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Wow!! This is big news for shareholders. The Supreme court asked what the Trump admin would have done if they could of removed Mel Watt and DJT spells it out perfectly...
$FNMA $FMCC $FNMAS $FMCKJ
— InvestIt (@FNMA_RRR) November 30, 2021
Trump For The Win! pic.twitter.com/2BGpQmWlCR
My $25 par FNMAS is now the same price as my $50 par FMCCG...$3.35
$FNMAS: Hellooooooooo.......... back to $2.50
We going back up babyyyyyyyyyyyyyyy
GO $FNMAS
Made money here and bounced back to common
Agree jks . . looking for entry . .
. . ; )
$FNMAS: Let me work on that for you
Cuz i have nothing better else to do today
GO $FNMAS
What's the bottom now ?
$FNMAS: $500
I don't know ???????????????
Im just making money off the bottom...... I call bottoms.
Not Tops.
Go ask someone who calls tops.
GO $FNMAS
$FNMAS: WOOoooohoooooooooooo.......... now $2.80
We making any money yet ???????????
WOWWWWWWWWWWW.......... love it
GO $FNMAS
How much room ?
Why is it going up ?
$FNMAS: Anddddddddd here we go..... now $2.17
Told you she was gonna recover........ lots of room to the upside still
GO $FNMAS
Fannie and Freddie: The NWS and the Implied Covenant of Good Faith and Fair Dealing
https://ruleoflawguy.substack.com/p/fannie-and-freddie-the-nws-and-the?token=eyJ1c2VyX2lkIjoyNzA2NzIyNCwicG9zdF9pZCI6NDAyMzYyOTgsIl8iOiI3a0d1eCIsImlhdCI6MTYyOTg1Mzc5OSwiZXhwIjoxNjI5ODU3Mzk5LCJpc3MiOiJwdWItMjc4NTcyIiwic3ViIjoicG9zdC1yZWFjdGlvbiJ9.GjTBGvraejD7uJ8Yfpj1U8RsGcm5BHRb8t4nZa_Sh4M
seems this thing is fresh outta losers
Fairholme Funds, Inc. v. US in U.S. Court of Appeals for the Federal Circuit
Starts at 22:18 mark
Good investment!
If any conversion is to take place they will want to maximize their investment. So I’m banking it’s close to par. Remember these are legal contracts . I switched to P’s after the SCOTUS because just that. They will want to make a deal on P’s and dilute commons
Updated court dates
New updated Event calendar, up next in the Federal court, Oral arguments in Fairholme tomorrow Aug 4, 2021 #fnma #fmcc $fnma $fmcc pic.twitter.com/uQwjKIlIbs
— Ano (@Ano3020100) August 3, 2021
Bought some at 2.. feeling good about that atleast.. considering im obliterated from commons..
Does anyone know if it is unusual for a company(FnF) to have so many preferred series. I think I counted 15 different series of preferred for fannie alone
$FNMAS: Now 1.87........ DON'T MISS OUT !!!!!!!
Holding 25k sharess here.
Let her rip to $3.50 minimum !!!!!!!!!!
GO $FNMAS
Ps are the most suppressed, any gain in court will be good for both better for some.
That's my feeling also. Even if the clams stick which they should. Tim howard said the Gov won't want to take it to SCOTUS as it will air out more dirty Gov laundry and files. Here's whats going to happen in the next 15 months or so
1, Claims are a win for P's Gov pay back damages.
2, Gov negotiates with plaintiffs on a deal
3, Gov releases, canceals it's 79% to build equity and div's return
Either way at these prices it's a long term play if you want a steady income from cheap P's right now, 2 to 3 years away or a short term play to make $5 to $7 on a share by Oct 2021.
Uh 5th has already judged unconstitutional, is the govt stupid???? Yes, and thieves.
I kinda like this, I smell big claims suits coming.
Supplemental briefs for plaintiffs and defendants in Federal Circuit of Appeals for 5th Amendment case.
http://www.glenbradford.com/2021/07/fnma-fanniegate-1058/
Is fmckj better than Fnmas? I don’t know the differences since only recently following.
I switched last week and this week from commons to FMCKJ. when was the last time they were at this price!. Even if they go back to $7 in the next year still way better than commons will. Its a no brainer
Preferred is beaten down much more than commons this year. I think P shares are unloved for a while. I will buy some when there is blood in the streets.
Hence why I was buying P's all last week. I will continue as long as I can. At under $2 its a gift... I'm holding FMCKJ and FMCCI Freddie shares.
Status of lawsuits
Fannie Mae and Freddie Mac Shareholder Litigation Agenda 2021#fanniemae #freddiemac $fnma $fmcc pic.twitter.com/EDlyTbVtTh
— Ano (@Ano3020100) July 6, 2021
Latest from ROLG...
Fannie and Freddie: A Modest Proposal to "Reform the GSEs"
The GSEs have a legal problem (the SCOTUS Collins decision) and a capital problem (GSEs cant raise equity capital as is after Collins). Herewith, a simple structural solution.
Rule of Law Guy
Jul 8
Comment
Share
The Problems
The GSEs have a legal problem and a capital problem that are irreconcilable with each other while in conservatorship. These problems need to be resolved in order for the GSEs to raise sufficient private capital to exit conservatorship.
Put briefly, the GSEs’ legal problem is that SCOTUS in the Collins case has interpreted the governing statute for the GSEs’ conservatorship (HERA) as permitting the FHFA as conservator to do essentially what ever it wants during conservatorship.
This legal conclusion is a total non-starter for Wall Street…which creates the capital problem for the GSEs.
The GSEs’ capital problem is that the GSEs require substantial private capital to exit conservatorship, and Wall Street will not provide this capital to the GSEs while the GSEs are in a conservatorship governed without any discernible limits on a FHFA director’s authority under HERA.
I have set forth below what I consider to be the best solution that permits the GSEs to raise substantial private capital, exit conservatorship and (together with the LIH Cos discussed below) accomplish the twin goals of providing a deep secondary mortgage market for conventional loans, and a superior funding mechanism to support low-income housing mortgage finance. This proposed solution utilizes conventional tools of corporate finance and structuring to reform the GSEs without any resort to drastic measures such as “winding down” the GSEs, and can be implemented by FHFA without any new legislation.
To do this, the GSEs will need to separate their two “lines of business”. Currently, the GSEs “cross-subsidize” the higher risk/lower profit low-income housing mortgage finance line of business with the lower risk/higher profit conventional secondary mortgage finance line of business within each GSE, acting as a single entity.
If the GSEs are to raise money as currently structured, they raise money for both lines of business. If the federal government seeks to provide a federal backstop for the low-income housing mortgage finance business, it must also do so for the much larger conventional secondary mortgage business, since risks presented by both lines of business are borne by the same entity that would require the backstop.
While the two lines of business are being conducted within the same GSE entity, both lines of business benefit from the “implicit” guaranty that the federal government will bail out the GSEs. As a matter of federal housing policy, a well capitalized conventional secondary mortgage finance business should enjoy neither an explicit nor implicit federal guaranty, whereas the low-income housing mortgage finance business should enjoy either a paid for explicit federal MBS backstop guaranty (which would require new federal legislation) or an implicit federal guaranty focused solely on the low-income housing market business.
This is a highly inefficient way to structure the two multi-trillion GSEs.
However, it would be foolhardy to separate the two lines of business without allowing both lines of business to continue to use the substantial human capital, infrastructure and business processes that are uniquely present in the GSEs, and that would be required to run these two lines of business after separation. Of course, it would be insanity to “wind down” the GSEs when a far simpler and effective solution is readily available that would use the GSEs as part of the solution, and focus solely on their misguided mixed public/private corporate and operating structure as the problem to be fixed.
The Solution
As a matter of corporate finance, private investors would prefer to be shareholders of an entity that conducted only the conventional secondary mortgage finance business. GSEs that focused exclusively on the conventional secondary mortgage finance business would continue to be able to support a deep market for 30 year prepayable mortgages. As a matter of housing policy, the federal government should provide direct financial support only to the low-income housing mortgage finance business that is currently being done by the GSEs. As the GSEs are currently structured, this cannot be done.
The GSEs should be reformed to permit this to be done, and all this would take is to perform the corporate restructuring suggested below, which can be implemented by the FHFA director during conservatorship. Once this is done, the federal government can focus its policies, governance and financial support on the low-income housing mortgage finance business, and leave the GSEs to conduct the conventional secondary mortgage finance business subject to the discipline of the private mortgage and capital markets (with continued prudential regulation by FHFA after conservatorship exit).
Each GSE would drop its low-income housing mortgage finance business into a subsidiary (LIH Co) and spin all of the ownership interest in LIH Co to Treasury in redemption of Treasury’s Senior Preferred Stock interest.
Each GSE would grant to its LIH Sub a perpetual, cost free license to use all of the existing business infrastructure existing at the GSE in order for LIH Sub to conduct the low-income housing mortgage finance business. In essence, the GSEs would continue to provide operational but not financial support to the LIH Subs to conduct the low-income housing mortgage finance businesses.
Treasury would capitalize each LIH Co with the proceeds from the sale of its 79.9% common stock ownership interest in each GSE.
Upon completion of Treasury’s common stock sales in 3. above, Treasury will own 100% of the equity ownership interest in each LIH Co conducting the low-income housing mortgage finance business formerly conducted by the GSEs. Each LIH Co would guaranty low-income housing MBS and charge its own separate guaranty fee (as well as provide whatever additional forms of support it deems advisable). Each LIH Co would be very well capitalized to conduct this business from the proceeds of the sale of Treasury’s GSE common stock, which would enable LIH Co guaranteed MBS to be sold to institutional investors. If the federal government wants to further support the low-income housing mortgage finance business, it can provide a federal government backstop guaranty focused solely on LIH Co guaranteed MBS.
Each GSE would conduct primary issuances of common stock coincident with Treasury’s secondary sales, in order to adequately recapitalize the GSEs in order for the GSEs to exit conservatorship and continue to conduct their conventional secondary mortgage finance businesses.
Each GSE would convert its federal charter to a state charter in order to become a conventional for-profit corporation and no longer be exempt from paying state taxes where applicable, and FHFA would relieve each GSE from any low-income housing mortgage finance business mandate. Treasury would eliminate its line of credit supporting the GSEs under the PSPAs.
In order for Treasury to obtain the highest possible sale proceeds from the sale of GSE common stock so as to capitalize the LIH Cos to the greatest extent possible, and for the GSEs to adequately capitalize their continuing conventional secondary mortgage finance businesses, FHFA should enter into consent decrees (essentially contracts) with the GSEs, and promulgate a revised capital standard while in conservatorship.
The consent decrees would formalize the important GSE reforms made to death, such as eliminating the funding of toxic mortgages that arose prior to the Great Financial Crisis.
FHFA’s revised capital standard would be a truly risk-based standard for non-banking mortgage finance guaranty companies without excessive conservatism, and would reflect the de-risking that will have been accomplished by transferring the low-income housing mortgage finance businesses out of the GSEs.
Perhaps most importantly, this restructuring should serve to depoliticize the GSEs, which should improve their capacity to raise capital. The GSEs would become conventional for profit finance companies that would be subject to continued prudential oversight by FHFA due to their size, but would no longer benefit from any implicit federal backstops (other than to the extent that all large banking and other financial institutions do so currently).
A good thread on APA claims, breach of contract, and COFC with Meritorpsps...very similar to what happened with the GSE’s. They also lost APA claim in court but won breach of contract and takings claims.
Before #Fanniegate, there was FDIC handling of thrifts that is very similar. Just came across the shareholders website that documents their legal battle against the FDIC. It's very similar to GSE's seizure.https://t.co/kEMm7DfUbg$FNMA $FMCC
— West Long Island (@WestLongIsland) July 6, 2021
$1.95 seems to be holding. Good time to jump in so brought today. A long road ahead but atleast this year should here something about the (taking) and what will go to trail next year. Buckle up buttercup!
This looks like something you want to buy at these levels and stow it away in your IRA for 'someday'. I just did.
Tim Pagliara video
//www.youtube.com/watch?v=0ceOW23Eqc4
http://www.glenbradford.com/2021/07/fnma-fanniegate-1052/
July 2, 2021
Lyle W. Cayce
Clerk of the Court
U.S. Court of Appeals for the Fifth Circuit
F. Edward Hebert Building
600 S. Maestri Place
New Orleans, LA 70130-3408
Re: Collins et al. v. Mnuchin et al., No. 17-20364
Supplemental Letter Brief Regarding Remand Procedures
Dear Mr. Cayce:
On June 24, 2021, this Court directed the parties to file supplemental letter
briefs addressing how this case should proceed on remand following the Supreme
Court’s decision in Collins v. Yellen, 141 S. Ct. 1761, 2021 WL 2557067 (S. Ct.
June 23, 2021).
The parties have conferred and agree that the issues that remain on remand
should be addressed by the Court following the filing of supplemental briefs. The
parties therefore request that this Court issue an order directing the parties to file
supplemental opening and response briefs, not to exceed 20 pages, and a reply
brief, not to exceed 10 pages, according to the following schedule:
Plaintiffs-Appellants’ Supplemental Opening Brief Due August 6, 2021
Defendants-Appellants’ Supplemental Response Briefs Due September 10, 2021
Plaintiffs-Appellants’ Supplemental Reply Brief Due September 24, 2021
No I did not change my alias. I was the sole owner of this board, but got a good offer price and decided to sell that's all. Don't have many aliases or didn't change my nickname either. Thought of letting all know...
Re: Fannie/Freddie-Post-SCOTUS Ruminations From A Star Wars POV. Been thinking a lot about SCOTUS ramifications and spent a fair amount of time today with various legal experts. Some high-level thoughts below. (THREAD)
— Michael Kao (@UrbanKaoboy) June 30, 2021
https://howardonmortgagefinance.com/2021/06/28/an-unexpected-ruling/
An Unexpected Ruling - by jtimothyhoward
June 28, 2021 at 8:54 am
This past Wednesday the Supreme Court made its ruling in Collins v. Yellen, and it went heavily against the plaintiffs. On the most important issue—the legality of the net worth sweep under the Administrative Procedures Act, or APA—plaintiffs lost outright. In an opinion authored by Justice Alito, the Court ruled that, “The ‘anti-injunction clause’ of the Recovery Act provides that…’no court may take action to restrain or affect the exercise of powers or functions of the Agency as conservator or a receiver,” and that, “Where, as here, the FHFA’s challenged actions did not exceed its ‘powers or functions’ ‘as a conservator,’ relief is prohibited.”
The ruling on the constitutional issues was more complex, but for plaintiffs not much better. Here, the Court made four major rulings: (1) “The Recovery Act’s restriction on the President’s power to remove the FHFA Director…is unconstitutional,” and the President may remove him or her at will (indeed, President Biden already has replaced Director Calabria with one of his three Deputy Directors, Sandra Thompson); (2) “Shareholders no longer have any ground for prospective relief” because the January letter agreement between Treasury and FHFA “eliminated the variable dividend formula that caused the shareholders’ injury” (I believe this is an erroneous ruling, since the letter agreement did not eliminate Treasury’s liquidation preference, and only temporarily suspended the sweep); (3) the Acting Director who agreed to the net worth sweep, Ed DeMarco, was removable by the President (although the statute is silent on this), which limits the retroactive relief plaintiffs may seek, and (4) the “harm caused by a confirmed Director’s implementation of the third amendment could then provide a basis for relief.” This last issue was remanded to the lower court, and my view on it is similar to that of Justice Kagan, who in her concurring opinion said: “It’s hard not to wonder whether…[the Court] intends for this speculative enterprise [the remand] to go nowhere,” while noting that the Court “may calculate that the lower courts on remand in this suit will simply refuse retroactive relief.”
I was not optimistic about the chances of success on the constitutional claims in Collins—although I was pleased that the Court paved the way for Director Calabria’s removal—but I had been highly confident that plaintiffs would prevail on the APA claim. I did not, though, count on all of the justices agreeing on a strained reading of the statute, nor on their giving no weight to the background facts on the case presented by plaintiffs (and me, in my amicus curiae brief). Yet that is what occurred.
Whether the anti-injunction provision in the Housing and Economic Recovery Act (HERA) bars relief on the APA claim depends on whether the net worth sweep exceeded FHFA’s statutory conservatorship powers. In the Perry Capital case, Judge Lamberth ruled that the sweep did not, because, he claimed, the statute said that the conservator “may,” rather than “shall,” take certain actions, and also because section 4716 (b) (2) (J) in HERA, titled “Incidental Powers,” said FHFA could “take any action authorized by this section, which the Agency determines is in the best interests of the regulated entity or the Agency.” The Fifth Circuit Court of Appeals hearing the Collins case en banc convincingly overturned both of these holdings in its decision. The government dropped the “may versus shall” argument in its brief to the Supreme Court, but kept the argument that the incidental powers provision in HERA turned FHFA into a conservator with essentially unlimited powers of discretion. Justice Alito seized upon this to justify his ruling on the APA claim: “Instead of mandating that the FHFA always act in the best interests of the regllated entity, the Recovery Act authorizes the Agency to act in what it determines is ‘in the best interests of the regulated entity or the Agency (emphasis added).’ Thus, when the FHFA acts as a conservator, 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 distinctive feature of an FHFA conservatorship is fatal to the shareholders’ statutory claim.”
Except that’s not what HERA says. Section 4716 (b) (2) is called “General Powers,” and it has 11 subsections, labeled (A) through (K). Section 4716 (b) (2) (D) is titled “Powers of Conservator,” and it reads in full: “the Agency may, as conservator, take such action as may be—‘(i) necessary to put the regulated entity in a sound and solvent condition; and ‘(ii) appropriate to carry on the business of the regulated entity and preserve and conserve the assets and property of the regulated entity.” After five more subsections comes subsection 4716 (b) (2) (J), “Incidental Powers,” and this is where the clause appears saying that FHFA may “take any action authorized by this section, which the Agency determines is in the best interests of the regulated entity or the Agency.”
Incidental means “accompanying but not a major part of something.” A plain reading of the statute, therefore, is that the permission granted FHFA to act in its own interest is limited to the exercise of its incidental powers, and does not extend to the conservatorship as a whole. Otherwise, what is the purpose of having specified those powers in section 4716 (b) (2) (D)? In a 2001 decision, Whitman v. American Trucking, Justice Scalia famously wrote, “Congress, we have held, does not alter the fundamental details of a regulatory scheme in vague terms or ancillary provisions—it does not, one might say, hide elephants in mouseholes.” Justice Alito looked into the mousehole of the “Incidental Powers” section of HERA and said he saw an elephant in there, and the other justices said they saw one too.
Equally unexpected was the Court’s accepting the government’s fictitious and disproven rationale for having entered into the net worth sweep. Justice Alito’s recounting of the context of the sweep could have been taken from any one of dozens of the government’s filings in the APA cases over the years: “Recall that the third amendment was adopted at a time when the companies’ liabilities had consistently exceeded their assets over at least the prior three years…. If things had proceeded as they had in the past, there was a realistic possibility that the companies would have consumed some or all of the remaining capital commitment in order to pay their dividend obligations, which were themselves increasing in size every time the companies made a draw. The third amendment eliminated this risk by replacing the fixed-rate dividend formula with a variable one.”
In its brief for the Court, counsel for the plaintiffs, Cooper & Kirk, told a very different story about how the sweep came about, and what its true purpose was. Cooper & Kirk discussed the temporary or estimated book expenses FHFA directed the companies to make, and how they had begun to reverse in the months before the net worth sweep was imposed. They noted in particular Treasury’s being aware of the imminent release of both companies’ deferred tax asset reserves, a Fannie executive’s expectation of a “golden age of earnings” ahead, and Treasury’s statement that “every dollar of earnings that Fannie Mae and Freddie Mac generate will be used to benefit taxpayers.” And at Cooper & Kirk’s request I filed an amicus brief with the Court, laying out the facts in considerably more detail, with cites and footnotes. The Court neither acknowledged nor refuted any of these factual submissions; it simply ignored them.
Cooper & Kirk had been concerned something like this might happen. In their brief they wrote: “Plaintiffs’ statutory claim comes to the Court on a motion to dismiss, and at this stage of the litigation the Complaint’s factual allegations must be accepted as true. Despite grudgingly acknowledging this most basic rule of civil procedure…Defendants contradict the complaint on nearly every page of their brief that discusses application of Section 4617(f) to the facts of this case….Defendants know that these statements contradict the Complaint, yet they persist in making them because the “risk” of unaffordable 10% cash dividends that the Companies supposedly faced in mid-2012 is the starting point and necessary factual premise for Defendants’ entire argument that the Net Worth Sweep preserved and conserved the Companies’ assets.” Cooper & Kirk concluded their argument on this point by saying, “The Court cannot credit this claim given the Complaint’s contrary factual allegations,” yet the Court went ahead and did precisely that.
So, what is one to make of a unanimous ruling on the APA claim in Collins by the highest court in the land that relies on a reading of section 4716 (b) (2) (J) of HERA so strained as to not be credible (virtually identical language exists in the Incidental Powers section of the FDIC Act, and it has never been read to apply to FDIC conservatorships as a whole), and a refusal to credit, or even consider, the facts of the case as alleged by the plaintiffs? We cannot know for certain, but there is a suggestive clue in the partial concurring opinion of Justice Gorsuch, in which he questions what he calls the “novel and feeble” direction to the lower courts in the remand on the constitutional issue to “inquire whether the President would have removed or overruled the unconstitutionally insulated official had he known he had the authority to do so.” In the midst of his discussion of this topic we find this sentence: “It is equally possible that—had Congress known it could not have a Director independent from presidential supervision—it would have deployed different tools to rein in Fannie Mae and Freddie Mac.“
Where did this notion that the purpose of HERA was to “rein in” Fannie and Freddie come from? That is not what was happening at the time. In the summer of 2008, when HERA was passed, the private-label securities market had collapsed, banks had pulled way back on mortgage lending because of soaring delinquencies, and Congress five months earlier had raised Fannie and Freddie’s loan limits from $417,000 to $759,750, making them “the only game in town,” as Treasury Secretary Henry Paulson described them to the Financial Crisis Inquiry Commission. No one was talking about “reining in” Fannie and Freddie as the crisis was unfolding. To the contrary, that’s why Paulson nationalized them. He knew they were the only game in town, and wanted them under governmental control in that situation. This also is when what I call the Financial Establishment created and began to disseminate its fictitious version of the financial crisis—that its cause was not the foolish experiment with unregulated private-label securitization, but Fannie and Freddie.
I believe this version of Fannie and Freddie as problems is the only one the Supreme Court justices have ever heard, and some may have been hearing it for thirteen years. All six of the conservative justices (Roberts, Thomas, Alito, Gorsuch, Kavanaugh and Barrett) are members of the Federalist Society, for which “reining in” or eliminating Fannie and Freddie has been a crusade for more than two decades. And it’s likely that even the liberal justices have not heard a kind word (or a real fact) about the companies throughout their careers.
This interpretation of the justices’ pre-oral argument mindset with respect to Fannie and Freddie not only would explain the bizarre unanimous verdict on the APA claim, but also could explain why the Court took the highly unusual step of granting certiorari on an interlocutory appeal of the decision on the APA claim by the Fifth Circuit en banc in the first place. The en banc panel had ruled that the lower court’s dismissal of this claim had been wrong on the law, and sent it back for a trial on the facts. There, plaintiffs almost certainly would have prevailed—likely in a motion for summary judgment—because of the vast amount of evidence produced in discovery for the Court of Federal Claims proving that Treasury knew that its public rationale for the net worth sweep was false, had admitted this to itself, and then lied about it to the public (and the courts). An appeal to the Supreme Court of a decision favoring plaintiffs on the facts would have left scant room for reversal. It is not hard to envision some of the more virulent opponents of Fannie and Freddie in the Federalist Society going to one or more of their conservative justice colleagues and saying something to the effect of, “You shouldn’t wait for this case to come back to you after a ruling on the facts; if you grant cert now at the interlocutory stage, you still can rule against these terrible companies on the law, and avoid having to deal with the facts at all.”
However it may have come about, there can be little question that the Court’s ruling on the APA claim in Collins was imposed upon the case rather than deduced from it. And this has implications for both of the major net worth sweep-related cases remaining in the lower courts—the breach of contract claims before Judge Lamberth in the DC Circuit, and the regulatory takings claim in the Court of Federal Claims previously before Judge Sweeney and now before Judge Schwartz. While the case for each has been strengthened by the loss on the APA issue in Collins (if the government has the right to take shareholders’ property, shareholders have the right to compensation for that action), the path to a final judgment favoring plaintiffs still runs through the Supreme Court. The Court’s ruling in Collins ought to reinforce to counsel in these cases the wisdom of anticipating heavy hands on the scales of justice as they prepare and present their legal and factual arguments.
In the meantime, the spotlight will shift to the Biden administration. It has inherited a mess. Fannie and Freddie are closing in on thirteen years in conservatorship. No one doubts they have been “conserved:” they are extremely profitable, and arguably now have the highest-quality books of credit guarantees in their histories. Yet (ex-FHFA Director) Mark Calabria has given them a ludicrously high target for the amount of capital they must attain before they can exit conservatorship, which would take them nearly a decade to reach through retained earnings alone, and they do not have access to the capital markets because even though the net worth sweep has been suspended, Treasury’s liquidation preference in the companies remains, and continues to grow with their retained earnings. Fannie and Freddie are thus stuck in limbo, with no evident way out on their own.
I believe the Biden administration understands that this is its problem to fix. If it does not attempt to, its economic team will look weak and ineffective. But beyond that, Fannie and Freddie have the potential to play enormous roles in helping to meet the administration’s priorities for housing in general, and affordable housing in particular. There is no chance of any housing-related legislation getting through this Congress, so the Biden team will need to rely on the tools it has. Two of its most important ones, Fannie and Freddie, have been hamstrung (deliberately, I believe, and for ideological reasons) by the now-departed FHFA director. With support from the administration’s top policy figures, a new FHFA director could take the lead on getting Fannie and Freddie properly capitalized and regulated, canceling the net worth sweep and settling the remaining lawsuits, and creating a path for the companies to quickly and safely exit conservatorship, thus putting them back in their traditional roles of buoying the economy by making mortgage credit more available and affordable to a wide range of low- moderate- and middle-income homebuyers. While this may not happen for a while, I am confident that it will at some point. And if it does, then last week’s unexpected Supreme Court ruling will have been only a temporary setback for the homebuyers who benefit from Fannie and Freddie financing, and the investors who must provide the new capital that will make this financing possible.
jtimothyhoward | June 28, 2021 at 8:54 am | Categories: Uncategorized | URL: https://wp.me/p756yh-bc
and then there was this
Preferreds oversold. Still some hope for par out there with breach of contract and Takings lawsuits
FNMAS will be there next week
FMCKJ ended the day up 1 cent. Good to see green even if it is a penny
I thought the breach of contract lawsuit got pushed out 45 days...It is still showing May 16,2022 on the Lamberth's court schedule
that reminds me
you never changed your birds nest
seems as tho way more poop on pref
please adjust accordingly
typo?
sub $7
or sub $2?
$FNMAS: Hit $3.60 After Hours
Hope this holds............ would love to cash out now.
GO $FNMAS
$FNMAS: $2.80.......... Thats $10k baby
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=164550655
Ummmmmmm........ whats my name ?
GO $FNMAS
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