our words. Of course it may take 18 mos. to realize some significant returns, but it will happen. Its the nature of the market. Stocks go up and down. They look terrible at their lowest (when they're really not), and they look awesome at their highest (when they're overvalued).

The Treasury Department announced on December 24, 2009 that it was uncapping the credit lines for both Fannie Mae and Freddie Mac for the next three years. This announcement ensures that the U.S. Government will back both mortgage giants for three years, regardless of the size of their losses. In other words, the government has essentially guaranteed the survival of both Fannie Mae and Freddie Mac for the next three years.

At the same time, the top U.S. housing regulator approved executive compensation packages for both the CEO's of Freddie Mac and Fannie Mae. Both CEO's have total compensation packages of up to $6 million, helping both mortgage agencies attract and retain top talent.

I Had A Dream Fannie Mae will soar. Its a Good Karma stock. When you buy stock in Coca Cola or McDonalds or Walmart you are purchasing a share of America's destruction. Fannie Mae Loses money when people get foreclosed on. Fannie Mae makes money when people dont and when folks are able to pay their mortgage, therefore Fannie Maes success is tied to something good rather than something evil. I know this isnt Wall Street talk but its a a good point i think.

With US Government backing on this mortgage gaint, it worst time had been passed away. By measurement from its historical performance, it's just remained 3% (US$1.92 to exceeding US$70 per share) when compared to its highest market value. A high percentage of increased will be seen in the following months once economic recovery has been proven.

Clear Skies Ahead: The collapse of the subprime market, along with rising interset rates, have cut into home sales, but because of its refusal to dip into variable rate mortgages, Fannie is well positioned to weather the storm and emerge strong.