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Sir, If Judge Lamberth awards prejudgment interest to be paid promptly, would this be in violation of Federal statutes? and if so, would not the commitment fee, 10% dividend and the net worth sweep all be in violation of Federal statutes?
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clarencebeaks21, I read you are a lawyer, I appreciate your input.
Best Regards,
Question, is he right or wrong?
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Bryndon, gave us the calculation of the pay down of the liquidation preference . Now if he will apply the LAW written in HERA.
https://drive.google.com/file/d/15978NWfDcTtuClMBnwgWFmoPnwK94vWn/view
The liquidation preference has be paid and the Senior Preferred Stock should be canceled.
The FHFA Director can at any time, REPURCHASE, REDEEM, RETIRE... First the Senior Preferred Stock and second the Junior Preferred Stock.
HOUSING AND ECONOMIC RECOVERY ACT OF 2008
Quote: “Page 2732
EXCEPTION.—Notwithstanding paragraph (1), the Director may permit a regulated entity, to the extent appropriate or applicable, to repurchase, redeem, retire, or otherwise acquire shares or ownership interests if the repurchase, redemption, retirement, or other acquisition— ‘‘(A) is made in connection with the issuance of additional shares or obligations of the regulated entity in at least an equivalent amount; and ‘‘(B) will reduce the financial obligations of the regulated entity or otherwise improve the financial condition of the entity.’’.
NOTE: REPURCHASE, REDEEM, RETIRE...
WILL REDUCE THE FINANCIAL OBLIGATIONS OF THE REGULATED ENTITY.
Link: https://www.congress.gov/110/plaws/publ289/PLAW-110publ289.pdf
In essence allows the trustees of Fannie and Freddie to go to the market at any time to raise new capital, including new capital with lower dividend coupons, to buy back the Treasury’s senior preferred. Any loyal conservator of Fannie and Freddie would take advantage of this refinancing option to end the bailout arrangement, by paying off the senior preferred in full.
clarencebeaks21, said
Quote: “ Treasury was able to “take distributions” only because the law authorized the Director to first make them.” End of Quote.
The distribution violated the Law!
The FHFA / Treasury did not apply the excess payments beyond the 10% dividend. The terms written in this Federal Regulation allows the FHFA Director to pay down the Liquidation Preference and deem the Senior Preferred Stock cancelled.
Not limited to the payment the jury awarded, most important, included is the commitment fee with the NWS...
THE LAW OF THE LAND
Code of Federal Regulation
1237.12 Capital distributions while in conservatorship.
(a) Except as provided in paragraph (b) of this section, a regulated entity shall make no capital distribution while in conservatorship.
(b) The Director may authorize, or may delegate the authority to authorize, a capital distribution that would otherwise be prohibited by paragraph (a) of this section if he or she determines that such capital distribution:
No 1: Will enhance the ability of the regulated entity to meet the risk-based capital level and the minimum capital level for the regulated entity;
No 2: Will contribute to the long-term financial safety and soundness of the regulated entity;
No 3: Is otherwise in the interest of the regulated entity; or
No 4: Is otherwise in the public interest.
Section c, this section is intended to supplement and shall not replace or affect any other restriction on capital distributions imposed by statute or regulation.
DID THE NET WORTH SWEEP
Enchance the ability to meet risk-based capital level? NO
Contribute to the long-term financial safety and soundness of the regulated entity? NO
In the interest of the regulated entity? NO
Is otherwise in the public interest? NO
(The taxpayers are responsible for the liabilities of the enterprises).
The Net Worth Sweep could not possibly have any rehabilitative effect and that one of the principal duties of the FHFA Director is to preserve and conserve assets.
Fannie is allowed to retain its earnings until it fully meets its applicable risk-based capital requirement (it’s currently short by $247.8 billion), but those increased retained earnings are matched by a dollar-for-dollar increase in Treasury’s liquidation preference.
https://gov.ecfr.gov/current/title-12/chapter-XII/subchapter-B/part-1237/subpart-D/section-1237.12
Thank you Vancmike.
Can you provide to this board,
"The attached charts, illustrating the staggering financial transfers from FNMA and FMCC to the Treasury under the Net Worth Sweep,"
Regards
jeddiemack, what you said reminded me what I read several years ago.
Adam Spittler CPA, MS
Mike Ciklin JD, MBA, MRE
Quote: “In summary, the entire Conservatorship, the notion of GSE instability, and a failed model appears to have been fabricated by the U.S. Treasury. HERA was passed by a congress during a moment of weakness and panic without any or all the congressmen and congresswomen understanding the details (fine fine print) and how these could be manipulated, As we have seen Fannie Mae was able to pay back the entire amount of funding from the U.S. Treasury because it never burned or needed the cash in the first place... as proven, strangely enough, via the Company's own disclosures.” End of Quote.
Good question,
At the start of the conservatorship, there were many (not all) JPS Holders calling for receivership, throwing the Common Shareholders under the bus! Well, it backfired, the Net Worth Sweep took place, (wipeout both common and preferred) The ‘Mistake’ instead of filling lawsuit against the entire conservatorship from the beginning the lawsuits challenged the 3rd amendment NWS only. If we return to the Collins case which came in front of the SCOTUS it was asked by one of the Justices, why didn’t the Plaintiffs challenge the conservatorship as a whole instead of the Net Worth Sweep only. It’s called greed my friend.
Only one suit, Washington Federal challenged the Conservatorship and it was dismissed. Why? I do not know. Maybe someone on this board can explain.
Quote: "When Paulson met with the directors of Fannie Mae and Freddie Mac to inform them of his intent to take over their companies, neither entity met any of the twelve conditions for conservatorship spelled out in the newly passed HERA legislation. Paulson since has admitted he took the companies over by threat. This fact has been stated in the Washington Federal Lawsuit filed against the government." End of Quote
Page 30-31 Twelve Conditions
Link: https://docs.google.com/file/d/0BxUYhg0cYUOTbkZYVVJkaGtoS1E/edit?resourcekey=0-gU6I5hW3ndG5E3uY2VEyGA
stoxjock, The problem
Barron said it best,
Quote: “Notice I do not touch the conservatorship. That is a failed legal strategy of 15 years now and counting. A legal rabbit hole.” End of Quote
This has been the mistake of the JPS Lawyers from the beginning. And making the same mistake over and over.
UNITED STATES COURT OF FEDERAL CLAIMS
Wazee Street Opportunities Fund IV LP,
Filed 04/03/23
Quote: "This lawsuit does not challenge the foregoing arrangement made in
September 2008. While Plaintiffs do not concede that all the measures taken in September
2008 were justified or necessary, they are not here to challenge the placement of Fannie and
Freddie into conservatorship at the height of the financial crisis, or the original deal struck by
Treasury and FHFA at that time." End of Quote. Page 7
The lawyers are focused on the third amendment net worth sweep. By Public Law the whole contract is illegal, the contract is illegal based on the United States is not permitted to charge a commitment fee to be paid by the enterprises?
Link: https://storage.courtlistener.com/recap/gov.uscourts.uscfc.37252/gov.uscourts.uscfc.37252.30.0.pdf
This is crazy. Director Lockhart Regulator, and Director Lockhart Conservator. Holding both positions as Regulator and Conservator; Conservator Lockhart is required by law to file notice to himself as Regulator. Have you ever heard of such? Ha
HappyAlways, I agree shareholders should be compensated 10% same as we were charged.
I do not know how to calculate an amortization schedule.
I want to thank Barron with each and every shareholder on this board for the information contribution that has exposed the TRUTH, what we have learned.
The Senior Preferred Stock Purchase Agreement is an illegal contract.
Explained:
Treasury and FHFA violating Federal statutes. The Federal statutes are the Charter Act, the Safety and Soundness Act of 1992, as amended by HERA, Administrative Procedures Act, and potentially the Chief Financial Officers Act.
The FHFA had no right to take over the companies under the Law of HERA.
When Paulson met with the directors of Fannie Mae and Freddie Mac to inform them of his intent to take over their companies, neither entity met any of the twelve conditions for conservatorship spelled out in the newly passed HERA legislation. Paulson since has admitted he took the companies over by threat.
HOUSING AND ECONOMIC RECOVERY ACT OF 2008
Page 2734 Twelve Conditions
APPOINTMENT OF THE AGENCY AS CONSERVATOR OR RECEIVER
Link: https://www.congress.gov/110/plaws/publ289/PLAW-110publ289.pdf
The Senior Preferred Stock, with a variable liquidation preference outlined in the SPSPA and its amendments and share certificates is a new product for the purposes of the Safety and Soundness Act of 1992 as amended by HERA.
Congress directed the Director of FHFA to apply the Administrative Procedures Act to the new products sold to Treasury. The FHFA did not follow the administrative procedures congress required in the plain language of the safety and soundness act.
The Director of FHFA as regulator violated the safety and soundness act and the administrative procedures act by not following the statutory duty to approve new products issued by the GSEs to Treasury for the purpose of stabilizing the secondary mortgage market.
The law required the publication in the federal register of the SPS with their variable rate liquidation preference tied to the commitment. It requires a public comment period, and a rule making process to make the SPS legal. It is the same law that required the capital rule. And the same law that required FHFA a year ago issue the new products law for MBS products. They have ignored this requirement for 15 years.
Director Lockhart Regulator, and Director Lockhart Conservator. Holding both positions as Regulator and Conservator; Conservator Lockhart is required by law to file notice to himself as Regulator.
The Safety and Soundness Act required Director Lockhart as regulator not conservator to approve a new product issued by Director Lockhart acting as conservator FHFA-C (SPS with variable liquidation Preference) to Treasury under the terms of the SPSPA for the purpose of carrying out the secondary mortgage market. He was required as regulator to file notice in the federal register, seek public comment and issue federal regulations for the new product we call the Senior Preferred shares sold to Treasury.
HOUSING AND ECONOMIC RECOVERY ACT OF 2008
Page 2689
SEC. 1321. PRIOR APPROVAL AUTHORITY FOR PRODUCTS.
Link: https://www.congress.gov/110/plaws/publ289/PLAW-110publ289.pdf
The CFO act requires the Treasury department based on published accounting standards to determine if their actions of funding through appropriations, ownership of 100% of the GSEs net worth and non-regulatory control of the GSEs through the SPSPA require the consolidation of the GSEs liabilities onto the nations balance sheet. Do the actions of Treasury under the SPSPA require such consolidation under the plain language of the Chief Financial Officers Act?
The Congressional Budget Office publication states, “Federal Government effective ownership of Fannie Mae and Freddie Mac.”
The Enterprises have been Nationalized by the Government according to the CBO: The liabilities have not been added to the National Debt nor have the Shareholders been compensated by U.S. Law of the 5th Amendment.
Congressional Budget Office
From: Estimates of the Cost of Federal Credit Programs in 2023
Page 1, Foot Note 1.
Quote: “Fannie Mae and Freddie Mac have been in federal conservatorship since September 2008. CBO treats the two GSEs as government entities in its budget estimates because, under the terms of the conservatorships, the federal government retains operational control and effective ownership of Fannie Mae and Freddie Mac. For more discussion, see Congressional Budget Office, Effects of Recapitalizing Fannie Mae and Freddie Mac Through Administrative Actions (August 2020), www.cbo.gov/publication/56496; and Congressional Budget Office, The Effects of Increasing Fannie Mae’s and Freddie Mac’s Capital (October 2016), www.cbo.gov/ publication/52089” End of Quote
Link: https://www.cbo.gov/system/files/2022-06/58031-Federal-Credit-Programs.pdf
The United States Treasury in violation of the Charter Act has failed to treat as public debt the transactions of the United States when the FHFA placed Fannie Mae and Freddie Mac into conservatorship. This obligation was never recorded as public debt as required by law.
The Charter Act the Law of the Land.
Charter Act SEC. 304. SECONDARY MARKET OPERATIONS
(c) Terms and Rates
Quote: “All redemptions, purchases, and sales by the Secretary of the Treasury of such obligations under this subsection SHALL BE TREATED AS PUBLIC DEBT TRANSACTIONS of the United States.” End of Quote Page 14
Link: https://www.fanniemae.com/sites/g/files/koqyhd191/files/migrated-files/resources/file/aboutus/pdf/fm-amended-charter.pdf
Neither the Charter Act nor did HERA authorize the Treasury to charge a commitment fee on a line of credit to be paid by the Enterprise. The United States prohibition on assessment or collection of fee or charge to Fannie Mae, (section 304 Fee Limitation). Only Federal Reserve Banks are authorized to be reimbursed of fees, (section 309).
SEC. 304. SECONDARY MARKET OPERATION
Fee Limitation
Quote: “(f) PROHIBITION ON ASSESSMENT OR COLLECTION OF FEE OR CHARGE BY UNITED STATES.—Except for fees paid pursuant to section 309(g) of this Act and assessments pursuant to section 1316 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, no fee or charge may be assessed or collected by the United States (including any executive department, agency, or independent establishment of the United States) on or with regard to the purchase, acquisition, sale, pledge, issuance, guarantee, or redemption of any mortgage, asset, obligation, trust certificate of beneficial interest, or other security by the corporation. No provision of this subsection shall affect the purchase of any obligation by the Secretary of the Treasury pursuant to subsection (c) of this section.” End of Quote. Page 16
Only Federal Reserve Banks are authorized to be reimbursed of fees, (section 309).
SEC. 309. GENERAL POWERS OF GOVERNMENT NATIONAL MORTGAGE ASSOCIATION AND FEDERAL NATIONAL MORTGAGE ASSOCIATION
Federal Reserve Banks to Act as Fiscal Agents (Fannie Mae and GNMA)
Quote: “(g) DEPOSITARIES, CUSTODIANS, AND FISCAL AGENTS.—The Federal Reserve banks are authorized and directed to act as depositaries, custodians, and fiscal agents for each of the bodies corporate named in section 302(a)(2), for its own account or as fiduciary, and such banks shall be reimbursed for such services in such manner as may be agreed upon; and each of such bodies corporate may itself act in such capacities, for its own account or as fiduciary, and for the account of others.” End of Quote. Page 29
Links:
FEDERAL NATIONAL MORTGAGE ASSOCIATION CHARTER ACT
As amended through July 25, 2019
link: https://www.fanniemae.com/sites/g/files/koqyhd191/files/migrated-files/resources/file/aboutus/pdf/fm-amended-charter.pdf
HOUSING AND ECONOMIC RECOVERY ACT OF 2008
Link: https://www.congress.gov/110/plaws/publ289/PLAW-110publ289.pdf
SENIOR PREFERRED STOCK PURCHASE AGREEMENT
Dated September 7, 2008.
link: https://www.fhfa.gov/Conservatorship/Documents/Senior-Preferred-Stock-Agree/FNM/SPSPA-amends/FNM-SPSPA_09-07-2008.pdf
ALL THE AGREEMENTS
link: https://www.fhfa.gov/Conservatorship/Pages/Senior-Preferred-Stock-Purchase-Agreements.aspx
It is not limited to the payment the jury awarded, most important, included is the commitment fee with the NWS...
THE LAW OF THE LAND
Code of Federal Regulation
1237.12 Capital distributions while in conservatorship.
(a) Except as provided in paragraph (b) of this section, a regulated entity shall make no capital distribution while in conservatorship.
(b) The Director may authorize, or may delegate the authority to authorize, a capital distribution that would otherwise be prohibited by paragraph (a) of this section if he or she determines that such capital distribution:
No 1: Will enhance the ability of the regulated entity to meet the risk-based capital level and the minimum capital level for the regulated entity;
No 2: Will contribute to the long-term financial safety and soundness of the regulated entity;
No 3: Is otherwise in the interest of the regulated entity; or
No 4: Is otherwise in the public interest.
Section c, this section is intended to supplement and shall not replace or affect any other restriction on capital distributions imposed by statute or regulation.
DID THE NET WORTH SWEEP
Enchance the ability to meet risk-based capital level? NO
Contribute to the long-term financial safety and soundness of the regulated entity? NO
In the interest of the regulated entity? NO
Is otherwise in the public interest? NO
(The taxpayers are responsible for the liabilities of the enterprises).
The Net Worth Sweep could not possibly have any rehabilitative effect and that one of the principal duties of the FHFA Director is to preserve and conserve assets.
Fannie is allowed to retain its earnings until it fully meets its applicable risk-based capital requirement (it’s currently short by $247.8 billion), but those increased retained earnings are matched by a dollar-for-dollar increase in Treasury’s liquidation preference.
https://gov.ecfr.gov/current/title-12/chapter-XII/subchapter-B/part-1237/subpart-D/section-1237.12
LuLeVan, written as plain as day, "Restriction on Capital Distributions.
HOUSING AND ECONOMIC RECOVERY ACT OF 2008
Page 2731
RESTRICTION ON CAPITAL DISTRIBUTIONS.—
‘‘(1) IN GENERAL.—A regulated entity shall make no capital
distribution if, after making the distribution, the regulated
entity would be undercapitalized. The exception on the next page...
Quote: “Page 2732
EXCEPTION.—Notwithstanding paragraph (1), the Director may permit a regulated entity, to the extent appropriate or applicable, to repurchase, redeem, retire, or otherwise acquire shares or ownership interests if the repurchase, redemption, retirement, or other acquisition— ‘‘(A) is made in connection with the issuance of additional shares or obligations of the regulated entity in at least an equivalent amount; and ‘‘(B) will reduce the financial obligations of the regulated entity or otherwise improve the financial condition of the entity.’’.
NOTE: REPURCHASE, REDEEM, RETIRE...
WILL REDUCE THE FINANCIAL OBLIGATIONS OF THE REGULATED ENTITY.
Link: https://www.congress.gov/110/plaws/publ289/PLAW-110publ289.pdf
In essence allows the trustees of Fannie and Freddie to go to the market at any time to raise new capital, including new capital with lower dividend coupons, to buy back the Treasury’s senior preferred. Any loyal conservator of Fannie and Freddie would take advantage of this refinancing option to end the bailout arrangement, by paying off the senior preferred in full.
HappyAlways, I do not think the overpayments you calculate is worth $310 billion.
Not sure exactly the overpayments up to this point in time.
Hamish P.M. Hume stated at the SCOTUS the numbers and that number was $149.4 billion in overpayments.
https://www.supremecourt.gov/DocketPDF/22/22-98/230704/20220722162334690_Petition%20for%20Writ%20Of%20Certiorari.pdf
Page 13 $149.4 billion
This chart shows that the total value of all cash
dividends paid to Treasury under the Net Worth Sweep
($245.9 billion) plus the net worth increases to Treasury’s
liquidation preference made in lieu of cash dividends ($78.3
billion) is equal to $324.2 billion. That is the current total,
using data available through the first quarter of 2022, of
the value transferred to Treasury under the Net Worth
Sweep regime – thus far. Had there been no Net Worth
Sweep, and had the GSEs instead paid the 10% dividend
at the 2012 level of $18.9 billion per year over the last nine
years and a quarter (FAC ¶64), their total payments to
Treasury would have been $174.8 billion (9.25 × $18.9
billion). Accordingly, one approximation of the excess
value transferred thus far to Treasury as a result of the
Net Worth Sweep is $149.4 billion ($324.2 billion received
under the Sweep minus $174.8 billion of 10% dividends
payable absent the Sweep).
But this $149.4 billion estimate actually understates
what Treasury has taken through the Net Worth Sweep,
for two reasons. First, the Net Worth Sweep remains in
effect, such that each quarter’s increase in net worth at
GSE results in an increase in the Treasury’s liquidation
preference in its senior preferred stock. Second, had it not
been for the Net Worth Sweep, the GSEs would have been
able to fully repay the amounts borrowed from Treasury,
with interest, eliminating the need to pay any ongoing
senior preferred dividend.
You keep saying Separate Account behind the scenes. The only separate account is the billions of dollars the Treasury Department has siphoned off the companies, and it’s recorded as the Liquidation Preference that continues to grow. If you’re so determined to back the Treasury Department’s actions tell me when will this Separate Account plan credit back to the balance sheet of the enterprises?? It’s been 15 years! Hello
FOFreddie, not sure how you came up with 80/20. Bryndon wants the warrants extinguished. Page 3
Quote:
Bryndon Fisher
I will say, however, that unlike Collins our two cases are (and have always been) very straight forward and very easy to understand – a return of excess funds to the companies through a quarterly unwinding of the NWS. I have articulated that (and the recapitalization and return of the firms) here:
https://drive.google.com/file/d/1LNWzb9QhI1GiOk8W_2MYgERyE4yNRU04/view?usp=drive_link
All the calculations have been done and supported, so no one will be caught off guard if a judge (like Justice Thomas did during oral arguments in Collins) asks “How will we unscramble this egg?” It’s simply math your Honor, science will have nothing to do with it.
Sir, you stated, " SCOTUS "actually said" was that the Net Worth SWIPE was within the powers "granted" to the FHFA in HERA ..."
If that is the case, why not apply the rest of the Law in HERA?? The NWS apply it to the LP and cancel the SPS.
HOUSING AND ECONOMIC RECOVERY ACT OF 2008
RESTRICTION ON CAPITAL DISTRIBUTIONS.—
‘‘(1) IN GENERAL.—A regulated entity shall make no capital
distribution if, after making the distribution, the regulated
entity would be undercapitalized. The exception.
Quote: “Page 2732
EXCEPTION.—Notwithstanding paragraph (1), the Director may permit a regulated entity, to the extent appropriate or applicable, to repurchase, redeem, retire, or otherwise acquire shares or ownership interests if the repurchase, redemption, retirement, or other acquisition— ‘‘(A) is made in connection with the issuance of additional shares or obligations of the regulated entity in at least an equivalent amount; and ‘‘(B) will reduce the financial obligations of the regulated entity or otherwise improve the financial condition of the entity.’’.
NOTE: REPURCHASE, REDEEM, RETIRE...
WILL REDUCE THE FINANCIAL OBLIGATIONS OF THE REGULATED ENTITY.
Link: https://www.congress.gov/110/plaws/publ289/PLAW-110publ289.pdf
In essence allows the trustees of Fannie and Freddie to go to the market at any time to raise new capital, including new capital with lower dividend coupons, to buy back the Treasury’s senior preferred. Any loyal conservator of Fannie and Freddie would take advantage of this refinancing option to end the bailout arrangement, by paying off the senior preferred in full.
To all the Cram Down People,
TODAY the LP has grown beyond the Net Worth of the company’s value! This means the JPS and the common stock both are wiped out unless the Treasury writes down the Liquidation Preference and cancels the SPS. The Net Worth of the company is not enough to pay off the Treasury let alone pay the JPS and Common Shareholders. And somehow the Treasury will gracefully take a so-called haircut to preserve the JPS and wipeout the common? You are deceived if you think somehow the JPS will be saved.
If the Treasury’s LP continues to grow the regulator is authorized or required to place the companies into receivership under specified conditions, which would result in our liquidation. Money received goes into the dark hole of the Treasury! Which pays off the LP by confiscation of our companies.
Company’s financial statement
Risk Factors Summary
GSE and Conservatorship Risk
Quote: "Our business activities are significantly affected by the senior preferred stock purchase agreement. Our regulator is authorized or required to place us into receivership under specified conditions, which would result in our liquidation. Amounts recovered by our receiver may not be sufficient to pay claims outstanding against us, repay the liquidation preference of our preferred stock or to provide any proceeds to common shareholders." End of Quote Page 33
Link: https://www.fanniemae.com/media/46276/display
"In the event the assets legally available for distribution to stockholders are insufficient to pay the liquidation preference of all Preferred Stock in full, the assets available for distribution will be divided among all holders of Preferred Stock on a pro rata basis, based on the value of the liquidation preference of each series of Preferred Stock." Page 5
Link: https://www.sec.gov/Archives/edgar/data/310522/000031052220000121/descriptionofsecuritie.htm
Man without a name. Are you employed by the government? According to the LAW HERA the Liquidation Preference has been paid in full and the SPS should be cancelled. I’m referring to HERA not the SPSPA optional pay down of the LP that you argue cannot be paid without Treasury’s consent. The SPSPA is a contract not the LAW.
Bryndon, gave us the calculation of the pay down of the liquidation preference . Now if he will apply the LAW written in HERA.
https://drive.google.com/file/d/15978NWfDcTtuClMBnwgWFmoPnwK94vWn/view
The liquidation preference has be paid and the Senior Preferred Stock should be canceled.
The FHFA Director can at any time, REPURCHASE, REDEEM, RETIRE... First the Senior Preferred Stock and second the Junior Preferred Stock.
HOUSING AND ECONOMIC RECOVERY ACT OF 2008
Quote: “Page 2732
EXCEPTION.—Notwithstanding paragraph (1), the Director may permit a regulated entity, to the extent appropriate or applicable, to repurchase, redeem, retire, or otherwise acquire shares or ownership interests if the repurchase, redemption, retirement, or other acquisition— ‘‘(A) is made in connection with the issuance of additional shares or obligations of the regulated entity in at least an equivalent amount; and ‘‘(B) will reduce the financial obligations of the regulated entity or otherwise improve the financial condition of the entity.’’.
NOTE: REPURCHASE, REDEEM, RETIRE...
WILL REDUCE THE FINANCIAL OBLIGATIONS OF THE REGULATED ENTITY.
Link: https://www.congress.gov/110/plaws/publ289/PLAW-110publ289.pdf
In essence allows the trustees of Fannie and Freddie to go to the market at any time to raise new capital, including new capital with lower dividend coupons, to buy back the Treasury’s senior preferred. Any loyal conservator of Fannie and Freddie would take advantage of this refinancing option to end the bailout arrangement, by paying off the senior preferred in full.
Bryndon, gave us the calculation of the pay down of the liquidation preference . Now if he will apply the LAW written in HERA.
https://drive.google.com/file/d/15978NWfDcTtuClMBnwgWFmoPnwK94vWn/view
The liquidation preference has be paid and the Senior Preferred Stock should be canceled.
The FHFA Director can at any time, REPURCHASE, REDEEM, RETIRE... First the Senior Preferred Stock and second the Junior Preferred Stock.
HOUSING AND ECONOMIC RECOVERY ACT OF 2008
Quote: “Page 2732
EXCEPTION.—Notwithstanding paragraph (1), the Director may permit a regulated entity, to the extent appropriate or applicable, to repurchase, redeem, retire, or otherwise acquire shares or ownership interests if the repurchase, redemption, retirement, or other acquisition— ‘‘(A) is made in connection with the issuance of additional shares or obligations of the regulated entity in at least an equivalent amount; and ‘‘(B) will reduce the financial obligations of the regulated entity or otherwise improve the financial condition of the entity.’’.
NOTE: REPURCHASE, REDEEM, RETIRE...
WILL REDUCE THE FINANCIAL OBLIGATIONS OF THE REGULATED ENTITY.
Link: https://www.congress.gov/110/plaws/publ289/PLAW-110publ289.pdf
In essence allows the trustees of Fannie and Freddie to go to the market at any time to raise new capital, including new capital with lower dividend coupons, to buy back the Treasury’s senior preferred. Any loyal conservator of Fannie and Freddie would take advantage of this refinancing option to end the bailout arrangement, by paying off the senior preferred in full.
HappyAlways, The Senior Preferred Stock Purchase Agreement forced on the companies as it is written is against the LAW, as strange as it may sound the so called Expert Lawyers never mentioned the Law of the Land.
Where is "maximize profits for taxpayers" written in the Charter Act?” Specifically, in this provision entitled Fee Limitation of the United States” ??
READ IT. Page 16 THE LAW
Neither the Charter Act nor did HERA authorize the Treasury to charge a commitment fee on a line of credit to be paid by the Enterprise. The United States prohibition on assessment or collection of fee or charge to Fannie Mae, (section 304 Fee Limitation). Only Federal Reserve Banks are authorized to be reimbursed of fees, (section 309).
SEC. 304. SECONDARY MARKET OPERATION
Fee Limitation
Quote: “(f) PROHIBITION ON ASSESSMENT OR COLLECTION OF FEE OR CHARGE BY UNITED STATES.—Except for fees paid pursuant to section 309(g) of this Act and assessments pursuant to section 1316 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, no fee or charge may be assessed or collected by the United States (including any executive department, agency, or independent establishment of the United States) on or with regard to the purchase, acquisition, sale, pledge, issuance, guarantee, or redemption of any mortgage, asset, obligation, trust certificate of beneficial interest, or other security by the corporation. No provision of this subsection shall affect the purchase of any obligation by the Secretary of the Treasury pursuant to subsection (c) of this section.” End of Quote. Page 16
https://www.fanniemae.com/sites/g/files/koqyhd191/files/migrated-files/resources/file/aboutus/pdf/fm-amended-charter.pdf
The Jury needed to hear this fact.
When Paulson met with the directors of Fannie Mae and Freddie Mac to inform them of his intent to take over their companies, neither entity met any of the twelve conditions for conservatorship spelled out in the newly passed HERA legislation. Paulson since has admitted he took the companies over by threat.
“Where is "maximize profits for taxpayers" written in the Charter Act?” Specifically, in this provision entitled Fee Limitation of the United States:
Reported 2009 long before the Net Worth Sweep.
Concrete Life Preserver
Deferred Tax Assets fabricated losses...
FHFA and Treasury engineered these large and early losses deliberately. But without these engineered losses, Fannie Mae would never have run out of capital, and would have survived the financial crisis stronger than ever.
Fannie Mae
Form 10K For the fiscal year ended December 31, 2009
Quote: “The aggregate liquidation preference on the senior preferred stock will be $76.2 billion, which will require an annualized dividend of approximately $7.6 billion. This amount exceeds our reported annual net income for all but one of the last eight years, in most cases by a significant margin. Our senior preferred stock dividend obligation, combined with potentially substantial commitment fees payable to Treasury starting in 2011 (the amounts of which have not yet been determined) and our effective inability to pay down draws under the senior preferred stock purchase agreement, will have a significant adverse impact on our future financial position and net worth.” End of Quote Page 7
Link: https://www.fanniemae.com/sites/g/files/koqyhd191/files/migrated-files/resources/file/ir/pdf/quarterly-annual-results/2009/form10k_022610.pdf
Mr. Howard,
Quote: Once in conservatorship, the Companies’ managements had no role in negotiating the terms on which they would be offered assistance; Treasury and FHFA set these terms unilaterally. They included a requirement that any shortfalls in the Companies’ book capital be covered with “draws” of senior preferred stock that never could be repaid, meaning Fannie and Freddie had to pay a dividend to Treasury of 10 percent after-tax in cash, or 12 percent in kind, in perpetuity, on their highest amounts of senior preferred stock outstanding at any one time. This unprecedented non-repayment feature gave Treasury and FHFA an extremely strong incentive to make accounting choices for the Companies that accelerated or exaggerated their expenses and greatly increased their losses, in order to create a large and permanent flow of revenue to Treasury.
Between the time Fannie and Freddie were put into conservatorship and the end of 2011, well over $300 billion in non-cash accounting expenses were recorded on their income statements. These non-cash expenses, most of which were discretionary, eliminated all of the Companies’ capital and forced them, together, to take $187 billion from Treasury.
But because accelerated or exaggerated expenses cause losses that are only temporary, Fannie’s and Freddie’s non-cash losses began to reverse themselves in 2012. Coupled with profits resulting from a rebounding housing market, the reversal of these losses enabled both Companies to report in August 2012 sufficient second quarter income to not only pay their dividends to Treasury but also retain a total of $3.9 billion in capital.
As soon as it became apparent that a large percentage of the non-cash accounting losses booked during the previous four years was about to come back into income, Treasury and FHFA entered into the Third Amendment to the PSPA. The Third Amendment substituted for the fixed dividend payment a requirement that all future earnings—including reversals of accounting-related expenses incurred earlier—be remitted to Treasury. From the time the Third Amendment took effect through the end of 2014, Fannie and Freddie paid Treasury $170 billion, $133 billion more than they would have owed absent the Amendment.” End of Quote
Link: https://howardonmortgagefinance.com/2015/07/
The article Printed a mistake. These expert lawyers never mentioned the Charter Act!
Someone show where the Law authorized conservatorship. IT’S NOT IN THE LAW! The companies did not meet the requirements passed in the HERA legislation for conservatorship.
Article Quote: “The law authorizing conservatorship directed FHFA as conservator to “preserve and conserve assets,” End of Quote
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=172643316
The Senior Preferred Stock Purchase Agreement is not a law: The SPSPA is an illegal contract: The Charter Act is the Law.
THE LAW
Neither the Charter Act nor did HERA authorize the Treasury to charge a commitment fee on a line of credit to be paid by the Enterprise. The United States prohibition on assessment or collection of fee or charge to Fannie Mae, (section 304 Fee Limitation). Only Federal Reserve Banks are authorized to be reimbursed of fees, (section 309).
SEC. 304. SECONDARY MARKET OPERATION
Fee Limitation
Quote: “(f) PROHIBITION ON ASSESSMENT OR COLLECTION OF FEE OR CHARGE BY UNITED STATES.—Except for fees paid pursuant to section 309(g) of this Act and assessments pursuant to section 1316 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, no fee or charge may be assessed or collected by the United States (including any executive department, agency, or independent establishment of the United States) on or with regard to the purchase, acquisition, sale, pledge, issuance, guarantee, or redemption of any mortgage, asset, obligation, trust certificate of beneficial interest, or other security by the corporation. No provision of this subsection shall affect the purchase of any obligation by the Secretary of the Treasury pursuant to subsection (c) of this section.” End of Quote. Page 16
Only Federal Reserve Banks are authorized to be reimbursed of fees, (section 309).
SEC. 309. GENERAL POWERS OF GOVERNMENT NATIONAL MORTGAGE ASSOCIATION AND FEDERAL NATIONAL MORTGAGE ASSOCIATION
Federal Reserve Banks to Act as Fiscal Agents (Fannie Mae and GNMA)
Quote: “(g) DEPOSITARIES, CUSTODIANS, AND FISCAL AGENTS.—The Federal Reserve banks are authorized and directed to act as depositaries, custodians, and fiscal agents for each of the bodies corporate named in section 302(a)(2), for its own account or as fiduciary, and such banks shall be reimbursed for such services in such manner as may be agreed upon; and each of such bodies corporate may itself act in such capacities, for its own account or as fiduciary, and for the account of others.” End of Quote. Page 29
https://www.fanniemae.com/sites/g/files/koqyhd191/files/migrated-files/resources/file/aboutus/pdf/fm-amended-charter.pdf
https://www.congress.gov/110/plaws/publ289/PLAW-110publ289.pdf
Guido, that’s a great question, “How is sending their equity to Treasury saving the corporations?”
Ignoring the facts that the NWS could not possibly have any rehabilitative effect.
KT wrote, “The Supreme Court said in its Collins opinion that FHFA could "rehabilitate" FnF in a way that advances the public interest, while ignoring the facts that the NWS could not possibly have any rehabilitative effect and that one of the principal duties of the FHFA Director is to preserve and conserve assets, which takes precedence over an incidental powers clause.”
Tim did the numbers, “Fannie is allowed to retain its earnings until it fully meets its applicable risk-based capital requirement (it’s currently short by $247.8 billion), but those increased retained earnings are matched by a dollar-for-dollar increase in Treasury’s liquidation preference.”
These expert lawyers never mention the Charter Act!
Barron said it best. Introduce this into the courtroom.
Quote: “ I posit that the variable liquidation preference outlined in the SPSPA and all amendments are an illegal commitment fee/charge attached to the purchase of the senior preferred shares. Prohibited by the Charter Act. The warrants are also a fee in consideration for access to the commitment. Prohibited by the Charter Act.
I posit that the senior preferred shares with their variable liquidation preference as outlined in the SPSPA constitute a new product for the purpose of the secondary mortgage market outlined in the charter act at sec 1719.
I posit that under the safety and soundness act as modified by HERA, the sale of SPS with a variable liquidation preference to Treasury under authority of sec 1719(g) of the Charter Act required notice in the federal register, opportunity for public comment, and official rule making by the plain language of the safety and soundness act.
I posit that the above statutory violations necessarily violate the warranties on behalf of the FHFA-C contained in the SPSPA.
301 Billion to be returned to the corporation. LP and warrants canceled. Future of 191 billion of taxpayer debt illegally given to corps to be determined.” End of Quote
The article Printed a mistake,
Quote: “The law authorizing conservatorship directed FHFA as conservator to “preserve and conserve assets,” End of Quote
The Senior Preferred Stock Purchase Agreement is not a law: The SPSPA is an illegal contract: The Charter Act is the Law.
THE LAW
Neither the Charter Act nor did HERA authorize the Treasury to charge a commitment fee on a line of credit to be paid by the Enterprise. The United States prohibition on assessment or collection of fee or charge to Fannie Mae, (section 304 Fee Limitation). Only Federal Reserve Banks are authorized to be reimbursed of fees, (section 309).
SEC. 304. SECONDARY MARKET OPERATION
Fee Limitation
Quote: “(f) PROHIBITION ON ASSESSMENT OR COLLECTION OF FEE OR CHARGE BY UNITED STATES.—Except for fees paid pursuant to section 309(g) of this Act and assessments pursuant to section 1316 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, no fee or charge may be assessed or collected by the United States (including any executive department, agency, or independent establishment of the United States) on or with regard to the purchase, acquisition, sale, pledge, issuance, guarantee, or redemption of any mortgage, asset, obligation, trust certificate of beneficial interest, or other security by the corporation. No provision of this subsection shall affect the purchase of any obligation by the Secretary of the Treasury pursuant to subsection (c) of this section.” End of Quote. Page 16
Only Federal Reserve Banks are authorized to be reimbursed of fees, (section 309).
SEC. 309. GENERAL POWERS OF GOVERNMENT NATIONAL MORTGAGE ASSOCIATION AND FEDERAL NATIONAL MORTGAGE ASSOCIATION
Federal Reserve Banks to Act as Fiscal Agents (Fannie Mae and GNMA)
Quote: “(g) DEPOSITARIES, CUSTODIANS, AND FISCAL AGENTS.—The Federal Reserve banks are authorized and directed to act as depositaries, custodians, and fiscal agents for each of the bodies corporate named in section 302(a)(2), for its own account or as fiduciary, and such banks shall be reimbursed for such services in such manner as may be agreed upon; and each of such bodies corporate may itself act in such capacities, for its own account or as fiduciary, and for the account of others.” End of Quote. Page 29
https://www.fanniemae.com/sites/g/files/koqyhd191/files/migrated-files/resources/file/aboutus/pdf/fm-amended-charter.pdf
https://www.congress.gov/110/plaws/publ289/PLAW-110publ289.pdf
The calculation is based on the earnings power of the companies business.
The Treasury has received over 301 billion from the companies and could easily allow the “Optional Pay Down of Liquidation Preference” with monies received. It’s all fraud, somehow it’s legal fraud, but nevertheless fraud. And everyone knows it.
We can’t bury our heads in the sand, I don’t know anyone that knows how this is will end, I listed several possibilities how this could end.
Everyone is wiped out unless the Treasury decides or is forced by a court of law to write down the Liquidation Preference and declare the SPS paid in full.
Treasury’s Liquidation Preference calculated value is more valuable RIGHT NOW than the calculated value of the entire businesses ! Both JPS and Common are wiped out!
What is your investment worth?
If and when the conservatorship ends the question, how much value will each equity holder receive price per share?
Depends on possible amount of dilution of the common stock either by warrants, IPO, RE IPO or Treasury cram down or a combination of the above.
What are the companies worth?
Fannie and Freddie calculated intrinsic earnings value are $240 billion and $139.9 billion, calculation is based on a multiple of a 12 year period of time.
Fannie Mae common stock outstanding 1,158,087,567 and if diluted by the warrants at 79.9 percent adds a total of 5,761,629,686 shares… Treasury would hold 4,603,542,119 billion shares.
Freddie Mac common stock outstanding 650,059,553 if diluted by the warrants at 79.9 percent adds a total of 3,234,127,134 shares… Treasury would hold 2,584,067,580 billion shares.
Fannie Mae
JPS are due $19.1 billion (par value) and the common shares own the company.
Freddie Mac
JPS are due $14.1 billion (par value) and the common shares own the company.
Fannie Mae
EARNINGS POWER OF THE BUSINESS
$240 Billion Intrinsic Value
net earnings $5.0 billion per quarter, a projection of $20 billion net per year.
At 12 years x $20 billion = $240 billion / total outstanding shares fully diluted = price per share.
Freddie Mac
EARNINGS POWER OF THE BUSINESS
$139.9 Billion Intrinsic Value
net earnings $2.9 billion per quarter, a projection of $11.6 billion net per year.
At 12 years x $11.6 billion = 139.2 billion / total outstanding shares fully diluted = price per share.
Help me understand this, the fact that FHFA isn’t on the hook for these damages; in the Lamberth case. GSEs in conservatorship in 2023 are required to make payment for a decision made by FHFA as conservator in 2012?? Why, are the companies made to pay the damages??
I apologize Robert if I sounded rude. Appreciate everyone on this board that contribute to the publishing of the truth.
I agree Chess it’s an opinion. The article’s opinion is wrong, and I suggest if we post articles that print half truths we should point out the facts.
There was no 'Emergency.
FHFA freely admitted the companies were adequately capitalized, evidence the companies exceeded capital requirements absolutely no need for emergency funding.
SECOND QUARTER CAPITAL RESULTS
Minimum Capital
Fannie Mae’s FHFA-directed capital requirement on June 30, 2008 was $37.5 billion and its statutory minimum capital requirement was $32.6 billion. Fannie Mae’s core capital of $47.0 billion exceeded the FHFA-directed capital requirement by $9.4 billion.
Freddie Mac’s FHFA-directed capital requirement on June 30, 2008 was $34.5 billion and its statutory minimum capital requirement was $28.7 billion. Freddie Mac’s core capital of $37.1 billion exceeded the FHFA-directed minimum capital requirement by $2.7 billion.
The article only printed half truth, the companies were not bust.
Quote:“The background is that in that 2007/8 period both Fannie Mae and Freddie Mac went, effectively, bust.”End of Quote
Many news agencies get it wrong. Let’s quit posting articles spreading half truths.
CASH GENERATORS
EARNINGS POWER OF THE BUSINESS
Freddie Mac $139.2 billion
Fannie Mae $240 billion
Freddie Mac
June 30, 2023
Freddie Mac Reports Net Income of $2.9 Billion for Second Quarter 2023
Freddie Mac net earnings $2.9 billion per quarter, a projection of $11.6 billion net per year.
Price to Earnings ratio 12 x $11.6 billion = 139.2 billion.
Fannie Mae
June 30, 2023
Fannie Mae Reports Net Income of $5.0 Billion for Second Quarter 2023
EARNINGS POWER OF THE BUSINESS
Fannie Mae’s net earnings $5.0 billion per quarter, a projection of $20 billion net per year.
Price to Earnings ratio 12 x $20 billion = $240 billion
It’s not the topic of a short squeeze or the number of shares sold short. It’s the Naked Short shares which are counterfeit shares outstanding that’s the concern of the Market Makers present tense.
Now we find out if anyone is holding counterfeit shares of Freddie Mac common stock. Every common shareholder of Freddie Mac will have to be counted for.
Failure to Deliver
What happens when the shareholders find out their shares possibly do not exist?
The U.S. Securities and Exchange Commission knew about this, it's reported on their website.
In a "naked" short sale, the seller does not borrow or arrange to borrow the securities in time to make delivery to the buyer within the standard two-day settlement period. As a result, the seller fails to deliver securities to the buyer when delivery is due; this is known as a "failure to deliver" or "fail."
COUNTERFEITING
INFORMATION FROM: U.S. Securities and Exchange Commission web site.
The counterfeiting of U.S. assets. Theft from pension funds, State employee retirement accounts, and U.S. Citizens. The counterfeiting of shares of Fannie Mae and Freddie Mac. Where are our regulators and who are they protecting?
https://www.sec.gov/comments/s7-08-09/s70809-407a.pdf#:~:text=Fannie%20Mae%20and%20Freddie%20Mac%20are%20publicly%20traded,was%20occurring%20in%20the%20trading%20of%20the%20GSEs.
https://www.sec.gov/answers/nakedshortsale
Does this mean the ‘Cram Down’ is off the table?
Donotunderstand,
said Quote: “lets understand the size of a possible gain if the court finds the SPSPA null and void -“ End of Quote
I gave you the numbers based on Barron’s win with the little tucker act in local federal district court.
Link: https://investorshub.advfn.com/boards/read_msg.aspx?message_id=172596100
Brooge, this is what Barron said,
Quote: "Barron4664
Re: EternalPatience post# 759486
Sunday, July 16, 2023 11:38:58 AM
Post#
759491
of 763103
Thanks for the suggestion. I think a gofundme at this point would be self-defeating. The nature of the anticipated claim being contemplated is a lawsuit in federal district court alleging an illegal exaction arising from a continuation of injury from the Treasury assessing a commitment fee in the form of increasing Liquidation Preference on the Senior Preferred Shares. Under the little tucker act, the claim must demonstrate monetary damages less than $10,000. The common shares were bought in 2014. The statute of limitations is 6-years. The latest letter agreements and amendments to the SPSPA changing the form of Liquidation Preference fee occurred within the past 6 years and after I purchased the shares. This should extend the SOL from the original agreement according to published DOJ policy. That should establish standing. At this point, I don‘t know how to quantify the monetary injury to share price for these changes to the SPSPA agreement. I dont want to even calculate it because that would devolve down a rabbit hole of expert opinions, testimony etc. just look at the Lamberth Jury trial fiasco.
What I will have is receipts from the federal court for filing and serving the officials. This is a concrete indisputable money damage that arrises from attempting to mitigate a continuous injury to my property arising out of the commitment fee imposed by the Treasury. A question I have is if I limit the exaction to court costs alone, will I have failed to state a claim? If I use other peoples money such as a gofundme at this point, then I couldnt state a claim because I didnt pay the costs.
I anticipate 3 different outcomes.
The most likely would be the claim is dismissed on procedural grounds and subject matter is never adjudicated. This seems to be the preferred method of disposing claims by the gov. I will lose my money.
The claim will be dismissed on subject matter grounds. The Judge will agree that the Treasury had every legal right to impose the commitment fees for access to the line of credit. SpSPA stands, I pay court costs.
The claim is upheld. I am awarded court costs and the Judge finds the SPSPA null and void as agreed to by Treasury for violating FNMA incorporation documents." End of Quote
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=172353217
I remember someone stated on this board 'Domino Effect' only need one to start the beginning of the end.
Brooge, you asked "please share details"
12 U.S. Code § 4541 - Prior approval authority for products
There you have it.
Link: https://www.law.cornell.edu/uscode/text/12/4541
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=172449191
Barron Quote:
“I posit that the variable liquidation preference outlined in the SPSPA and all amendments are an illegal commitment fee/charge attached to the purchase of the senior preferred shares. Prohibited by the Charter Act. The warrants are also a fee in consideration for access to the commitment. Prohibited by the Charter Act.
I posit that the senior preferred shares with their variable liquidation preference as outlined in the SPSPA constitute a new product for the purpose of the secondary mortgage market outlined in the charter act at sec 1719.
I posit that under the safety and soundness act as modified by HERA, the sale of SPS with a variable liquidation preference to Treasury under authority of sec 1719(g) of the Charter Act required notice in the federal register, opportunity for public comment, and official rule making by the plain language of the safety and soundness act.
I posit that the above statutory violations necessarily violate the warranties on behalf of the FHFA-C contained in the SPSPA.
301 Billion to be returned to the corporation. LP and warrants canceled. Future of 191 billion of taxpayer debt illegally given to corps to be determined.” End of Quote
He has posted about this for months. Read his post history.