Bove Encouraged By Watt’s Comments On Fannie Mae, Freddie Mac

Federal Housing Finance Agency director Mel Watt’s speech earlier this week gave most people following Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) the impression that he was planning for the future, not preparing to eliminate the GSEs currently in conservatorship. Rafferty Capital Markets VP of equity research Richard Bove actually reached this conclusion after Watt’s speech at the Brooking’s Institution earlier this year, and Watt’s recent remarks give him confidence that government policy on GSE reform has turned a corner.

“Mr. Watt is reshaping Fannie Mae and Freddie Mac so that Congress may never be forced to vote on their status again. He is acting, undoubtedly...