Fannie Mae-No Politics (FNMA)

[Wise Man]

Primarily, it's an agreement (Purchase Agreement). So, don't say "contract" when the written text says "agreement".

Secondly, the SPSPA must be read in the context of having two laws in force (the FHEFSSA and the Charter Act, as amended by HERA), and it cannot be read in an isolated form, and, specifically, we must pay close attention to the Incidental Power of the conservator, because it allows it to "take any action authorized by this section, in the best interests of the FHFA."
Then, first of all, anyone should have spotted the multiple and ongoing statutory breaches:
-Restriction on Capital Distributions. Exceptions.
-FHFA-C's Rehab power, about building capital (soundness) and reducing debentures (solvency), where the reduction of SPS fits in. A statutory mission spotted by Gary Hindes, but later he removed this claim in an amended complaint. Source.
-The Fee Limitation clause, to see that the original rate similar to Treasuries prevails (estimated at a weighted-average 1.8% cumulative dividend rate with a spread over Treasuries of 0.5%), in exchage for their Public Mission (section Purposes).
-Etc.

Or spot what HERA struck in the FHEFSSA, like the MANDATORY release from a conservatorship for Critically Undercaptialized enterprises, with a Capital Classification of Undercapitalized: Core Capital or Tier 1 capital > 2.5% of adjusted total assets nowadays. Which implies that FnF have to build capital during conservatorship for their financial rehabilitation.

Or spot what Calabria forgot to include in the FHEFSSA with his amendment of HERA: the typical 18-month IMPLEMENTATION provision when a law requires changes, that has allowed a "back-end Capital Rule" (revealed after the Transition Period to build capital and not before as usual), in an attempt to mislead us ("The capital built is gone!", with Pagliara's clerk, Guido, repeating it in his daily crazy tweets).

Finally, spot that the FHFA and the UST already carried out a Separate Account plan with the FHLBanks in 1989, through the statutory provision entitled SEPARATE ACCOUNT FOR THE REPAYMENT OF PRINCIPAL: amounts reinvested in zero coupon Treasuries, so the face value matches the principal at maturity, and the Treasury Department in charge of calculating the discount rate for this scheme.

All in, anyone could have come up with the idea of a Separate Account with FnF as well, because it's a plan that legalizes all the aforementioned statutory breaches, thanks to the Incidental Power "any action".
Therefore, anyone can come to the conclusion that the capital distributions necessarily have been assessments sent to Treasury, just like the FHLBs did (too bad that they had to pay $300mll in interests annually. A 10% interest rate with a 0.299% spread over Treasuries), under the guise of capital distributions, applied towards the exceptions in the law (Applied towards the reduction of SPS in full, as dividends are restricted, as per the U.S. Code 4614(e). Later on, the July 20, 2011 CFR 1237.12 added another exception, either 1, 2, 3 and 4: "For their Recapitalization outside their Balance Sheets". External Position), otherwise they are restricted and a breach of the FHFA-C's Rehab power (soundness).

Also, it complies with all the financial concepts, because a dividend wasn't available if it's a distribution of Earnings, and it's been Accumulated Deficit Retained Earnings accounts all along.

It includes the SPS LP increased for free as compensation to UST, another capital distribution like a dividend payment. Necessarily, the common equity being reduced as a result (concealed with Financial Statement fraud: gifted SPS and its offset, absent from the balance sheets), is held in escrow (the necessary CET1 for recap.)

BOTTOM LINE
This is why the plotters cling to "SPSPA, a contract", so the broad picture with the laws in force goes unnoticed.
Laws covered up in court to that end. This why the abuse of court process has been an essential tool by the plotters.

Now it's when the SPSPA is lawful in its entirety, thanks to the FHFA-C's incidental Power: "Zing!".
There is nothing up for interpretation in the law, or Chevron doctrine, but it's been all about people playing the fool.
Timothy Howard recently in his blog: "Separate Account? I don't know what that means", when it's the title of a statutory provision for the FHLBs when he was CFO of Fannie Mae. He must have heard of it for sure.

"May" in the power, doesn't mean that the conservator is excused from complying with its statutory mission, once the capital has been generated. Kind of "May? Now I don't do it!".
"May" is an authority in statutory wording, not a choice.
"May" grants some leeway but about activities from the regulatory point of view, like recently with the announcement of delisting in a bond in Freddie Mac, arguing that it was the only series trading on the NYSE, and it has cost the company money. That's why the "may" is necessary in the process of building capital.

The lawmakers have had their constitutional duty of overseeing the FHFA unaffected, and they have authorized this separate account plan with their omissions.