The Epic American Credit and Bond Bubble Laboratory Message Board

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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: Elroy Jetson who wrote (15897)	6/25/2004 9:37:03 PM
From: Jim Fleming	Read Replies (2) of 110194

Elroy FNMA and Freddie Mac securities are not backed by the U.S.. The risk in the notes and bonds is assumed by the purchaser. The risk in the mortgage pass throughs is also assumed by the purchaser. Both GSE's have been issuing public notice to that effect for several months. GNMA's are in effect backed by the U.S. since the underlying mortgages are full faith and credit obligations of the U.S.. With GNMA's, assuming no illegalities, you will eventually get your principal and interest due. With Fannie and Freddie you are out of luck in a worst case scenario. Jim P.S. Every trick in the book would be tried to prevent that worst case scenario.

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