Fannie Mae-No Politics (FNMA)

[Donotunderstand]

and that would be an $8 common ?

does not seem right

[Donotunderstand]

Interesting
i too would see the JPS in F and F I hold at 50% ($12.50) --- or say half of it for sure

Using Yahoo Finance Historical Data by month for FNMAS here is what I found

DJT was elected Nov 2016 ---

Between Nov 2016 and March 2017 --- the month end PPS ranged $8.22 to $6.60. (Month end price)

The high end of month is $9.27 during January 2017 -- and if I look by week - it did hit 10 for two weeks in March 2017

If DJT wins - if JPS goes to say $9 - I will sell 75% of the JPS

[krab]

Then liquidate 100% of your position & piss of from this board !!!

[EternalPatience]

Would micro KT or Nano KT be the right insult in that case?

[JOoa0ky]

I never said I had no position.

I sold off ~25% a few weeks ago.
I still have 75% of my original position left.

As much fun as it is to hang out with all of y'all. I'm preparing to exit at a moments notice as soon as it seems semi favorable. I'm not sitting through all of the ending credits of this movie.

It's been way too long.

Anywhere from $8-12 around election time is enough for me to reduce down another 50%... Aiming for 25% left by the end of this year. However, if price holds around that range after Jan 1st.

I will be exiting completely down to 0%

[stockanalyze]

"I'm liquidating at least half of my position"
you have posted this at least once before that you are liquidating half. lol. you have also posted that you have no position, you are funny.

[stockanalyze]

"Last I saw of you on twitter you were pitching it short "spicy trade" to a crypto hedge fund. You are a liar."
right on but don't worry he had no editorial assignment and was day off . look at it 30 posts within 2 minutes.

[The Man With No Name]

Ok mini kt. Obviously filing another claim against the Gov for the net worth sweep would not fly for the reasons you state. However, FHFAs duty to act in good faith and fair dealings is still mandatory should the current SPSPA terms and conditions be implemented and as a result undermine legacy shareholder share certificates.

Mini KT huh? You can't even make a proper insult, assuming that's what you're trying to do. If you want to compare me to KT fine, I don't care. Because he's right.

Now what is this gibberish about "SPSPA terms and conditions be implemented and as a result undermine legacy shareholder share certificates".

Like what? Exercising warrants? Converting the SPS into commons? This wouldn't harm the JPS thus no claim. Legacy commons don't have contracts.

The (new) lawsuits are over.

[Barron4664]

Ok mini kt. Obviously filing another claim against the Gov for the net worth sweep would not fly for the reasons you state. However, FHFAs duty to act in good faith and fair dealings is still mandatory should the current SPSPA terms and conditions be implemented and as a result undermine legacy shareholder share certificates.

[skeptic7]

As usual, you state the facts only in a way that supports your narrative. This would be accurate only if you included the fact that DJT wanted to fire Watt on day one but because of language in place (that was ultimately reversed in Court) Watt could NOT be fired.

[Donotunderstand]

The simple answer - with no context
I do acknowledge that capital appears to be growing under DJT
And as I have said - to be fair to me - that while overall I liked BO - he funked us with the illegal NWS

Now - more context
I believe in 2018 or so Mel Watt convinced Mnuchin (who may be the real culprit) to allow F and F to keep 3B each as cash - capital. Does that ring a bell ? So yes it started under DJT MNUCHIN WATT

but - the total ability to count lots of money - earnings as capital comes with a MASSIVE catch
For every dollar of capital - and it is capital - that F and F grow (by keeping cash !!) the obligation that Treasury keeps on it books - the LP - that to ESCAPE conservatorship if Treasury so insists -- also grows by $1
So - as you have seen me say over and over - to me its smoke and mirrors
F and F keep cash - but write an IOU to TREASURY - that at its discretion it can collect for same $
now
as I see it- here is the lay of the land on capital given that the cash/capital is building up at F and F - but the LP is also growing - dollar for dollar!!!
IF TREASURY decides it wants the full LP obligation then nothing good was done - that cash capital is wiped out to zero - to zero as GOV calls in the IOUs
IF TREASURY decides to reduce (cut by 50% or kill !!) the LP obligation THEN and ONLY THEN
the capital in cash that F and F hold becomes - that day - TRUE capital and we win and I will post a TY to DJT

[Donotunderstand]

oops
reading more and more of your various responses

you assume - expect a SR to common equity conversion ---- and JPS to be worth 50% or more of PAR - and indeed common worth MAYBE MAYBE 8

[Donotunderstand]

IF
IF the below is true ---- and true for JPS and Common - why own only JPS?

Not without running FnF through receivership and transferring their charters to newcos. This is fully half of my investment thesis in the juniors.

i.e. if this is not going to happen (50-50 or whatever) would not common be in similar position ?

[Donotunderstand]

thank you

while numbers in the billions begins to lose meaning !!! as people talk about 2T impact of this or that

those numbers seem something the GOV BS could "lose" without insane impact - but noticeable

I assume they are listed as either equity or assets ?

[The Man With No Name]

You're more than welcome to file suit. Then you can learn about res judicata, limitations and standing.

"the common law of contracts is an unmovable barrier to implementing the SPSPAs"

LMAO.

[imbellish]

I expect the commons to rise and fall roughly in line with the juniors until recap/release time so I wouldn't short them, at least not for more than very short periods as an attempt at statistical arbitrage, but I avoid them entirely.

Last I saw of you on twitter you were pitching it short "spicy trade" to a crypto hedge fund. You are a liar.

[tford]

“we still live in a free society based on the rule of law“. Good Lord….. you must’ve been in a coma for the last 20 years!

[Barron4664]

Hi Kthompt, I am pretty confident that your explanation of a breach of good faith and fair dealings is wrong and why it would not carry foreword to new claims. As I understand it, the implied covenants arise from common law. In the United States, they are a permanent feature of all contracts imposed on all parties to a contract. Can a judge or court ruling really make it go away because of a prior ruling of 800 million awarded to shareholders? In the case of GSE shareholders, the implied covenants are a permanent feature of the share certificates (contracts). The covenants are separate and distinct from the fiduciary duty to act in good faith. That duty arises from Statutory law, and can be waived and indeed has been waived. Because of the terms of the Conservatorship, the FHFA-C assumes the role of the GSEs as the counter-party to the shareholders in the share certificate contracts. FHFA-C under common law (implied covenants) has a duty to act in good faith and fair dealings in upholding the terms of the share certificates.

Because we still live in a free society based on the rule of law, this inconvenient fact pattern of the common law of contracts is an unmovable barrier to implementing the SPSPAs as they are currently written. The SPSPAs do not square with the letter or spirit of the applicable laws and clearly undermine the terms of the existing (legacy)share certificates. FHFA had the opportunity to put the GSEs in receivership. The implied covenants would not have applied and congress could have drafted new charters and created a new housing finance system. FHFA chose instead to be a conservator. Common law is the foundational law of the United states, upon which all of our statutes are based on. Common law requires that FHFA-C for as long as it remains conservator must act with good faith and fair dealings with respect to the terms of the share certificates. It cannot be satisfied and waived in the future by a court ruling awarding monetary damages. The duties remain. I believe shareholders can continually sue to prevent the terms of the contracts from being undermined by a Conservator who fails to act in good faith and fair dealings. In my opinion the current terms of the SPSPA continue to undermine the shareholders. If I am wrong, please educate me. Be specific, if you know of court cases that support your thesis that the Lamberth Court case puts an end to future litigation of implied covenants because a Jury awarded money damages please let me know.

[Donotunderstand]

Bye
(F and F are not going anywhere in PPS until they "either disappear or EXPLODE to the upside")

Do you think DJT was good for us - equity holders of F and F - as the expectation PPS went away entirely - and what was left was a growing LP obligation to Treasury and a capital level that is WAY TOO high --- (F and F keep passing every STRESS test with flying colors at current capital shown on books --- but the level required - as set by DJT - is way way higher --- WHY? (in the pocket of TBTF banks?)

[Donotunderstand]

tariffs
DJT loves them - 100% on EV cars from CHINA promised (to both save MUSK ass and ..)
DJT - unfortunately IMO - keeps saying the CHINESE pay the price ($ cost) of tariffs v tariffs are inflationary as we pay higher prices (duh)
(A legitimate debate - tariffs to protect industry -- VERSUS lower prices and lower inflation)

YET - right now - this raise in tariffs is a political move to show he is protecting US production in key areas OF THE SUPPLY CHAIN (having fun as supply chain was not a word - phrase 99% of us knew two years ago -) . THE news of protecting is now --- and the price we will all pay in higher prices (for Chinese Goods and their sister goods made here) will not show up until CY25

meanwhile lower mortgage rates - F and F - may yet happen this CY with the 3.4% Year over Year (trailing) CPI (v 9% a year ago or whatever)

[trunkmonk]

Just a fraction of KTCarneyCorker. GSEs have real shareholders, none of them hold shares. They just make up stories, then make up friends to pat them on the back so others may follow down the wrong road. They said 10c at 30c, now it’s 1.5. They make laser focused losses in courts, shareholders gain with every case.

[Fannie Heyyyyy]

Kthomp, thanks for taking time to respond. Very interesting scenario, and one I tend to agree with. Gov't is going to maximize all they can upon exit. Shareholders will just have to deal with it.

Based on your thoughts about the possible scenario of converting the seniors to commons and JPS into commons, am I understanding this right?

I'll calculate JPS shares at 50% and 100% par with a low conversion to common at .25 cents per share and $2.00 per share based on your speculation.

30k JPS shares at $12.50 (50% par) = $375k
$375k ÷ .25 cents (conversion to common shares) = 1,500,000 common shares.

$375k ÷ $2.00 = 187,500 common shares

_______________________________________________

30k JPS shares at $25.00 (100% par) = $750k
$750k ÷ .25 cents (conversion to common shares) = 3,000,000 common shares.

$750k ÷ $2.00 = 375,000 common shares

Is this what could happen in the example you laid out to me? Interesting.

[JOoa0ky]

If Trump cinches the election in November, the euphoria could very well send the JPS close to 50% of PAR... since historically it has reached that high multiple times in the past.

I don't know about you but if your predictions is anywhere from 50-100% of PAR... I'm liquidating at least half of my position if it goes near 50% of par.

A double from 50% of PAR can be done with much less risk in another stock...

[Sammy boy]

Barnum & Bailey is seeking employment, I think you would be an asset. How many ID’s you think Tightcoil and Niagra have?

[JOoa0ky]

That's according to Fannie Mae. There's no input from me.

[Freddie bagholder]

Lol

[Wise Man]

JESUS! Can't you see that dividends and today's gifted SPS LP are Capital distributions restricted?
Both number 1 in its statutory definition, just in case you haven't learnt it in a book in Finance: a dividend is a distribution of Earnings (Retained Earnings account is Core Capital) and SPS are capital stock (The Lamberth rebate is number 3, approved through the CFR1229.13 in the Final Rule of July 20, 2011)


The exceptions kicked off in order to legalize them, despite the desire of FHFA and its Hedge Funds guard to turn itself into an outlaw Federal Agency, under the FHFA-C's Incidental Power "any action authorized by the Rehab power", that states: "Restore FnF to a sound (Recap) and Solvent (reduce the SPS) condition".
◾️Reduce the SPS (U.S. Code §4614(e)): 10% and NWS dividends (it recapitalizes at the same time, as the SPS are reduced with simple cash, not with cash dividends.
◾️Follow-on plan: "(c) it supplements.....". Exceptions 1, 2, 3 and 4: For their Recapitalization: CFR 1237.12 in July 20, 2011:
Either
- Outside the balance sheets when they saw that the SPS were going be fully paid down soon (end of 2013 and end of 2014, in Freddie Mac. -Chart below-, and Fannie Mae, respectively), the FHFA needed another exception to apply the dividend payments towards (assessments FHLB-1989 style, not actual dividends).
And
- Internally, with the Common Equity held in escrow, currently in place in the 3rd phase with the SPS LP increases 1:1 Net Worth increases, as compensation to UST in the absence of dividends. It works as follows: FHFA: "Just joking! It'll be unwound. Zing!". No intention of these gifted SPS as of December 2017, to stay, due to the fact that they are already missing on the Balance Sheets ($132B). Financial Statement fraud though.


The scammers are pressing so hard playing the fool, that now they are called The Diapers Gang.

Bradford is living the American dream: to work for a renowned hedge fund manager and mess around with the retail investors 24/7, like many others.
SPS Write down means debt forgiveness, Argentina-IMF style.
There aren't SPS outstanding under the Separate Account plan.

commons up today, hooray!
in my view, they have value if the government writes down the value of its spspa.

[Wise Man]

The JPS trading based on its fundamentals is shown in its fair value chart during conservatorship, under the Separate Account plan, that is, a normal conservatorship carried out secretly.
The underlying security is an obligation. A fixed-income security with a legal claim on dividend (coupon) payments and the par value. It trades close to the par value all along, depending on the market interest rates in relation to its coupon, just like a bond.
With the dividend suspended as per its contract or prospectus (at the BOD's discretion) and the statutory Restriction on Capital Distributions, it trades at a discount to par value, discounting the time period to resume dividend payments.
This is the chart with a 6% discount rate, assuming the dividend was resumed under the Table 8: Payout ratio, with the 3Q2022 results.


The JPS holders like Berkowitz are annoyed with this chart (primarily, in comparison with a common stock that trades at x times the EPS) and embarked on a con operation in the U.S. courts when they learned that the UST in 2011 required the Basel-framework for capital requirements for the release from conservatorship, but this is their fair value. JPS have this risk and this is why they get a higher dividend rate than the interest rate on similar obligations by the same issuer. He thought that he was outsmarting them, with no strings attached.
It has ended up with Mnuchin requiring, as compensation to UST, SPS LP increases (another capital distribution restricted) 1:1 Net Worth increase in FnF, so that later he requires that the same haircut for these gifted SPS, be applied to the JPS of his buddy, Berkowitz (Calabria told us in his book).

This is Regulatory Risk (Leverage ratio or Minimum Captial Level: Core Capital > 2.5% of ATA, versus 0.25% before, for the off-balance sheet obligations -MBS Trusts-.). Even an additional 25% of the Prescribed Capital Buffer is necessary (Table 8 of the Capital Rule: Payout ratio) to recover the par value.

Then, Conservator Risk. FHFA-C, in the best interests of FHFA-R, is maintaining the dividend suspension seeking "Membership cleansing", that is, fetch CET1 > 2.5% of ATA, so that the JPS (AT1 Capital) can be redeemed before the Privatized Housing Finance System is unveiled (Tier 1 Capital > 2.5% of ATA), FnF were bound for, since it was chosen for the release by the UST in 2011.
A replica of the FHFA final rule of 2016, about the expulsion of the unwanted members of the FHLBanks.

[Wise Man]

Good or bad, the companies have fundamentals and that's the stock's fundamentals.
For instance, FnF post $0 EPS every year due to the ongoing Common Equity Sweep. Then, applying a Forward Price-Earnings Ratio of 10 times, $FNMA and $FMCC Target Price for the end of 2024 = 10 x $0 2024 EPS = $0.

The S.E.C. is in charge of the well-functioning of the financial markets and thus, make sure that the stocks trade accordingly, otherwise there is stock price manipulation behind.
$GME trading at PER 1,500 times, looks more like a plot by Blackrock's Fink and Trump's former SEC chair, Clayton, now Mnuchin's lawyer in the $NYCB off market acquisition, attempting to discredit all those that claim that the stocks trade based on fundamentals, because they are the ones that have made up the concept of "tokenization of the common stocks", that is, deprive them of their value (a legal claim on all the future EPS, plus the existing Retained Earnings account) and turn them into "unbacked tokens" in order to hold up their grand scale fraud with this security.

[jog49]

Looks like Dr. Lye can't keep a job very long anywhere she's been.

[FNM500K]

KTcarney and kite boy posting frenzy today. Sounds like we have a good week ahead 🤣

[TightCoil]

Fight Back - Fight to Win
Fannie Mae - All the Way Go-Go-Go
Fight to Right the Wrong done to Shareholders
Protest - Complain - The Conservatorship has gone on for too long

[EternalPatience]

Oh you don't own commons? I thought you did..My bad

[Forrest Gump Luck]

I can see us getting screwed by the impending implosion of commercial real estate. 20 trillion dollar problem. Usually the way to handle too big to fail real estate is to punish the savers. Either inflate your way out of it, or? Sometimes I suspect that Paulson and cohorts don’t want to get money from monetizing GSE stock, rather they are going to get money by using fnf to bailout all the empty office buildings.
All the towers in LA are empty and underwater and have 4% 10 year mortgages that are all about to go into default.
I imagine that will crash everything. The banks are going to go broke.
Paulson is simply doing the same thing he did betting against the residential market, just on a larger scale in the commercial game.
All those office buildings. Not just the towers, but the 6 story office park cubes are now worthless and the banks are going to get stuck with them.
Mnuchin and Paulson will have cash after the crash and buy them cheap then sell them after the taxpayer gets stuck with bill.
Too bad it’s impossible to make them sensible residential.
I wonder what this crash is going to look like.
Anyone have ideas of how to make money on the coming commercial real estate crash?

[bradford86]

I think that we are closer to the end than the beginning. But the spspa kind of is the problem for why i dont own commons. Either the spspa has value or the warrants/commons have value.

[Viking61]

The FNMA chart is following a little bit behind but is making positive strides! GLTA!!

[Viking61]

That FMCC chart is setting up nicely for a continued move upward! GLTA!!

[real777mellon]

1 week chart showing $FNMA cannot be held down much longer. #moonshot 🚀 pic.twitter.com/XpiDrISOz3

— Stankonia Capital (FTP FJB VLLC MAGA) (@StankoniaCap) May 15, 2024

[The Man With No Name]

FnF closed at $1.51

hopefully the start of something

Don't be surprised if the bottom falls out.

[Patswil]

FnF closed at $1.51

hopefully the start of something

[The Man With No Name]

FnF's enormous regulatory capital holes cannot be filled unless the SPS are written down, converted to commons, or some combination of both.

Even with that happening, FnF would have to raise capital, and no capital raise is possible with the SPS overhang currently in place.

Exactly. I see no alternative to the example set in AIG.

[EternalPatience]

Time to make electric homes

[Wingsjr]

What? You just ignore that FnF started retaining earnings during who’s Presidency?

[kthomp19]

KThomp, you appear to have a solid, in depth understanding of FnF history as it pertains to FHFA and Treasury.

Thank you for the kind words.

How do you see the preferreds and commons doing? I realize there are numerous possible outcomes, but I'm curious what you think.

Short version: I think the juniors will end up with somewhere between 50% and 100% of par (stated) value via a conversion to common. Not converting the juniors makes no sense due to the CET1 capital requirement in the ERCF.

I think the commons are worth about $8 at the most when FnF are recapped and released, and that's only if Treasury chooses to write down the seniors entirely. If they convert those seniors to commons instead, as Mark Calabria wants them to do and as KBW expects, they will be worth somewhere between $0.25 and $2.00 per share, depending on how FHFA and Treasury structure the transaction. Probably towards the lower end of that range since there is no reason for either FHFA or Treasury to fear any lawsuits and that the situation for FnF common shareholders is far worse than that of AIG common shareholders, who got diluted down to 8%.

I expect the commons to rise and fall roughly in line with the juniors until recap/release time so I wouldn't short them, at least not for more than very short periods as an attempt at statistical arbitrage, but I avoid them entirely.

[kthomp19]

I wish they would have wiped out shareholders in 2008.

I'm glad they didn't. If it wasn't for all the government malfeasance that so many like to endlessly complain about, I never would have had the opportunity to make this much money on this investment.

Pre conservatorship shareholders would have sued and won but companies still gone.

Not gone but nationalized. Still, I see your point.

I would have never bought. Imagine where my portfolio would be without this loss since 2009.

Ah, so you're underwater? That's hard to do if you really did buy in back in 2009.

We deserve this to end and get paid dividends, etc.

You certainly seem to be suffering the same fate as the Sears investor in The Zurich Axioms. She lost money in Sears stock and kept buying more and more, chasing it down, to "make her money back".

There is no such thing as "making your money back". Yes, you want to make money, but why does it have to come specifically from FnF common shares? Some cosmic sense of justice? It doesn't exist.

[kthomp19]

WARNING: you all do know he’s a policy wonk and he’s an advisor at the Cato Institute, right? It’s 36 minutes long and you WILL be bored. He has strong opinions about agency independence, banking regulation, housing policy, he does want a combined financial regulator (at a minimum merging FHFA into the OCC), etc.

I listened to the podcast, thank you for the link.

He ADMITS pushing back on the Trump Admin when they wanted him to move on the GSEs because he thought as a regulator he shouldn’t buck what he thought was the will of Congress (HERA).

His quote at 14:53 is "I had fights with the Trump administration when I was an independent regulator and I was willing to push back on things."

However, the topic was the fact that FHFA is not independent anymore and that federal policy on many things, including housing now that the President can fire the FHFA director at will, is subject to a whipsaw effect where things change drastically whenever a President of the opposite party takes the White House.

Calabria's quote did not pertain to the conservatorships. You seem to have misconstrued it. I didn't hear any mention of the conservatorships at all in the entire podcast.

Another good quote by Calabria was at 30:22, though it also wasn't specifically about the conservatorships or even FHFA/FnF: "There's no enforcement mechanism for many parts of financial regulation. Sometimes there's the regulated entity, but external stakeholders - the rest of us - often don't have an avenue to make regulators follow the law."




When it comes to Calabria, something to keep in mind is that he has been much more active on social media recently, and by all appearances is angling for a spot in Trump's administration if Trump does win in November. This could very well be a second stint as FHFA director.

That means that his views can certainly affect FnF shareholders in the future and thus he needs to be given a lot of credence.

[kthomp19]

If you make 4.3B in a quarter and the shares only go for around $1.50 per share. The outstanding shares are 1.16 B shares. The math to me is the made $ 3.70 per share in the quarter.

Fannie Mae's own 10-Q says that "Net income (loss) attributable to common stockholders" was negative $4M and "Weighted-average common shares outstanding" is 5.867B. That comes out to an EPS that rounds to zero.

Source: Fannie Mae 2024 Q1 10-Q form, page 60

I know we are in a conservatorship.

And that's exactly the problem. The common share price won't reflect any economic or voting rights until those rights are restored. That requires both a removal of the senior pref overhang (via conversion or writedown) and an exit from conservatorship.

[kthomp19]

NOBODY, I repeat NOBODY, other than shareholders, especially any Congressmen, agency official, or influential policymaker, cares about the plight of shareholders. In fact, I contend that it is counter productive to contact ANY government official seeking any relief SOLEY on the basis of an appeal to shareholder plight.

Bravo! It is good to know that I am not the only voice in the wilderness on this issue.

Whining incessantly to members of Congress cannot possibly help. It is, as you say, counterproductive because it just makes FnF shareholders look like greedy bastards. There are already members of Congress, like Bill Foster of Indiana, who want all current FnF shareholders to be wiped out.

We are all in this for the money and nothing else. The only differences among us are who is willing to admit it. This isn't about justice or fairness or any of that bullshit. It's only money.

There is a simple question to find out someone's real motivations for owning FnF shares: "would you support a full senior pref writedown plus unwinding the SPSPAs plus returning all the excess NWS money plus a full government apology (etc) if it means you and everyone you know who owns shares has to sell right now at current prices and never buy back in?"

An answer of "no" means they're only in it for the money. "Yes" is basically bullshit; if that were the case they would sell right now. Refusal to answer amounts to "no".

If you all love the cheerleading here more power to you, if it helps you hang in there and find camaraderie, great! As they say misery loves company, but don't be fooled for an instant that you are making a difference to the powers with the boots on your neck. You have a better chance appealing as above, through the backdoor, but for Christ's sake do it smarter!

Amen.

But for some the need to feel like one is doing something is just too much to ignore. To our detriment.

[kthomp19]

I read the comment by 'Rule of law guy' and had a laugh. If you don't understand that the SPS aren't "fully repaid", then you shouldn't be commenting at all. And certainly TH's follow-up was just as stupid.

I had submitted my own response to ruleoflawguy there, but as is Tim Howard's prerogative he chose not to publish it. I put it on Twitter instead if you care to read it.

Text version:

The two problems with trying to have the liquidation preference (LP) offset the funding commitment are:

1) As Tim said, having the funding commitment continue post-conservatorship would be very helpful compared to it disappearing. Also, the LP is valued at $220B on the government's books (as of the most recent Financial Report of the US Government), while the contingent liability of the funding commitment is at most a few billion due to the extreme unlikelihood of it having to be touched at all let alone exhausted, in the future.

2) Treasury choosing to write off the SPS rather than exchange them for commons a la AIG amounts to writing an enormous check to shareholders for no reason. Mnuchin said that it would be illegal and would result in a lot of political fallout according to Calabria's book. While LP writedown would be seen as "fair" by shareholders (though certainly not by people like Senator Warner), I don't see any reason to expect it to ever happen given all the evidence we have.

[kthomp19]

The Conservator is supposed to have a duty to "Conserve and Preserve."

Supposedly yes.

Let's forget the history we all know here and assume this to be true.

No. It is unfortunately false. Page 2 of the Supreme Court's Collins opinion said:

So when the FHFA acts as a con-
servator, it may aim to rehabilitate the regulated entity in a way that,
while not in the best interests of the regulated entity, is beneficial to
the Agency and, by extension, the public it serves. This feature of an
FHFA conservatorship is fatal to the shareholders’ statutory claim.

The fact is that the Supreme Court ruled that HERA allows FHFA to act in its own best interests, even when that runs counter to the conserve and preserve mandate.

How is it they can give away billion$ to low income housing when their stated duty is to conserve and preserve. I would expect they should not be allowed, legally, to give ANY of that money away. Other than being the government that nationalized the GSEs, how do they get away with this?

The first step to wisdom here is to accept what the Supreme Court has actually ruled, and reject what you think "should" be the case.