BAC vs FNMA stock analysis shows that Fannie Mae could support $150 billion valuation with GSE reform

- November 3, 2017

In what might be truly sickening to many Federal National Mortgage Association (OTCMKTS:FNMA), Fannie Mae, advocates and FNMA stock owners, a side by side comparison of its net interest income from single-family homes (not including multi-family) vs that of Bank of America’s (NYSE:BAC) entire net interest income really illustrates just what the government and/or Treasury is taking from the mortgage giant. You may read our explanation along with interactive data and visuals on Hade Platform below:

Why FNMA stock should carry a $150 billion valuation, at least!

FNMA stock climbed to $5/share late last year when the likelihood of Mnuchin as the Treasury secretary was realized. As the former Indy Mac Chair and Goldman Sachs exec, investors knew that Mnuchin saw why GSE reform was necessary. However, his tone has grown much more conservative in recent months, and our belief is that his objectives as Treasury Secretary have changed vs previous roles as Goldman Sachs (cleaning up the housing mess). Fact is that Fannie Mae and Freddie Mac account for a big chunk of the Treasury’s income, billions of dollars every quarter, and that is likely difficult to part ways with.

That said, we are less optimistic than ever that real GSE reform will ever happen. However, the potential gains to be had in the event of a freed Fannie are worth holding onto a small stake in FNMA stock.

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