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Probably will be decided in May or June, but one never knows for sure WHEN exactly!
Guess whose going to issue at least one opinion next Thursday, on April Fools Day?
https://www.supremecourt.gov/
Months supply of homes on the market from NAR (6 months = equilibrium)
2020 January 3.5
February 3.4
March 3.4
April 3.9
May 4.2
June 3.6
July 2.8
August 2.9
September 2.6
October 2.5
November 2.4
December 2.3
2021 January r 2.1
February p 2.0
* Seasonally adjusted supply / seasonally adjusted sales
Freddie's February Monthly Volume: "February 2021 Highlights: ? The total mortgage portfolio increased at an annualized rate of 17.7% in February. ? Single-family refinance-loan purchase and guarantee volume was $85.0 billion in February, representing 77% of
total single-family mortgage portfolio purchases and issuances. ? The aggregate unpaid principal balance (UPB) of our mortgage-related investments portfolio decreased by
approximately $7.4 billion in February. ? Freddie Mac mortgage-related securities and other mortgage-related guarantees increased at an annualized rate
of 21.3% in February. ? Our single-family delinquency rate decreased from 2.56% in January to 2.52% February. Our multifamily
delinquency rate decreased from 0.16% in January to 0.14% in February. ? The measure of our exposure to changes in portfolio value (PVS-L) averaged $103 million in February. Duration
gap averaged 0 months. ? Since September 2008, Freddie Mac has been operating in conservatorship, with the Federal Housing Finance
Agency (FHFA) acting as Conservator. ? As of February, our maximum exposure to Fannie Mae-issued collateral that was included in Freddie Mac-issued
resecuritizations was approximately $91.5 billion, and is not in Table 4."
http://www.freddiemac.com/investors/financials/monthly-volume-summaries.html
FHFA Releases 4th Quarter 2020 Foreclosure Prevention and Refinance Report
?Washington, D.C. – The Federal Housing Finance Agency (FHFA) today released its fourth quarter 2020 Foreclosure Prevention and Refinance Report, which shows that Fannie Mae and Freddie Mac (the Enterprises) completed 362,912 foreclosure prevention actions in the fourth quarter of 2020, bringing the total number of homeowners who have been helped during conservatorships to 5.588 million.
The report also shows that 30 percent of loan modifications completed in the fourth quarter reduced borrowers' monthly payments by more than 20 percent. The number of refinances increased from 1.76 million in the third quarter to 2.01 million in the fourth quarter.
The Enterprises' serious delinquency rate dropped from 3.14 percent to 2.78 percent at the end of the quarter. This compares with 11.19 percent for Federal Housing Administration (FHA) loans, 5.96 percent for Veterans Affairs (VA) loans and 5.03 percent for all loans (industry average).
Other highlights from the report include:
Forbearance: The total number of loans in forbearance continued to trend downward since its peak in May as initiated forbearance plans decreased, but remained elevated through the fourth quarter (compared with pre-pandemic levels). As of December 31, there were 804,559 loans in forbearance, representing approximately 2.8 percent of the Enterprises' single-family conventional book of business, down from 1,045,808—or 3.7 percent—at the end of the third quarter.
Mortgage Performance: The 60+ days delinquency rate decreased from 3.58 percent at the end of the third quarter to 3.07 percent at the end of the fourth quarter. The delinquency rate remained elevated as a result of the COVID-19 pandemic and the forbearance programs being offered to affected borrowers.
Foreclosures: The number of foreclosure starts dropped 7 percent from 6,809 in the third quarter to 6,302 in the fourth quarter.
Real Estate Owned (REO) Activity & Inventory: Enterprises' REO inventory declined 16 percent from 11,614 in the third quarter to 9,739 in the fourth quarter. The total number of property acquisitions decreased 7 percent to 1,141, while dispositions decreased 41 percent to 3,017 during the quarter.
FHFA's quarterly foreclosure prevention and refinance reports include data on the Enterprises' mortgage performance, delinquencies, active forbearance plans as well as forfeiture actions and refinances by state. The data included in these reports are also available on FHFA's website as an interactive Borrower Assistance Map.
I think she's already in hot water and she just started: https://www.cnn.com/2021/03/19/politics/marcia-fudge-hatch-act/index.html
Nice find, Navy! Latest from TH: "If Collins plaintiffs get the remedy they’re seeking on the APA claim–a retroactive re-characterization of sweep payments in excess of a ten percent dividend (at a quarterly rate) on the prior quarter’s amount of outstanding senior preferred stock as pay-downs of the balance of that preferred, and any remaining excess sweep payments returned over time as credits against federal income taxes owed by the companies–this would have no impact on the federal budget at all. That’s an important reason in support of a favorable ruling by SCOTUS on the APA issue–it can be made without headline-generating consequences."
If not tomorrow then before July 1st...
Seems to me that the SCOTUS WILL provide some long overdue relief to the Collins Plaintiffs, we'll see what happens!
Thanks Mr. Michael I believe that the days of the nws and 12.5 year conservatorship are numbered stay long and strong and good luck to all!
Quote: "In fact, I have found that an increased number of calls for junior pref shareholders to switch over to commons is a good indicator that the chart will head the other direction instead. The last time this happened was early 2019."
So you are saying that you actually counted the number of daily calls for jps to convert to common and plotted it against the price per share or is that a casual observation?
I can't recall ANY ruling by ANY singular Judge or panel of Judges that was as extensive as the 5th Circuit EnBanc Panel majority ruling. If you know of one I'd like to read it! Are you saying that more seperate Judges ruled in favor of the idea that the nws was NOT ultra vires? Of the Judges that did rule that the nws was NOT ultra vires, did they know about all the documents publicly released from Discovery showing the governments improper intent?
If agreeing to allow a wards profits into perpetuity to go to one creditor (here the UST) is NOT a Nationalization, then what is it, a horrifically horrible business decision?
What about the clear intent of the US Government expressed by Jim Parrot emails and all the other discovery Documents pointing to bad actor Governmental Intent?
From todays WSJ: "Parents and children, siblings and grandparents are shacking up during the pandemic, opting for living in close quarters over quarantining from each other. Some 15% of people who bought homes between April and June of last year planned to have multiple generations living there, according to a survey by the National Association of Realtors. That is up from 11% of those who bought between July 2019 and March 2020, and the highest level in survey data going back to mid-2012.
The joint-venture home purchase represents just one way Covid-19 has upended Americans' living situations. Many millennials are moving back to their childhood homes, and Gen X-ers are putting in garage apartments or backyard houses for elderly parents.
Jessica Lautz, vice president of demographics and behavioral insights at the Realtors association, expects the share of adult children and parents buying homes together to continue to increase.
The recent jump was primarily attributable to people who wanted to take care of their aging parents, she said.
Saving money is an important consideration too: Tight housing supply drove the median existing-home price to $303,900 in January, up 14% from a year earlier, according to NAR."
https://www.cnbc.com/2021/03/22/existing-home-sales-fell-sharply-in-february-as-supply-declined-at-record-pace.html
"The supply of homes for sale fell 29.5% year over year, the largest annual decline ever, to 1.03 million homes.
At the current sales pace, it would take two months to exhaust this supply. One year ago, there was a three-month supply, which is also considered low.
That tight supply continues to fuel home prices, which were 15.8% higher in February year over year. The median price of an existing home sold during the month was $313,000. That is the highest February price on record. Prices are rising due to bidding wars for homes, but the median was also skewed higher because more sales are occurring on the higher end of the market.
Sales of homes priced above $1 million were 81% higher compared with a year ago. Houses priced between $100,000 and $250,000 fell 11%."
HOMEOWNER ASSISTANCE FUND
As the economic fallout from the COVID-19 crisis took form, millions of Americans were faced with the pressures of having to decide between making mortgage payments and other essential obligations. This was especially true for the low-income communities and communities of color who bore the brunt of this crisis. Across the country, one in 10 homeowners with a mortgage are behind on payments. The law takes immediate steps to help Americans stay in their homes and keep a roof over their heads.
The American Rescue Plan provides nearly $10 billion for states, territories, and Tribes to provide relief for our country’s most vulnerable homeowners. This includes:
A minimum of $50 million for each state, the District of Columbia and Puerto Rico;
$30 million for the territories of Guam, American Samoa, the United States Virgin Islands, and the Commonwealth of the Northern Mariana Islands;
An explicit mandate to prioritize socially disadvantaged households;
The law prioritizes those homeowners that have experienced the greatest hardships, leveraging local and national income indicators to maximize intended impact. Applicable funding uses include delinquent mortgage payments, allowing Americans across the country to take a step in the right direction toward household stabilization. These necessary actions will minimize foreclosures in the coming months, alleviate emergency shelter capacity, and mitigate potential COVID-19 infections.
EMERGENCY RENTAL ASSISTANCE
An underlying consequence of the COVID-19 pandemic is that household stability is not just a financial security issue, but also a health concern. As the country entered the throes of the crisis, many cities and states began creating or expanding rental assistance programs to support at-risk households. The December appropriations bill provided $25 billion of federal relief to be administered by the Emergency Rental Assistance (ERA) program for disbursement to existing state and local government programs. The American Rescue Plan nearly doubles the initial funding to expand the reach and impact of the existing ERA program, taking additional steps to mitigate the financial harm caused by the pandemic and keeping Americans safe as the country addresses the virus.
The American Rescue Plan provides $21.6 billion for states, territories, and local governments to assist households that are unable to pay rent and utilities due to the COVID-19 crisis. This includes:
A minimum of $152 million for each state and the District of Columbia;
$305 million for the Commonwealth of Puerto Rico, the United States Virgin Islands, Guam, the Commonwealth of the Northern Mariana Islands, and American Samoa;
$2.5 billion for payments to “high-need grantees,” locations with an urgent need for assistance when factoring conditions such as change in employment, concentration of very low-income renters, and rental market costs
As a result of the American Rescue Plan, states and localities across the country will be better armed to provide relief and assistance to those vulnerable households. The new funding will leverage existing program structures, allowing for money to be disbursed quickly and efficiently to on the ground emergency programs, and ensuring this country’s hardest-hit families to receive their equitable share of relief.
https://home.treasury.gov/news/press-releases/jy0069
I think you make a good point, it is clear that the tbtf banks desperately want the federal government to hand out MBS GOVERNMENT GUARANTEE CHARTERS like candy to them! The 2019 Housing Plan wants it, MC wants it, SM wanted it and the MBA, NAR, and NHBA wants it and has worked behind the scenes on it! After the PLS took down the world economy in 08-09, I don't think Congress wants it!
As I recall you have a history with the local union, this morning the SCOTUS heard a case involving a California law that allows Union organizers access to a private employers farm for up to 3 hours a day for up to 120 days a year. Is this easement on private property by the government a taking of private property?
https://www.scotusblog.com/
Existing-home sales fell 6.6% in February to a seasonally-adjusted annual rate of 6.22 million, but sales are still 9.1% higher than last year.
The median existing-home sales price rose to $313,000, 15.8% higher from one year ago, with all regions posting double-digit price gains.
As of the end of February, housing inventory remained at a record-low of 1.03 million units, down by 29.5% year-over-year – a record decline. Properties typically sold in 20 days, also a record low.
https://www.nar.realtor/newsroom/existing-home-sales-descend-6-6-in-february
Quote: "It's not about what I believe, but instead what the various judges in their courts believe. The Fifth Circuit en banc panel is the only one so far to rule that the NWS was actually ultra vires. Even Judge Sweeney in the USCFC said "In light of the above, the FHFA-C’s execution of the PSPA Amendment for each Enterprise was a “quintessential conservatorship task[]” that isappropriate under HERA." on page 16 of her ruling on the motion to dismiss in the Fairholme case.
Now it is quite possible, and I hope it comes to pass, that the Supreme Court agrees with the en banc panel's ruling that the NWS was ultra vires. But I have learned not to take anything for granted when it comes to these cases."
Yes there was a conflict in the Circuits as to whether or not the nws was or was not an ultra vires act of a conservator. The EnBanc Panel majority ruling considered that in their ruling and explained why their could be a difference (see paragraph 8-9):
"Now to apply this understanding of conservator powers to the Third Amendment. We hold the Shareholders stated a plausible claim that the Third Amendment exceeded statutory authority. Transferring substantially all capital to Treasury, without limitation, exceeds FHFA's powers to put the GSEs in a "sound and solvent condition," "carry on the[ir] business," and "preserve and conserve
[938 F.3d 583]
[their] assets and property."188 We ground this holding in statutory interpretation, not business judgment.
In adopting the net worth sweep, the Agencies abandoned rehabilitation in favor of "winding down" the GSEs. Treasury announced that the Third Amendment would "expedite the wind down of Fannie Mae and Freddie Mac" and ensure that the GSEs "will be wound down and will not be allowed to retain profits, rebuild capital, and return to the market in their prior form."189 The FHFA acting Director also said that the Third Amendment "reinforce[d] the notion that the [GSEs] will not be building capital as a potential step to regaining their former corporate status."190 In a report to Congress, FHFA explained that it was "prioritizing [its] actions to move the housing industry to a new state, one without Fannie Mae and Freddie Mac."191 For reasons we are about to explain, this "wind down" exceeded the conservator's powers and is the type of transaction reserved for a receiver.
As a textual matter, the net worth sweep actively undermined pursuit of a "sound and solvent condition," and it did not "preserve and conserve" the GSEs' assets.192 Treasury has collected $195 billion under the net worth sweep.193 This alone exceeds the $187 billion it invested.194 After paying back more than the initial investment, the GSEs remain on the hook for Treasury's entire $189 billion liquidation preference.195 And under the net worth sweep, Treasury has a right to the GSEs' net worth in perpetuity.196
FHFA had authority, of course, to pay back Treasury for the GSEs' draws on the funding commitment. The funding commitment provided liquidity and took on risk, so Treasury was also entitled to compensation for the cost of financing. But the net worth sweep continues transferring the GSEs' net worth indefinitely, well after Treasury has been repaid and the GSEs returned to sound condition. That kind of liquidation goes beyond the conservator's powers.
FIRREA precedent confirms that this exceeds statutory conservator powers. In Elmco Properties, the Fourth Circuit held that a creditor was unlawfully deprived of its claim because it never received notice of the receivership.197 The creditor had notice of a conservatorship. But "the RTC as conservator cannot ... liquidate a failed bank. Instead, the conservator's function is to restore the bank's solvency and preserve its assets."198 Dividing up and distributing the institution's property is inconsistent with a conservator's powers, so the creditor in Elmco was not on inquiry notice to pursue its claim.199 To "wind down" the
[938 F.3d 584]
GSEs' affairs here, FHFA needed to follow HERA's carefully crafted receivership procedures. But FHFA was never appointed receiver, so it lacked authority to bleed the GSEs' profits in perpetuity.
Finally, based on the Shareholders' allegations, the net worth sweep is inconsistent with conservatorship's common-law meaning. In United States v. Chemical Foundation, the Supreme Court characterized a wartime enemy-property custodian as "a mere conservator" with "the powers of a common-law trustee."200 And a common-law conservator may not give the ward's assets to a single shareholder, just as a fiduciary or trustee may not do so.201 Admittedly, HERA modified the common-law meaning in some ways, such as by permitting use of enumerated powers in FHFA's best interest.202 But in more relevant areas HERA provided no "contrary direction" against the common-law meaning:203 It did not authorize a conservator to "wind down" the ward's affairs or perpetually drain its earnings. Under traditional principles of insolvency, investors and the market reasonably expect a conservator to "operate, rehabilitate, reorganize, and restore the health of the troubled institution," not summarily take its property.204 The Third Amendment inverts traditional conservatorship.
It is worth noting that the facts at this stage are distinguishable from those in some sister-circuit decisions. The Shareholders appeal from a dismissal under Rule 12(b)(6). The complaint alleges facts showing ultra vires action that were not present in some other cases. For example, emails suggest that the Agencies designed the Third Agreement to prevent Fannie and Freddie from recapitalizing. National Economic Council advisor Jim Parrott, who worked with Treasury in developing the net worth sweep, allegedly wrote: "[W]e've closed off [the] possibility that [Fannie and Freddie] ever[] go (pretend) private again."205 Similarly, when Bloomberg published a comment that "[w]hat the Treasury Department seems to be doing here, and I think it's a really good idea, is to deprive [Fannie and Freddie] of all their capital so that [they can not go private again]," Parrott emailed the source: "Good comment in Bloomberg—you are exactly right on substance and intent."206 The emails reinforce that the Third Amendment "deprive[d]" the GSEs of their capital, keeping them in a permanent state of suspension, which is not authorized by statutory conservator powers.207 The pleadings in Jacobs v. Federal Housing Finance Agency208 and Perry Capital LLC v. Mnuchin209 appear to lack similar
[938 F.3d 585]
allegations. That factual difference distinguishes them.
But Saxton v. Federal Housing Finance Agency210 and Roberts v. Federal Housing Finance Agency211 had facts similar to the Shareholders' allegations here. So we recognize that our decision conflicts with at least some other circuits. The conflict is whether HERA authorized FHFA to adopt the Third Amendment. We think that, in interpreting HERA's conservatorship and receivership scheme, FHFA's general powers should not render specific ones meaningless. This is especially true because, although HERA qualifies traditional conservatorship, it does not eviscerate it. So traditional principles of insolvency and FIRREA decisions remain relevant. And they counsel against a near-limitless view of FHFA's conservator powers.
The complaint states a plausible claim that FHFA exceeded its statutory authority. Judge Haynes's dissent suggests that the Shareholders could waive the legal standard for reviewing the grant of a motion to dismiss. But the Supreme Court explained in Iqbal that "[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to `state a claim to relief that is plausible on its face.'"212 The standard is generally applicable, and we see no exception here. When we reverse the grant of a motion to dismiss, the district court may decide if fact issues require trial or if summary judgment should be granted.213 The proper remedy is to reverse the motion-to-dismiss denial and remand Count I for further proceedings."
From todays WSJ: "The red-hot housing market has achieved a number of milestones this past year. Perhaps the most telling is this: There are more real-estate agents than homes for sale in the U.S.
This phenomenon reflects both the extremely tight supply of homes on the market and how surging prices are persuading tens of thousands more Americans to try their hands at selling real estate.
The National Association of Realtors' membership count has exceeded the number of homes on the market only once before, in December 2019, when the number of agents dipped slightly but the inventory of homes for sale declined by more. It happened again last October and has held ever since.
At the end of January, there were 1.04 million homes for sale. That is down 26% from a year earlier and the lowest on record going back to 1982, according to the National Association of Realtors. Also in January, the NAR had 1.45 million members, up 4.8% from a year earlier."
"As before, we will just have to hope that the Supreme Court agrees with that ruling, rather than all the other judges who have said that the NWS was not ultra vires."
I can't recall any lower court that did such a thorough analysis as to whether or not the nws was outside the scope of Powers granted to the CONSERVATOR under HERA can you? The 5th Circuit EnBanc Panel ruling consisted of approximately 13 Judges with a combined 100 to 300+ years of legal experience. Judge Sweeney segregated the different hats the CONSERVATOR wears and labeled them FHFA-C and other designations depending on which shoes they were filing at the time of their actions. As I recall none of the other judges who decided that the nws was NOT ultra vires were more than a singular or at most 3 judge panel. Can you think of a ruling involving more than 1 judge that ruled that the nws was NOT ultra vires?
The 5th Circuit is traditionally one of the more conservative leaning Circuits in the country, but so too is the current make up of the SCOTUS. We'll likely know in less than 100 days and that will give us more clarity on the way forward.
"And how would such enrichment be a problem when HERA authorizes FHFA to act in its own interests?". Here's some of the relevant decision from the 5th Circuit EnBanc Panel ruling: "VI
We now consider Count I's substantive allegation that the net worth sweep exceeded FHFA's conservator powers. Like any federal agency, FHFA "literally has no power to act ... unless and until Congress confers power upon it."121 This principle is enshrined in statute: "The reviewing court shall ... hold unlawful and set aside agency action, findings, and conclusions found to be ... in excess of statutory jurisdiction, authority, or limitations ...."122 It is recognized in prominent Supreme Court decisions and implicit in countless others.123 The warning that "f
[938 F.3d 577]
we are to continue a government of limited powers, these agencies must themselves be regulated" remains as fresh as ever.124
A
To define FHFA's statutory authority, we "follow the cardinal rule that a statute is to be read as a whole, since the meaning of statutory language, plain or not, depends on context."125 Emphasis on isolated provisions at the expense of other, more applicable ones is "hyperliteral and contrary to common sense."126 As Learned Hand explained, "[w]ords are not pebbles in alien juxtaposition; they have only a communal existence."127 Our analysis proceeds in three parts: HERA's plain meaning, its past judicial interpretations (including FIRREA precedent), and insight from common-law conservatorship.
1
Under HERA's plain meaning, FHFA as conservator has limited, enumerated powers. To begin with, conservator and receiver are distinct and mutually exclusive roles. HERA says FHFA may "be appointed as conservator or receiver for the purpose of reorganizing, rehabilitating, or winding up the affairs of a regulated entity."128 In ordinary use, the word "or" is "almost always disjunctive, that is, the words it connects are to be given separate meanings."129 So FHFA may not occupy both roles simultaneously. To the same point, "[t]he appointment of the Agency as receiver ... shall immediately terminate any conservatorship."130 Similarly, the incidental powers provision authorizes FHFA to "exercise all powers and authorities specifically granted to conservators or receivers, respectively, under this section, and such incidental powers as shall be necessary to carry out such powers."131 In short, the FHFA Director may appoint the agency as either conservator or receiver, but once he does so, FHFA's powers depend on the role.
Some powers do overlap. HERA grants general powers to FHFA as either conservator or receiver. In either capacity, FHFA is a successor to the GSE.132 It succeeds to the GSE's and its stakeholders' "rights, titles, powers, and privileges... with respect to the regulated entity and [its] assets."133 Similarly, FHFA in either capacity has power to operate the
[938 F.3d 578]
GSE.134 This includes taking over its assets, operating its business, collecting obligations, performing its functions, preserving and conserving its assets and property, and entering contracts.135 The list goes on: In either role FHFA may transfer assets or liabilities136; cause other stakeholders to perform functions137; pay obligations138; issue subpoenas139; and exercise incidental powers.140
But that list has an end. Other powers depend on which role FHFA occupies. The statute enumerates FHFA's separate "[p]owers as conservator":
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.141
Then it enumerates "[a]dditional powers as receiver":
In any case in which the Agency is acting as receiver, the Agency shall place the regulated entity in liquidation and proceed to realize upon the assets of the regulated entity in such manner as the Agency deems appropriate, including through the sale of assets....142
The receiver powers also include organizing a successor enterprise143 and administering a detailed claim-processing scheme.144
The receiver powers stand in contrast to the conservator powers. As receiver, FHFA gains the power to liquidate the GSE and realize on its assets.145 It also gains the power to notice, review, and determine creditors' claims.146 A conservator does not have these powers. If it did, a conservator could liquidate the GSE's assets without following HERA's detailed claim-processing scheme.
The Agencies contend that the general powers to "operate the regulated entity" and "conduct all [its] business,"147 or "transfer or sell any asset or liability of the regulated entity in default,"148 authorize the net worth sweep. But if read so broadly, these provisions would obliterate the receivership claim-processing duties. If a conservator or receiver may enter any transaction as part of "operat[ing]" the GSE and "conduct[ing]" its business,149 there is no bar to circumventing HERA's creditor and shareholder protections.
That would raze the receiver's duties to notice and adjudicate claims.150 It would also be inconsistent with creditors' and shareholders' right to have their claims paid in receivership.151 So it cannot
[938 F.3d 579]
be a correct reading. "In construing a statute we are obliged to give effect, if possible, to every word Congress used."152 And "the canon against surplusage is strongest when an interpretation would render superfluous another part of the same statutory scheme."153
Rather than give the general powers their broadest possible meaning, we give them a meaning consistent with the separate conservator and receiver powers. A coherent interpretation of these provisions is not just reasonable, it is mandatory. In RadLAX, the Supreme Court held that when "a general authorization and a more limited, specific authorization exist side-by-side" in the same statute, "the particular enactment must be operative, and the general enactment must be taken to affect only such cases within its general language as are not within the provisions of the particular enactment."154 In this situation "[t]he general/specific canon ... avoids not contradiction but the superfluity of a specific provision that is swallowed by the general one."155 Other Supreme Court authority similarly warns against applying a general provision at the expense of more specific ones.156
Applying this to HERA, § 4617(b)(2)(D) enumerates the conservator's specific powers to "put the regulated entity in a sound and solvent condition," "carry on [its] business," and "preserve and conserve" its assets. The shared conservator-receiver powers are more general and would swallow the rest of the statute if interpreted broadly. So the more "particular enactment must be operative."157 "[M]ay means may" and "`may' is, of course, `permissive rather than obligatory.'"158 But here "may" is a grant of power that enables FHFA to act. FHFA as conservator may not exercise a power beyond the ones granted.159
The incidental-powers provision does not change this. It gives FHFA other powers "necessary to carry out" its enumerated ones.160 We doubt that Congress "in fashioning this intricate ... machinery, would thus hang one of the main gears on the tail pipe."161 Including near-unlimited conservatorship powers in this provision would swallow a large chunk of HERA.
[938 F.3d 580]
And incidental powers are those "necessary to carry out" the powers granted to "conservators or receivers, respectively."162 This links incidental powers to enumerated ones and recognizes the conservator-receiver distinction. In short, any exercise of an incidental power must serve an enumerated power.163 Beyond limited powers to "preserve and conserve" the GSEs' assets and property, FHFA would lack any intelligible principle to guide its discretion as conservator. This would permit essentially any action that could be characterized as "reorganizing" the GSEs and would eviscerate many pages of 12 U.S.C. § 4617.
The best-interests clause is also consistent with this reading. That clause, within the incidental-powers provision, authorizes FHFA to "take any action authorized by this section, which the Agency determines is in the best interests of the regulated entity or the Agency."164 Permitting the conservator to act in its own interest may appear to depart from the traditional view of a conservator as fiduciary. But the best-interests clause modifies FHFA's authority "as conservator or receiver,"165 and it only affects actions that are otherwise "authorized by this section."166 So FHFA may pursue its own interests only within the conservator's enumerated powers. It may not, for example, wind down a GSE and jettison receivership protections all in its own best interests. That would not be "authorized by this section." Instead, this clause is a modest addition to traditional conservatorship powers. It may permit related-party transactions that would otherwise be inconsistent with fiduciary duties.167"
They go on in the next two sections, here's the link:
https://www.leagle.com/decision/infco20190906087
Did you notice the quote from Judge Learned Hand? That's a REAL Judges name, would you name your kid, "Learned Hand"? Kinda catchy isn't it?
Before we continue speculation about the future of these investments we should see what the courts will do if anything, especially Collins. But you asked: "I don't know what your last statement is trying to say either. How did the conservatorship enrich FHFA itself? And how would such enrichment be a problem when HERA authorizes FHFA to act in its own interests?"
I'm just trying to point out that the nws is not something that a CONSERVATOR is allowed under law to do, it does not restore the enterprises nor is it rehabilitative, nor does it preserve and conserve assets as mandated under HERA. Furthermore, like Justice Breyer asked during orals arguments: "JUSTICE BREYER: No, no, I know that,
but what I wonder is can you -- is it fair to
characterize it not with this more legal
language but just saying, look, they
nationalized it, they gave the company away to
the Treasury. Who do you think the Treasury is?
It's the government of the United States.
MR. MOOPPAN: Right. And -- and what
I would --
JUSTICE BREYER: And, by the way,
you'll want to really look into this and you'll
discover they didn't get enough money for it,
they did it at too cheap a price, they did it
dot, dot, dot, and they paid us nothing. All
right. But can I view this as nationalization?
MR. MOOPPAN: No, Your Honor,
because --
JUSTICE BREYER: Because?
MR. MOOPPAN: -- because what the ---
the agreement does is it replaces a 20 billion
dollar a year dividend. So the enterprises..." then Hashim goes to his fall back discredited "death spiral" narrative.
So is it your position that HERA authorizes the FHFA to enrich itself at the expense of the conservatees?
HERA is an agency of the federal government. The nws enriches the federal government at the expense of the conservatees. It is illegal for a CONSERVATOR to enrich his principal at the expense of his conservatees.
I think the "may" benefit taxpayers argument has been ruled decisively by the courts as not overriding the Conservators duty under HERA to preserve and conserve their wards assets. While Hashim brought up the discredited "death spiral" argument he didn't resurrect the also discredited "may" versus "shall" argument.
If you believe that the HERA allows the FHFA to enrich itself at the expense of the gses I believe that is incorrect as that matter was debated in the 5th Circuit and found NOT to overrule the mandated "SHALL PRESERVE AND CONSERVE" duty of the FHFA as CONSERVATOR.
The intent of the federal government from 2008, from what we have learned was to Nationalize the gses NOT rehabilitate them. The 4th Amendment delays the profit sweeps and/or a 10% dividend on the LP. A Conservatorship is suppose to be temporary and not a profit maximizing venture for the conservator to enrich himself.
I'm pretty sure the DOJ is the federal government department that does the litigating here on behalf of and in coordination with the UST.
The UST is STILL sweeping their profits away, now it's just an iou called a Liquidation Preference until they reach the cap rule, then it reverts back to the cash dividend or a sweep of their profits directly into the coffers of the UST! Doesn't sound very rehabilitative to me and it's the exact opposite of conserve and preserve! I know we are tired of these shannagins, let's see if the SCOTUS provides some relief!
Amy Howe could probably shed some light on whether or not the DOJ letter was likely a SCOTUS inquiry or simply DOJ felt they had an obligation to notify the court about the 4th Amendment.
ROLG pointed out that standard operating procedure is you would open the letter saying, "In response to your inquiry as to whether or not the 4th Amendment gives the Collins Plaintiffs the relief they are seeking...", but that is absent isn't it?
Probably as the DOJ is going through the posture of all the litigation left over from the previous adminstration, DOJ may have felt compelled to update the court on the 4th Amendment since the case is about the 3rd Amendment.
The DOJ states that the nws is still alive and does NOT address the remedy the Collins Plaintiffs seek and therefore the case is NOT MOOT as a result of the 4th Amendment!
Politicians in both the Legislative and Executive branches of government are laser focused on getting votes and doing what they feel the electorate wants, as Navy has told us for years, it will likely be the courts that provide relief and do the right thing. The SCOTUS does not need to worry about upcoming elections and are uniquely positioned to fix this governmental fiasco.
The 1st question ACB asked David Thompson in the oral arguments, namely if we assume that the acting director DID NOT have at will removal protection and the confirmed director did, how would the court handle the 2014 and on confirmed director unconstitutional actions? It seems almost impossible and this is part of the how do you unscramble the egg problem:
JUSTICE BARRETT: Mr. Thompson, I want
to just make sure I understand the thrust of
your argument for structural error. Let's
assume that we think that the acting director
was removable at will, there was no
constitutional problem with the acting director.
And let's further imagine that the acting director is the one who was in charge for --
say, you know, up until six months ago, up until
last year, and then we had a confirmed director.
Does that mean that everything that
happened in the course of the Third Amendment is
then void as structurally invalid because, at
some point, a constitutionally invalid officer
entered the scene?
MR. THOMPSON: Well, Your Honor, if --
if it was an acting director and all -- all of
our arguments are rejected about 4512(f) as
well, and so that the Court concludes there was
no structural problem whatsoever at the agency
until just six months ago, certainly, we would
complain about the last six months' worth of
payments. But this is a -- it's been many years
that there's been a Senate-confirmed director.
JUSTICE BARRETT: No, no, no, no. I
understand that. I'm just trying to figure out
how much participation by the unconstitutional
officer matters, I mean, because, here, we
didn't have constant, 100 percent of the time,
control by a confirmed director. But you're
arguing, I mean, and -- and I'm saying let's
assume that we think the acting director posed no problem, if the Third Amendment was entered
into by the acting director with no
constitutional problem, you're still saying that
the participation of the confirmed director was
a structural error that invalidated the Third
Amendment and everything with it, correct?
MR. THOMPSON: Well, it cert --
certainly, it -- it -- it affected the
implementation, yes, Your Honor. That would
invalidate any implementation by that illegal
director -- illegally constituted director.
JUSTICE BARRETT: But only for those
periods. It wouldn't actually throw the whole
thing out, it would just invalidate those
actions taken by the confirmed director?
MR. THOMPSON: I -- I think that is a
fair point that the director can only be -- you
know, their actions can be invalidated -- you
know, the -- the director's actions that he took
could be invalidated but not his predecessor if
what his predecessor had done was totally
permissible.
JUSTICE BARRETT: And so we would then
have to parse through and figure out what was
done by the constitutionally problematic officer and what was fine because it was done by the
acting director?
MR. THOMPSON: Well, if -- and, again,
it's a big if -- if the Court concludes there's
no problem with 4512(f), then the Court would
want to look to see what did the director do,
and that stretches back to 2014, these
approvals.
JUSTICE BARRETT: And -- and let me
just -- I just want to be certain that I
understand what you're asking for. Are you
asking us to say if we agreed with you on the
whole thing you want an injunction ordering
Treasury to pay back the billions of dollars?
MR. THOMPSON: No -- no -- no, Your
Honor. So this is very important. We're
seeking two things. Number one, we're seeking
prospective relief so that in your hypothetical
the Senate-confirmed director would be enjoined
from making any future sweep dividend, approving
any future sweep dividend payment; and, number
two, we're asking to go back and have the
overpayments, over and above the 18.9 billion
dollars, to be treated as a pay-down of
principal. And that would essentially deem the government paid back."
There's no question that if EITHER CONGRESS OR THE CURRENT ADMINISTRATION NULLIFIES THE NWS IT COULD BE HUGELY UNPOPULAR POLITICALLY AND COST THEM VOTES! Maybe the aim of the Administration sending the DOJ letter was to encourage the SCOTUS (THE ONLY NONELECTABLE PEOPLE IN GOVERNMENT) to do what elected officials in the other two branches of the government want to do (i.e., the right thing!) but want zero risk of taking any possible political baggage from!
Maybe the DOJ thought that they had some type of duty to update the court as to the occurrence of the 4th Amendment as it has something to do with the case, or sometimes a Judge will ask a question for clarification, but usually they allow the other side to say something as well!
Nevertheless, the letter seems to indicate that the governments position is that the 4th Amendment DOES NOT MOOT THE COLLINS CASE! I think Dick Bove was of the opinion that SM had tried to somehow save the Government by no longer taking their profits in cash quarterly and instead in essence do an iou of the quarterly profits via the cumulative Liquidation Preference! (He threw it out there early on when we were trying to figure out what the hell the 4th Amendment was exactly!)
I don't see any flaws in your reasoning! Quite frankly it was very refreshing during orals to hear Justices Breyer and Sotomayor aggressively challenge the governments position. I think all 9 figured out what happened here, let's see if our prayer for relief is granted or if they will do some type of remedial dodge!
This is a kinda fun article: https://www.foxla.com/news/couple-buys-riverside-dream-home-but-seller-refuses-to-move-out-in-eviction-moratorium-loophole.amp