Fannie Mae-No Politics (FNMA)

[Wise Man]

One thing is that the FHFA suspended the Capital Classifications in 2008 and the capital requirements aren't binding, which is typical of conservatorship, pursuant to the "may" in the FHFA-C's Power: "may put FnF in a sound and solvent condition" and also the FHFA-C's Incidental Power: "Any action authorized by this section, in the best interests of FnF or the FHFA". That is, it's necessary so that the conservator has some leeway to administer the conservatorship, at the time when the companies and the economy are bleeding and still do and in need to fix their operations, organization,...15 years later, that's why the FHFA director still needs the powers and rights from FnF and ours.
In other words, this way, the conservator isn't tied up.


And a different thing is that:
1- The capital requirements must be published because they are statutory (FHEFSSA). This is why FnF have posted the Minimum (Leverage) Capital requirement on their Earnings reports every quarter since day one. The Risk-Based Capital requirement was missing because HERA struck the entire section in the FHEFSSA with the formulaic, with the mandate to the director to come out with a new one.
Not "binding" but they are good to know.
Freddie Mac:


2- You seem to suggest that, because there are no capital requirements, FnF aren't required to build capital. Then, you can take all their capital generated away. Even without thresholds (requirements), they have to build capital.
This is the typical "playing with the words" by the Fanniegate attorneys we are used to. We need to know the thresholds to track the capital shortfall, evaluate their soundness and solvency and to uphold the FHFA-C's power (which means to restore the capital levels: recapitalization), and I've already mentioned that "may" is imperative once the capital has been generated and not a choice, in the legal dictionary.
That is, the statutory capital levels are financial indicators of the financial condition in a financial company.

3- The suspension of Capital Classifications doesn't mean that the statutory section "Capital Classifications" was suspended or repealed, which is another take by the Fanniegate attorneys, where all the definitions regarding capital are set forth, so we learn that the Minimum (Leverage) capital requirement is met with Core Capital and added in the Capital Rule, the CET1 Capital and Tier1 capital; that the Risk-Based Capital requiement is met with Total Capital; that there is a Critical Capital level called "irrelevant" by the FHFA because it triggers a conservatorship during a conservatorship, but it forgot that it needs to be published regardless, currently illegally absent from the ERCF.
They aren't met with the capital metric "Capital Reserve".
The plotters don't like the rules, this is why the Mnuchin Treasury Department recommended Congress to repeal these FHEFSSA definitions in its 2019 UST Plan at the request of a Presidential Memorandum, which attempted to substitute the real 2011 UST 3-option Privatized Housing Finance System for the release, at the request of the Dodd-Frank law and a Report to Congress.


4- The key for the suspension of Capital Classifications that didn't bother to anyone in the first place: somehow the plotters think that, pretending that it was the FHEFSSA section Capital Classifications what was suspended too, commented before, the Restriction on Capital Distributions (U.S.Code §4614(e)) was repealed too, because, HERA, surprisingly, inserted it at the end of the section, whereas the same provision is a stand alone section: Prompt Corrective Action in the banks' FDI Act.
HERA:





5- Likewise, the fact that it took 12 years for the FHFA director to come up with the changes in the capital requirements of the FHEFSSA (18-Month Implementation section, missing), that it was authorized/mandated to carry out in an amendment inserted by HERA (Capital Rule effective February 16, 2021), doesn't mean that FnF don't have to build capital for their financial rehabilitation in the meantime. That is, the typical Transition Period to build capital given by any Federal Agency when there are changes, and the Equity holders have suffered Regulatory Risk (Basel framework for capital requirements, in light of the 2011 UST Plan). It has just made it a "Back-end Capital Rule".
Besides Conservator Risk, not only for the Separate Account plan (Legal, except the 7 Securities Law violations in the process), but also for the extended period beyond what would have been reasonable thresholds for the release (Undercapitalized: C.C. or Tier 1 Captial > 2.5% of ATA. Mandatory release in the prior FHEFSSA; or the resumption of dividend payments afterwards), but "in the best interests of the FHFA" (membership cleansing) it has been extended to CET1 > 2.5% of ATA, so FnF can redeem the JPS (AT1 Capital) and still meet the ERCF with Tier 1 Captial > 2.5% of ATA.
Wait! Because it was extended one quarter more to 4Q2023, so that the laggard Fannie Mae meets the threshold for the resumption of dividend payments (25% of the Prescribed Capital Buffer. Table 8: Payout ratio) after the redemption of JPS, and under the Separate Account plan.

[FOFreddie]

Hi real777melon - where is Jami now?

[Augie Boukalis]

There trying to get the judge to dismiss it, it won't happen not with an 8 0 jury verdict 🛹🌵🇺🇸

[Rodney5]

No, I did not see where Sandra filed a motion to throw away Jury verdict and throw away Lamberth verdict in Lamberth court.

Link to the defendant's motion to appeal? Will you kindly share it. Thanks

[bradford86]

I see replies to your posts. You contribute nothing here but persistent willful ballads for fighting and are clueless where the battle even is. Push for the political folks to end the conservatorships. The courts are not going to get them out. That ship sailed. Good luck

[MRJ25]

Delay, delay, that is all it is!

[1203Simon]

Tru ‘dat.

[stockprofitter]

Long overdue

[Augie Boukalis]

I always hold a core position in fnma fmcc but I am ready to buy cheap again we will see what happens tomorrow 🛹🌵🇺🇸

[Patswil]

Actually l think we’re all ready for exit now

[Augie Boukalis]

We want it to come down for a couple of months so we can buy more then the run up to the election we can sell 🛹🌵🇺🇸

[Vancmike]

I think SCOTUS will rule on the CFPB case before their end of term, June 30th.

A positive ruling of government overreach may help put FHFA in proper funding by congress.

[TightCoil]

Keyword: Corruption

[Freddie bagholder]

lol @final. Did you not see Sandra filed a motion to throw away Jury verdict and throw away Lamberth verdict in Lamberth court.

The Clown Skateboard must be wondering why she filed that?
Simple reason is she was appointed there by vested interests that gain from having GSE's in conservatorship.
So they appointed Dumb Sandra and now Sandra is paying them back by throwing wrenches every step of the way.
Only thing she can do is delay, delay and delay - because for anything else she needs some brain which she has none.

[stockanalyze]

wild cards
-libor settlement or triple recovery if goes to trial. huge. is someone here tracking the progress?
-cds insurance recovery in billions . not much idea on this.
but could these 2 add ~300 billions to the bottom line of fannie and freddie?
well the banks would go under if so happens, govt rather have fannie and freddie take the hit to save banks, as usual.
maybe they will allow it as it would provide adequate funds for affordable housing by declaring fannie and freddie overcapitalized. yes, all of a sudden as that is the only way out for affordable housing to make a real impact, not few billions.
or just a wishful thinking
triple aaa rating : haven’t done much in the past
lamberth: defense wants to prove they did everything and lost, so release them? or a wishful thinking? or they are going after the fact that rights of shares don’t travel in case of payout or settlement and investors who bought after net worth sweep knew it well. lamberth would not agree to this as he has ruled in the past that rights do travel with shares. don’t know. i assume 99.99% of those who bought pre net worth sweep have sold already. so govt gets to keep all of it and the plaintiff class action lawyers get zilch of their 30% payout.
just hope calabria, the architect of hera and screwing this up even more by asking exorbitant capital levels, hiding stress test , does not keep tweeting bs and trying to be relevant. hope they don't put another calabria like. the good news is scotus allowed to fire them in a whim

[blownaccount9]

They already appealed so I don’t think it matters…

[FNMAstalker]

Since the Judgement was against the government they have 60 days from 3/20. So 5/20.

[TightCoil]

Don't Fold
Hold for the Gold

[Guido2]

Thanks for the feedback. If I get enough likes and retweets will add to the thread and elaborate on each of the three areas where the politically connected are benefiting from the conservatorship.

[Golfbum22]

Might want to explain fake jobs to Clowngress as they are not that smart

Jobs given to family and friends
Overpaid to not do much

Why are the gse’s funding the Fhfa?

Etc

Great job!

[Guido2]

Are Fannie Mae & Freddie Mac being kept in a fraudulent "temporary" conservatorship for the enrichment of the politically connected through:

A) Fake jobs at FHFA?
B) No-bid contracts?
C) Sandra Thompson's CRT Program?

FREE FANNIE!
FREE FREDDIE! https://t.co/FnapIFf3ip

— Guido da Costa Pereira (@GuidoPerei) April 21, 2024

[Sammy boy]

What does a wait equate to in dog years?

[juicyjuice10002]

There is good cause to fire this woman and others involved.

[navycmdr]

FHFA no-bid contract deal -

In May 2023, I pressed FHFA Director Sandra Thompson on Doma Holdings: pic.twitter.com/NKeDYXNTw2

— Congressman William Timmons (@RepTimmons) April 19, 2024

[stockprofitter]

Good. So they are moving forward with insurance :)

[Rodney5]

You mentioned critical capital levels and somehow you believe everything the government has done is legal. What will happen? Will the government reverse the stranglehold on the company?

Although Fannie Mae is gradually rebuilding its capital base, capital levels remains substantially below regulatory requirements. Fannie Mae is subject to the enterprise regulatory capital framework (ERCF), though capital requirements have been waived during conservatorship. While Fannie Mae had a GAAP positive net worth of $78 billion at YE23, the ERCF excludes the stated value of the senior preferred stock ($120.8 billion), as well as a portion of deferred tax assets, resulting in the Company being significantly undercapitalized. Indeed, at YE23, the shortfall to adjusted capital requirements totaled $243 billion, with the Company reporting negative regulatory capital ratios given deficit for each tier of capital. Given covenants under the PA, Fannie Mae also does not have access to equity funding except through draws from the U.S. Treasury (and only when total liabilities exceed total assets).

[Guido2]

There's at least one politician looking into FHFA's sweetheart deals with those that are politically connected:

Last year, I pushed back against a sweetheart deal that gave Doma Holdings, a politically connected company, a no-bid contract to run FHFA’s title insurance pilot program. The program was then rescinded….until this year's State of the Union when President Biden announced this… pic.twitter.com/nquyOJifeM

— Congressman William Timmons (@RepTimmons) April 19, 2024

[Wise Man]

BOOM. This image from JPM illustrates my point: the PLMBSs skyrocketed just after FnF were placed in Conservatorship.

Trough date is the date the PLMBSs hit the bottom. We see that in most of the different groups, it was 3 months after the day of Conservatorship. Other, one year later.
Later they skyrocketed (From trough date to the end of 2009, up to 30% higher)

[Ispro]

I dont think, we will ever get damages

[Fannie Heyyyyy]

We will see Jog. We will see.

[LuLeVan]

Has the Lamberth ruling now become final because the 30-day period has expired? Or does the defendant's motion count as an appeal that extends the deadline? In other words, until when do you have to have FnF shares in your portfolio to receive the damages from the Lamberth ruling?

[Wise Man]

The link between unrealized losses and the conservatorship is clear.
FnF were placed in conservatorship pursuant to the FHEFSSA section 1367(a) APPOINTMENT OF THE AGENCY AS CONSERVATOR (which, by the way, was an amendment inserted by HERA in the FHEFSSA), according to the SPSPA:


Although it isn't specified, there are 12 reasons for the conservatorship at the discretion of the FHFA.
Likely, it was chosen (G) LOSSES: Likely to incur losses that would deplete all of its capital.
Related to future (fabricated) losses, not past losses as Washington Federal (bailed out by the Treasury Department in 2008) claimed in court in a clear case of misrepresentation of the law.
Spot on! Those future losses came true if they were all fabricated:
-The 10% dividend to Treasury.
-The DTA valuation allowance.
-Outsized provisions for loan losses caused by the prior Incur Loss accounting standard and the Obama's programs, as FnF were compelled to set aside a reserve equal to the concession granted to borrowers, not the actual expected loss (it was changed in January 2020 for the CECL accounting standard). An amended in 2011 ballooned the borrowers elegible, as now, it was up to the management to decide if one borrower current on its mortgage payments was at risk of default.
-The initial $1B SPS LP issued for free, it reduce the Additional Paid-In Capital account (Core Capital) in the same amount (currently in place with the SPS LP increased for free every quarter, but the managements commit financial statement fraud by not posting both operations on the balance sheets)
-The mispricing of the PLMBSs.

Their ambition to prompt losses, so more SPS LP is increased, fired back, because the dividend was restricted and unavailable, and instead, it was a separate account for the reduction of the principal of the obligation, similar to the one with the FHLBanks in 1989.

Finally, have you noticed in the screenshot that the FHEFSSA is cut short with "FHE Act"? Typical in documents. But then, it has deviated to today's "GSE Act" in the Earnings reports from FnF.
This way, they seek to delete any trace of the FHEFSSA that contains the only authorized capital metrics and their definition; the capital classifications and definitions, to see that the Minimum Leverage Capital level is met with Core Capital or with CET1 and T1 Capital added recently, and the Risk-Based Capital requirement, met with Total Capital. They aren't met with "Capital Reserve", an invalid capital metric in the FHEFSSA and badly assessed (adjusted Capital Reserve = $0), only used by the Federal Reserve System in its battered Balance Sheet (Called "Capital Surplus" but it's the same concept).
"GSE Act", looks more like the Charter Act, which is also being concealed.

This is like other plotters all day with "HERA, HERA, HERA" (Rosner and the plaintiff Joshua Angel and khtomp19 on this board), when it's the FHEFSSA (and the Charter Act) as amended by HERA. Never HERA alone.
They don't want you to see what HERA didn't amend: Critical Capital level, definitions, etc. And also, what did HERA amend? Because HERA struck the prior MANDATORY release Undercapitalized: when the Core Capital (Tier 1 Capital) > Minimum (Leverage) Capital requirement (2.5% of ATA in their ERCF).
Calabria/Mnuchin chose a steep CET1 > 3% of ATA, which was snubbed.
Under the Separate Account plan, FnF have CET1 > 2.5% of ATA. Which bodes well for the redemption of the JPS (AT1 Capital) at their fair value of par value, and then, FnF would comply with the ERCF of Tier 1 Capital > 2.5% of ATA. Also complying with the FHFA's desire of "membership cleansing" before the Privatized Housing Finance System revamp chosen for the release in 2011 by the UST, at the request of the Dodd-Frank law, as seen in its 2016 Final Rule with the FHLBanks, that ordered the expulsion of the unwanted members.

We can even spot that Calabria forgot with HERA to include in the FHEFSSA the typical "18-month implementation" (like in the very FHEFSSA in question when the first capital ratios in 1992), when it directed the FHFA director to change the capital requirements and add new capital metrics (CET1 and Tier 1) besides a Capital Buffer, that would have prevented the current "back-end Capital Rule" (effective February 16, 2021), that is, enacted after the Transition Period to build capital, given always by any Federal Agency when there are changes.

The mandatory release implies that FnF have to build regulatory capital in the first place.
Playing with the words is their modus operandi: "dividend obligation", in order to pass it off as interest payments on obligations (1989 FHLBanks' bailout) and skip the Restriction on Capital Distributions (Dividends; SPS LP increased for free; the Lamberth rebate), besides unavailable Earnings for distribution as dividend, out of an Accumulated Deficit Retained Earnings accounts all along.

[Wise Man]

The information about bond insurers and bond insurance coverage was a topic in their earnings reports in early conservatorship, but nowadays FnF don't talk about it, primarily because they no longer hold PLMBSs.
The important thing is that the purchase of PLMBS was illegal in the Credit Enhancement clause of the Charter Act (Lack of credit enhancement operation. For instance, today's commingled securites/resecuritizations/Catastrophic-Loss Reinsurance do comply with this clause, as the underlying securities are 100% insured by other guarantors. Credit Enhancement operation number (iii)).
Had the FHFA complied with the law, the conservatorships wouldn't have existed.

Nowadays, more illegal operations with the Credit Risk Transfers (CRTs), because it's not one of the enumerated Credit Enhancement operations authorized.
The fact that there are senators like the former senator Toomey or currently, senator Rounds this week, encouraging the FHFA director to do CRTs, doesn't make it a law, or an amendment of the Charter Act.
Both repeat the same slogan as Sandra Thompson: "To protect the taxpayer". The taxpayer doesn't bear credit risk in FnF. It just buys obligations SPS upon negative Net Worth ("capital deficiency"), which matches the "finance their operations as a last resort" written in the section Purposes of the Charter Act, in exchange for their Public Mission written below it (outdated nowadays if they no longer subsidize the g-fee; Duty to Serve protected by the Fair Housing Act, etc). That is, a UST backup and not govt implied guarantee on the MBS.
$19B in CRT expenses and recoveries, net, is due (turned into Retained Earnings account. This account is the sound and solvent condition to protect the SPS and the taxpayer: soundness and solvency)

Watching the UPB of those PLMBSs covered in 2010, and then, the unrealized losses, it doesn't look like the insurance claim against the bond insurers was large.

The main economic harm in FnF was caused by the mispricing of the PLMBSs by Wall Street, with the objective to prompt the conservatorships in FnF.
Later, the PLMBS skyrocketed in price.
The S.E.C. years later found no evidence of PLMBS price manipulation those years.
This is the line item AOCI (accumulated unrealized losses in AFS securities) in Equity that prompted the conservatorship. FnF didn't know the banks' trick of "Held-to-maturity portfolio".

Freddie Mac:

At March 31, 2010, we had coverage, including secondary policies on securities, totaling $11.5 billion of unpaid principal balance of our investments in securities. At March 31, 2010, the top five of our bond insurers, Ambac Assurance Corporation, or Ambac, Financial Guaranty Insurance Company, or FGIC, MBIA Insurance Corp., Assured Guaranty Municipal Corp., or AGMC, and National Public Finance Guarantee Corp., or NPFCG, each accounted for more than 10% of our overall bond insurance coverage and collectively represented approximately 99% of our total coverage.

We recognized other-than-temporary impairment losses during 2009 and the first quarter of 2010 related to investments in mortgage-related securities covered by bond insurance as a result of our uncertainty over whether or not certain insurers will meet our future claims in the event of a loss on the securities.

[1203Simon]

Are we only waiting for Lamberth to review the appeal?

[imbellish]

sorry, more noise than signal.

[Sammy boy]

I think he would have bought at least under .75 cents. Keep cheering !

[stockanalyze]

what news?

[naveedkhan]

Fnma c suit?

Why hasn’t a suit been filed for the Fannie commons. The Fmcc c and bot companies p shares won? Knowing how long it takes why would they wait?

[Donotunderstand]

When free - could be huge

[TightCoil]

Grab all you can before Hawkeye Buffett gets 'em

[jog49]

"I think Lamberth sides with the shareholders." Sure thing! LOL (at you)!!!

[real777mellon]

A great article I got that one bookmarked! Did you see this one? https://money.cnn.com/magazines/fortune/fortune_archive/2007/07/23/100134938/index.htm

[Guido2]

https://fortune.com/2008/11/25/lehman-brothers-presidential-connections/

[real777mellon]

The end of conservatorship? 2025 latest. Just a guess.

[tutt1126]

https://en.m.wikipedia.org/wiki/Slush_fund

[MoneyRobot]

At the end, I think shareholders will see value in their investment. But, the question is when is the end? 2028? During Trumps 2nd term if he wins? Who knows?....go figure

[MoneyRobot]

The debts that fnf hold are what I would consider good debts. The only "bad" instruments that fnf hold that harms the original shareholders are the warrants and sps. The worst contract is increase RE and increase SPS.

But those are not debt. Like it or not, uncle sam is a shareholder.

[MoneyRobot]

Going back to pre c ship will not happen. But there can be a new structure that is similar to recap and release. There are many options that can happen. We just have to wait and see.

[MoneyRobot]

I don't believe that. The gov did not hold one share of the Big 3 auto stock until after the bailout happened. I know. I held shares of GM and do follow who the institution and major shareholders are because I am a trader. I did lose money with GM and Bear Sterns almost wiped me out going into the financial crisis. They did a weekend bk where all shareholders can do is watch and cry.

[tutt1126]

Did government print out money to bailout?
No