The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: Skeeter Bug who wrote (242146)	3/24/2010 8:44:27 PM
From: rich evans	Read Replies (1) of 306849

Yes, we will eat the losses for awhile. But the plan is for Fannie and Freddie to earn back their 300 bill in losses. They are doing this by making about 50 bill year before loan loss provisions. Their efficiency ratio is 20% versus a banks 60% so they have very low overhead. In 10 years they will have earned back their losses as now their underwriting is pristine. When this is complete they will no longer be under a conservatorship. In the meantime, yes we the Government/taxpapers underwrite them with our guarantees as they have no capital left to absorb losses. This is the only possible plan and way out. Embrace it. Rich

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