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Mnuchin didn't say that but the opposite: FnF still owe the SPS LP outstanding.
Thank your Director Thompson for taking the time to come to Tennessee and listen. You have heard the rationale for funding to increase supply and affordability. Lets be creative and monetize the GSE warrants to help with workforce housing. https://t.co/5dxoVIjsyu
— Tim Pagliara (@timpagliara) October 20, 2023
This is why the FHFA cannot overstep.
The threshold of CET1 > 2.5% of Adjusted Total Assets as of the Q3 2023 earnings reports, is the last one, if we want to make sense of this extended Conservatorship.
It allows the redemption of the JPS at their fair value of par value and FnF would meet Tier1 Capital > 2.5% of ATA afterwards (ERCF).
It'd be done by the conservator in order to skip the Redemption Dates with its Incidental Power.
The fair value might not coincide with its Redemption Value, for instance, in FNMFO, a $100,000 par value JPS that has a redemption price of $105,000.
I'd be better to call it stock buyback instead of Redemption, to avoid legal liabilities with their contract that talks about Redemption prices.
Mnuchin's 3% CET1 for the release was snubbed.
He overstepped.
The JPS will never dilute the commons since they are non-convertible stocks to begin with. Hello?
The CEO of Fannie Mae talked to you personally. Sure thing!
Off-topic.
The Initial Commitment Fee, comprised of the Warrant and $1B SPS, both issued for free, is barred in the Charter's Fee Limitation of the U.S., as you point out:
However, I remind you that we are here to legalize every action if possible, to avoid do-overs, knowing that the conservator has the Incidental Power: "Zing!" that allows it to twist or unwind everything that has been done.
Primarily because this is what they really had in mind (Separate Account. July 20, 2011 CFR 1237.12 for a follow-on plan: Recap. "It supplements"). For instance, the capital distributions that went through, despite being restricted, are applied towards the exceptions in the law/CFR (Reduce the SPS/Recap).
Something that can't be done with the Securities Law violations, for which we request a monetary settlement.
In this case, because both handouts are related to the Funding Commitment with SPS (don't call it "credit line" but "financing line of their operations" as per the Charter dynamics and as a last resort -Section Purposes-. Captured in the SPSPA with "upon Capital Deficiency", that is, upon negative Net Worth) and, taking into consideration that the 2nd UST backup of FnF in the Charter Act inserted by HERA, allows an infinite dividend rate on SPS, it can be argued that the Warrant and the initial $1B SPS were a higher compensation on the SPS and not an "entry fee", primarily because FnF are entitled to tap the UST for funds as a last resort, without any shame.
So, no "entry fees" necessary.
This allows them to remain outstanding. Then, when talking about whether they will be eventually executed or monetized:
-Both securities were issued for free and thus, their value was debited from the shareholders' pockets (Additional Paid-In Capital account), which reduced the Core Capital. A breach of the conservator's Rehab power. Then, all part of its "Zing!" power.
-The rates originally set forth in the UST backup of FnF subsection (c) in Fannie Mae, prevail. Estimated at a weighted-average 1.8% cumulative dividend rate on SPS until they were fully repaid, estimated in Dec 2013 and Dec 2014, respectively (Separate Account). Then, "Zing!".
-The Warrant was issued for free to skip the prerequisite (iii) on purchases in the UST's authority in the Charter Act: "to protect the taxpayer", that is, a collateral of its investment in SPS.
The trick to make the UST get a compensation worth a 79.9% stake in FnF, for only $0.00001 per share, either as "entry fee" or a higher yield on SPS, was declared "gross" and snubbed. Then, the security Warrant is considered to have been purchased at a $0 cost, in order to make this security be subject to the aforementioned prerequisite of "collateral".
-Let alone the Warrant prospectus clause 7: non-trasferable, that can be assigned (transferred) to any Person in the clause 2.1, because "the right the receive shares" that is what can be "assigned", is the security Warrant itself.
Two confronting clauses make it void to all effects.
Conservatorship preserves their status as private shareholder-owned companies.
So, there is no such thing as:
Make no mistake. Congress has no say on the Conservatorships of FnF. That is, their Core Capital stands at $268B; Common Equity = $236B; CET1 > 2.5% of Adjusted Total Assets, as of September 30, 2023, under the Separate Account in accordance with the law and basic Finance.
Congress is required for the release from Conservatorship. Very different.
Both are intertwined, because the release is related to the capital levels in FnF (prior MANDATORY release Undercapitalized in the FHEFSSA, when the Core Capital > minimum Leverage capital requirement, struck by HERA) and also in light of the FHFA-C's Rehab power, and the Treasury at the time saw an opportunity to attach it to a Privatized Housing Finance System endgame in the 2011 Report to Congress, when it was required by law to come out with "recommendations on ending the conservatorships".
From the beginning, it was all about removing their privileges that the enterprises and, thus, their Equity holders, enjoy ("FnF are NOT ordinary businesses", by the SCOTUS-appointed amicus), by winding down their Investments Portfolios with PLMBS funded with low cost bonds, thanks, in turn, to their UST backup: Winding down their Investments Portfolios 10% per year, established in the SPSPA. Soon it was changed to 15% per year, until a cap of $250B was reached. This cap was reduced further by Calabria to $225B as of end of 2022.
Also removing their "unfair advantages in capital standards" in the FHEFSSA (quote taken from the 2011 Report to Congress), for delivering below-market guarantee fees, as required in the Charter Act, etc.
All comes down to revoking their Charter with the most precious privilege: a UST backup of their operations as a last resort (either purchasing debt or Equity), expressly written in the section Purposes of congressionally-chartered private corporations, where is laid out their Public Mission that makes them take on more credit risk.
Therefore, we are waiting for Congress for the ultimate Housing Finance System revamp, because it affects FnF if Congress chooses so, otherwise they remain as is, regardless of the option chosen from the 2011 UST's 3 option plan for the release:
1- Privatized Housing Finance System + targeted assistance: FHA, USDA, VA.
2- 1 + Govt guarantee in crisis.
3- 1 + Govt Catastrophic-Loss reinsurance.
Congress might want deeper changes:
-Does it want FnF as public companies like today (the stocks publicly traded), or as private companies owned by stakeholders in Housing Finance, FHLB-style.
This is why FnF have fetched a CET1 > 2.5% of ATA, to get rid of the JPS (AT1 Capital). The "unwanted" Equity holders will be expelled, like occurred with the FHLBank membership in a 2016 Final Rule.
No one cares if the holders of the Non-cumulative dividend JPS are annoyed about the stock valuation 15 years later (fair value = par value), primarily because their dividend should have been resumed (fair value = par value) one year ago in Fannie Mae and two years ago in Freddie Mac (threshold: 25% of Capital Buffer. Table 8: Payout ratio), if they were promised the assault on FnF with anti-loss protection called "anti-dilution" by Bradford and back dividends with the Lamberth rebate, in comparison with a common stock. Each share class has its own stock valuation.
This extended conservatorship might be used to accumulate stocks presumably by the UST through a hedge fund, because of the 2009 deadline to buy securities of FnF. This is a sum-zero game and now the U.S. courts can't be used to make up for the losses for the dividend missed during 1 and 2 years, respectively, with the amount of damages accruing every day, while still trying the great assault on the ownership of FnF with the Govt theft story and the Trump card, which is what the Lamberth rebate looks like.
A shadow agreement between the parties.
Some of them, plaintiffs, will be hit with a penalty in Punitive Damages for a conspiracy in the U.S. courts.
-Chartering authority for the FHFA?
-Will FnF be combined?
-Will the Treasury take advantage of their current market price, taking them over at the stocks' fair value, knowing that only the government is allowed to buy them out at their BVPS (Common Equity per share) and also to sweep their current Deferred Income to itself, aiming to resell them later to bigger players in Housing Finance at an effective PER 14x? It's estimated that the Treasury could make a whopping $349B profit with this option ($151B cash refund due)
-Government Catastrophic-Loss Reinsurance or private?
-The current 10 bps guarantee fee (TCCA fee. Now BBB fee), funneled to Treasury quarterly will be cancelled in a Privatized Housing Finance System. But will it stay or the g-fee will be reduced 10 bps?
-Etc.
The redemption of the JPS is a corporate decision that should be made by the conservator using its Incidental Power, so it can skip their Redemption dates "in the best interests of the FHFA".
Compliance with TIER 1 Capital > 2.5% of ATA afterwards (ERCF)
Rep. Davidson (R-OH) attempted to supplant the law in force, just like Trump with his Presidential Memorandum for the release of FnF from conservatorship and the subsequent Housing Reform Plan in September 2019, where GS's Mnuchin attached China's sought-after Govt Explicit Guarantee on MBSs.
This has nothing to do with the Government Catastrophic-Loss Reinsurance in a Privatized Housing Finance System, option 3 out of the 3 options chosen by the Treasury for the release from Conservatorship in a 2011 Report to Congress, at the request of the Wall Street Reform and Consumer Protection Act (Dodd-Frank law).
At the time, the Treasury recommended guarantee fee increases to remove their advantages in capital standards (the so called Basel framework for capital requirements, now in place for FnF)
DeMarco began to work on it right away (May 2011)
UMBS, CSP,...
And the latest, their commingled securities unveiled on June 2022 for this Government Castastrophic-Loss Reinsurance (resecuritizations), suitable for private reinsurance as well (Source). We can read in the Freddie Mac press release that it was first priced at 50 bps because the FHFA was thinking of the China-sponsored plan submitted by Trump/Mnuchin, but just a few days later it was changed for 9.375 bps to reflect the Privatized Housing Finance System FnF were bound for.
This reinsurance was not meant to make FnF reinsure each other's UMBS as we can see today, with one using the UMBS of the other guarantor inside its own UMBS. A shameful attempt to syphon off revenues from Freddie Mac to Fannie Mae and make up for its losses in the sale of unvervalued assets to Goldman Sachs and Co.
This way, the CEO of Fannie Mae doesn't have to worry about competing with Freddie Mac, if the extortion of money from Freddie Mac goes on (Currently $105B, net, at 9.375 bps), as shown in the data of monthly volume in Fannie Mae with two consecutive months of month-on-month declines, versus the strong growth posted by Freddie Mac. This is because these Resecuritizations don't appear in their Guarantee Portfolios.
Obviously the commingled securities are meant to bring in private capital in the Guaranty Mortgage Securitization Market, to help new guarantors sell their products, at least initially.
We have other examples of attempt to supplant the law in force, like recently the representative from Tennessee, Mr. Ogles, introducing in Congress this bill:
Rep.Davidson again asks UST for a report to Congress due Sept 2021, required by Mnuchin/Calabria (Jan 2021 SPSPA amndt)
— Conservatives against Trump (@CarlosVignote) February 8, 2024
"A statutory requirement...The law"(False)
The report for the release was submitted on Feb2011, at the request of the Dodd-Frank law.#Fanniegate @TheJusticeDept https://t.co/VU9tmWGRGx pic.twitter.com/izcTR4YYCE
CRTs: Continuing the idea that UST hasn't purchased even one security, to skip the prerequisite "to protect the taxpayer" for the Warrant (collateral), none SPS purchased to skip the 2009 deadline and, if that's the case, the securities STACR and CAC (CRTs), issued by Freddie Mac and Fannie Mae, respectively, "to protect the taxpayer" claimed by Sandra Thompson, haven't been purchased either to skip this deadline (besides the lie of protecting from losses)
Have you submitted a Plan of Share Appreciation?
Credit Risk Transfers are illegal in the Charter Act.
It's not a question whether they are high or low or whether they make economic sense. They are huge by the way, as they represent 10 bps guarantee fee income out of 60 bps, and no sense during the Transition Period to build capital and with the Stress Tests.
They are illegal in the Charter Act, in the Credit Enhancement clause.
The authority of the conservator isn't to create a shadow Housing Finance System, in parallel to the one currently in force, Charter Act, that is being violated as a result, even if it's "in the best interests of the FHFA". The FHFA must uphold the law and the accounting principles.
HERA didn't turn the FHFA into an outlaw Federal Agency, as the hedge fund managers stuck to Fanniegate made us believe.
If it's money funneled to UST, then barred in the Fee Limitation clause too.
This is the most likely scenario, due to the slogan of Mnuchin "the taxpayer be adequately compensated", which can only occur in a different Charter.
A slogan repeated by the other Goldman Sachs alumni, Sandra Thompson, in her nomination hearing in the Senate. Coincidence?
Also, Sandra Thompson can't claim that it "protects the taxpayer" because the UST doesn't bear credit risk in FnF, nor "the SPS are taxpayer's losses" (UBS's Hensarling's remark, former financial committee chairman) but obligations issued by FnF. Primarily because the securities "to (iii) protect the taxpayer" (one of the 3 prerequisites on the purchase in the UST's authority) had a deadline on the purchase of December 31, 2009. Let alone that FnF sell the securities STACR and CAS, the don't buy securities.
You may say that, this is precisely why the deadline doesn't apply. Then, back to square one with the securities barred in the Credit Enhancement clause.
Called "responsible innovation" by Mel Watt (Source), a tell-tale sign of a scam. Notice that the unbacked token bitcoin, was called safe innovation by lawmakers, a sign that they are always instructed by bigger players.
Likewise, it isn't a coincidence that the CRT were promoted through annual CRT Symposiums attended by Blackrock and the former UST counselor, Craig Phillips, in turn, former BLK and MS (sued by the FHFA for the sale of fraudulent PLMBSs to FnF), and soon after, the Bitcoin symposiums began to run.
HERA didn't authorize CRTs with FnF in either of its patches inserted in the FHEFSSA or in the Charter Act. It only authorized the UST to do CRTs with its portion (35% to the Capital Magnet Fund) of the funds that FnF allocate to two Affordable Housing Trusts managed by the UST and HUD (4.2 bps on new acquisitions in total)
The amount of CRT expenses, net (turned into Retained Earnings, which is how FnF are protected against future losses. Currently an adjusted $-216B Accumulated Deficit Retained Earnings accounts. What the Capital ratios are for) requested as refund, stands at $18B as of September 30, 2023 ($9B each)
That "overdue report" was submitted to Congress on February 2011, at the request of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Rep. Davidson was referring to a report required by Goldman Sachs' Mnuchin at the UST and Calabria, in the flawed January 14, 2021 SPSPA amendment: "Capital Reserve End Date", etc. Adjusted Capital Reserve= $0, and an invalid capital metric in FnF.
Obviously an attempt to supplant the prior mandate by law for the release from Conservatorship: a 3-option Privatized Housing Finance System revamp. Increase the guarantee fees, etc. Wind down their Investment Portfolios (Charter-barred PLMBSs) funded with low cost bonds thanks to the UST backup of FnF, etc.
A showdown Congress versus FHFA and UST is brewing.
SHOWDOWN
— Conservatives against Trump (@CarlosVignote) February 6, 2024
Rogue UST didn't purchase even 1 security to skip the prerequisite in its 2nd authority(Charter Act)
1-Warrant to(iii)protect the taxpayer(collateral)
2-SPS under(i)(ii):It dodged the Dec2009 deadline.
FnF aren't ordinary businesses(UST backup)#Fanniegate @TheJusticeDept https://t.co/kPMDg1PU9o pic.twitter.com/soUCur44KI
The Supreme Court started out with "Rehabilitate FnF" in the interpretation of the FHFA-C's Incidental Power and it's the part where the prior ruling by judge Willett (5th Cir.) over the same case, asserted that, what is set forth in the law: "any action authorized by this section", are actions "within the enumerated powers",
Don't go far away because it's precisely the FHFA-C's Power that we call "Rehab": "Put (restore) FnF in a sound condition" ("...and solvent condition", related to the ability to pay down debentures, that can be used for the reduction of SPS, a debenture with the taxpayer)
When we are talking about the financial condition of a financial company and, specifically, FnF, soundness is measured in their Balance Sheets at a determined date (picture of a company) with the FHEFSSA capital requirements, numbers outlined later in the ERCF tables (February 16, 2021. Image below. The statutory Minimum Capital Level and capital shortfall, have been posted every quarter in their Earnings reports since day one, with the old 0.45% of MBS Trusts. Now, 2.5%. Regulatory Risk). It's not "sound operations" or "safe operations" because that's the FHFA-R's duty:
What part of "FHFA, an independent agency of the Federal Government" don't you understand?
It hasn't changed with Collins and the SCOTUS that simply struck the "for cause" removal restriction, but nothing about this screenshot.
Then, your
Bradford, a conservator has fiduciary duties other than act in the best interests of the Equity holders, which, by the way, doesn't mean to act against us.
FHFA is acting on our behalf when our Rights and Powers were transferred in the Succession Provision (momentarily) and necessary to carry out its statutory goals. Fiduciary duties emerge and they are owed to us, as always that someone acts on behalf of other.
Judge Sweeney said "fiduciary duty", when it's in plural form "duties", because there are others: loyalty, duty of care, etc.
For instance, Duty of Care might well be set forth in the FHFA-C's Incidental Power, when it states that any action must be "authorized by this section" (certified mail sent to judge Sweeney). These 4 words were omitted by judge Sweeney, a former DOJ employee.
We are dealing with Federal Agencies owned by the banks and hedge funds.
A Conservatorship isn't a temporary Receivership.
Glen Bradford also asserts firmly (fallacies):
1- "spspa conversion", intead of SPS, to pass the 4th SPS certificate amendment off as the 4th SPSPA amendment, in order to get involved secretary Yellen in the flawed January 14th, 2021 SPSPA amendment: "Capital Reserve End Date", 12 days before she was sworn in. Etc.
2- "Anti-dilution protection" in the Non-Convertible JPS, when it's only in the Convertible FNMFO and it isn't anti-loss protection. Besides, he doesn't get that the JPS would be wiped out with the current Balance Sheet (only $118B Net Worth, but $310B SPS outstanding). He wants to apply the "Mnuchin Rule": conversion of SPS and JPS with the same haircut, Mnuchin said so according to Calabria's book. So, we don't even have evidence that he said so.
3- "SPS LP increased for free, are off-balance sheet". False, these gifted SPS LP and its offset (reduction of Retained Earnings account) must show up on the balance sheet. Financial Statement fraud.
4- "SCOTUS said that FHFA can do whatever the hell it wants", when, in reality, it put the premise of "rehabilitation of FnF" that, in a financial company, it's related to Basel framework and also, pursuant to the FHEFSSA capital requirements, a 1992 law enacted exclusively for the soundness of FnF (capital adequacy matters) still in force.
5- "FnF continue to build capital", when the regulatory capital built is wiped out with the offset mentioned. Zero regulatory capital built. FnF build SPS (capital stock).
6- "Capital Reserve = $118 billion", when it's $0 adjusted for the offset when the SPS LP was increased for free (without getting the corresponding cash) in $118B. An invalid capital metric both in the FHEFSSA and under the Basel framework FnF are bound to (Capital Rule effective February 16, 2021), besides the 2011 UST Privatized Housing Finance System revamp, UST chose for the release from Conservatorship, at the request of the Dodd-Frank law.
The last three points, also mentioned by Bill Ackman (for the first point, implying that SCOTUS said FHFA has absolute discretion, in the Pershing slides)
Which makes me wonder, do you happen to know him? Are you being instructed by him as to what to say on Twitter, SA and Ihub?
Is he attempting to negotiate on our behalf, repeating the same lies that you are posting here daily?
Is he another "Fanniegate hero" as you self-proclaim?
The shareholders are being conned.
Unavailable Earnings for distribution as dividend (*)out of Accumulated Deficit Retained Earnings accounts.
A Balance Sheet is a picture of a company at a determined date.
Although a RE account can be negative and still be used to debit losses from, for the distribution of Earnings it's common sense that, at least, it needs to have a positive balance in the company for its distribution.
More evidence that they weren't actual dividends, but a Separate Account, thanks to the FHFA-C's Incidental Power.
For instance, FNMFO is a series of Convertible JPS with a par value of $100,000 per share.
Instead of Fannie Mae deciding a redemption at a redemption price of $105,000 per share, according to the prospectus, their holders decide to convert to FNMA, and, assuming that there is no other conversion of JPS/SPS or the Warrant exercised (then, same common shares outstanding as today), that would activate its anti-dilution protection provision, the conversion ratio is the one established when it was issued: 1,060.3329 common shares per each FNMFO held.
If it's done today, each $100,000 FNMFO would be converted into $1,424, calculated with Friday's price of $1.33 x1,060.3329 common shares.
Obviously, their holders won't request a conversion and they will wait for Fannie Mae to announce a redemption.
Anti-dilution isn't Anti-loss protection. ROFL.
As commented before, although the prospectus talks about adjusting the Conversion Price, the anti-dilution is about adjusting the Conversion rate.
You can't adjust for changes in price in the common stocks.
The underwriters of this IPO should be investigated.
Let me guess, JPM's Jamie Dimon.
Plaintiff hired by Pagliara to repeat "repurchase of Warrant", AIG-style.
FnF are NOT ordinary businesses.
Guido was in charge of this role before.
A security authorized only to (iii) protect the taxpayer, obviously protection from losses (Source). In this world that's called collateral. A guaranty for the repayment of a debenture. Obligations in respect of Capital Stock -SPS-, a debenture with the taxpayer that had to be paid back asap, which is what was done under the guise of dividend payments (Restricted and unavailable Earnings for distribution as dividend while undercapitalized by law and then, threshold of 25% of Capital Buffer by regulation -Table 8 of the Capital Rule: Payout ratio-)
There are ONLY 3 prerequisites in the Authorization of Treasury to Purchase Securities of FnF, after the determination of EMERGENCY: Conservatorship, pursuant to (G) manufactured LOSSES: likely to incur losses that deplete all of its capital. About future losses, not past losses like this plaintiff repeats, echoing Washington Federal's lawsuit.
Losses incurred with the Obama's programs (flawed Incurred Loss accounting standard), when FnF had to set aside a reserve equal to the concession granted to borrowers in modified loans; the 10% dividend either depleted capital or it directly caused the losses and subsequent draws from UST (SPS); the DTA valuation allowance; initial $1B SPS issued for free that reduced $1B the Core Capital -Additional Paid-In Capital account-, barred in the FHFA-C's Rehab power). All legal, but let's say that there was a problem of attitude.
The Warrant was issued for free (its value was debited from the Additional Paid-In Capital account -Core Capital- like any other security issued/increased for free. Breach of the FHFA-C's Rehab power) to evade this prerequisite on PURCHASES, as a kind of "entry fee" for a funding commitment that is an essential part of the Charter dynamics since the Charter's inception. So, don't tell me that FnF have to pay an "entry fee" for the funding commitment they are entitled to, as a last resort to fund its operations (section Purposes), better known as UST backup of FnF.
This UST backup is the reason why FnF get funds on the market just a few basis points above the Treasury yields, and not due to the big lie of "Govt Implicit Guarantee on MBS" or due to a machiavellian Conservatorship, where ST claims that now the MBS have an Explicit guarantee from the Treasury. More fallacies, because their MBS are now fully guaranteed by FnF as always.
Besides, the Warrant was meant for the assault on the ownership by Wall Street.
Clause 2.1 in the prospectus:
Finally, what's the point in repeating the Charter's Fee Limitation of the United States, if later you don't see it refers to a collateral too.
BOTTOM LINE
The U.S. Treasury should be taught the lesson of its role in congressionally-chartered private corporations with a clear Public Mission that makes them increase their risk (section Purposes: charge less to low- and moderate- income families, countercyclical role in the secondary market during a financial crisis -2008, not COVID crisis- and Duty to Serve), different to the FHLBanks' Charter, otherwise there will always be a Goldman Sachs alumni out there scheming plans of deception, that will be hired by the Administration for a con operation.
The compensation to UST was assessed at a weighted average 1.8% cumulative dividend rate on SPS (applying a 0.5% spread over Treasuries. It was a 0.299% spread in the bailout of the FHLBanks by Congress in 1989 -GAO report-), netted out with the interests on $151 billion owed to FnF, as per the original subsection (c) any obligation of (b) redeemable obligations (such as SPS), in the Charter Act.
FNMFO is a CONVERTIBLE preferred stock, unlike all others Non-Convertible preferred stocks outstanding, according to its Prospectus (contract).
Although the entire prospectus uses as reference the concept of "Conversion Price" fixed at $94.31 at the time of issuance, I guess that this is a typo and what is fixed is the "Conversion Rate" into FNMA at 1,060.3329. Then, it states that it's adjusted for the common stocks outstanding at the time (anti-dilution), thinking of the resulting stake in Common Stock after the conversion.
This is why Glen Bradford talks about anti-dilution of his JPS to fool us. It relates to dilution in the resulting stake in Common Stock, not that they can't be diluted in price (losses) and, secondly, this term doesn't exist in a non-convertible JPS, because they have never had a conversion rate as reference and subsequent possible stake in Common Stock. So, they can never have anti-dilution adjustments.
The plotters want to, first of all, make up a conversion rate when there is none, and then, anti-dilution adjustment for themselves but referring to "anti-loss protection", after leaving the Fanniegate scandal in a case of "Equity restructuring", where no SPS has been repaid, more SPS are issued as if by magic every quarter and there is still the Warrant outstanding.
What I see is a negotiation of the hedge funds and bankers, holders of Non-Convertible JPS, with the U.S. Treasury that holds SPS and the Warrant, aiming to share the booty.
Both parties use the Judiciary to bless their unlawful actions.
Finally, there was another Convertible JPS called FANIP, that had MANDATORY conversion into FNMA at 1.8182 (Conversion Rate) on May 13, 2011, "subject to anti-dilution adjustments in certain circumstances", according to a Fannie Mae press release at the time, such as the Warrant, evidence that the Treasury determined in 2011, that the Warrant will NEVER be exercised, otherwise FANIP's conversion rate should have been adjusted.
I can't check out this "anti-dilution" provision because Fannie Mae has removed the prospectus from its website, but a comparison with FNMFO reveals what it is about.
Remember: Regulatory Risk and stock valuation. Non-negotiable.
It seems that you've made up a quote from Sandra Thompson "when asked about the plan for exit from the Government Conservatorships":
“We would defer to Congress on the exit for the GSEs,” Sandra Thompson, acting director and nominee to permanently head @FHFA.
— National Mortgage News (@NatMortgageNews) January 22, 2022
By @bcynic https://t.co/caKktHDj3v
CONGRESS-FHFA SHOWDOWN
— Conservatives against Trump (@CarlosVignote) January 25, 2024
The UST's authority chose a Housing Fin.Sys revamp for the release,but FHFA overstepped:
-Asking for🆕Charter authority
-JPS,unwanted(CET1>2.5%)
-Merger FnF: FNMA's HQ lease cut short "if it's significantly changed"
-Lamberth:Back divs+Atty fees.#Fanniegate https://t.co/kqzxVXFd3X pic.twitter.com/4uTotg7AOP
(*)Core Capital >2.5% of MBS Trusts versus 0.45% before.
This threshold for the Total Assets, is the prior MANDATORY release Undercapitalized in the FHEFSSA, struck by Calabria/Pelosi's HERA.
That's called Regulatory Risk.
Core Capital is similar to Tier 1 Capital.
As of September 30, 2023, FnF fetched CET1 > 2.5% of Adjusted Total Assets.
It means that the JPS can be redeemed. Then, Tier 1 Capital > 2.5% of ATA (ERCF) again.
Not only the FHFA wanted to get rid of the JPS (AT1 Capital) before Congress chooses one of the 3 options for the Privatized Housing Finance System revamp, that the Treasury came up with in 2011 for the release, but also, if the Separate Account would have been unveiled when the real threshold was met, the JPS couldn't have been redeemed at their par value yet, as the threshold that marks the resumption of dividend payments wouldn't have been met yet (25% of Capital Buffers).
Even when the latter was met (chart), FHFA snubbed it because it didn't want the JPS lingering in the capital structure trading at their par value, and it went all the way to CET1 > 2.5% of ATA to redeem them.
This is the famous expulsion of the unwanted shareholders it already carried out with the FHLB membership in a 2016 Final Rule, that was first proposed in 2010. They were hedge funds unrelated to Housing Finance, that used insurers to have access to the FHLB low cost funding. FHFA called them "captives" and expelled.
This is essential if we are waiting for Congress to announce a Privatized Housing Finance System revamp for the release of FnF.
Now, FHFA wants the JPS to get the missed dividend payments (estimated 1 year in Fannie Mae, 2 years in Freddie Mac), and that's the reason of the Lamberth rebate.
The FHFA also wants its attorney-mercenaries to get paid for stock price manipulation, using part of the Lamberth rebate. Likely, claiming that it's "an outstanding obligation to be honored", like the dividend declared but not paid in Fannie Mae on day one of Conservatorship.
Phony damage and illegal Class Action, the plotters will have to pay the Equity holders $4.8B in Punitive Damages, along with the rest of the gang.
FHFA provides the definition of Common Equity.
Common Equity TIER 1 capital = Common Equity TIER 1 capital elements + regulatory adjustments.
12 CFR 1240.20(b)
The Common Equity TIER 1 capital elements are:
+Common stock par value, less Treasury Stock (stock buybacks)
+Paid-In Capital
+Retained Earnings account
+AOCI
kthaput19 repeats
Quit asking for
A conservatorship isn't an "administrative bankruptcy", stated by the ambitious Mark Calabria, who had the conviction that he doesn't like private shareholders benefiting from a UST backup of congressionally-chartered private corporations.
Bankruptcy is for debt restructurings.
Conservatorship is meant for the financial rehabilitation of enterprises. This is why the management and BOD is expelled and it's appointed a conservator in their place, who needs the rights and powers from the shareholders as well, to carry out its statutory mission, otherwise they would oppose to every action, ASMs, etc.
This is why there is a MANDATORY release Undercapitalized (Core Capital > Minimum Leverage Capital requirement). It can't overstep.
Calabria struck this MANDATORY release in the FHEFSSA with HERA.
It doesn't mean that, all of a sudden, now a Conservatorship is a state to induce bankruptcy or Receivership, 15 years into a Machiavellian plan of deception, because the key 2 points in the prior FHEFSSA conservatorship prevail, so don't think about repealing HERA and return to the prior FHEFSSA:
-Capital Restoration Plan.
-Restriction on Capital Distribution.
Today's FHEFSSA conservatorship, as amended by HERA, states the same in the conservator's Rehab Power: "Put FnF in a sound and solvent condition", when "soundness" is related to building regulatory capital,
Regarding the Restriction on Capital Distribution, HERA placed it at the end of the section Capital Classifications of the FHEFSSA, and it applies "IN GENERAL" when FnF are undercapitalized. Let alone in a Conservatorship for Critically Undercapitalized enterprises.
Calabria wanted the companies in Receivership in 2008. This is why he came up with a Final Rule entitled "Resolution Planning" in mid 2021, which is "Receivership scheming". Such a bad taste during a Deceivership.
Our enemy pro se plaintiff Joshua Angel, a JPS holder, continues his bad performance in the U.S. courts, requesting on Wednesday permission to amend his 4th complaint in the DC courts, navycmdr posted on Twitter.
An attorney chosen also for the Madoff case aiming to spin undervalued assets off to his gang. It can't be just a coincidence.
And who, in this board, pretends to defend the shareholders, asking now for debt forgiveness Argentina-style, so he can sneak a 10% dividend in a negotiation, where dividends are called "interests" to skip the Restriction on Capital Distributions, and calling it "contractual rate". It turns out that it's as "contractual" as the NWS dividend. Duh!. A negotiation controversial attorney Bryndon Fisher-style.
This is why kthomp19 brought up on Wednesday the themes of "administrative bankruptcy" by Calabria and the "legacy shareholders" by Pagliara.
We are dealing with an organized group.
The plaintiff Joshua Angel has to call the NWS dividend "NWS", because dividends are restricted and, because we cannot undo what's already been done, it's applied towards the exceptions to this restriction to legalize it, thanks to the FHFA-C's Incidental Power that authorizes this plan of deception. The same with the 10% dividend (Restricted and unavailable earnings for distribution as dividends).
"HERA" instead of the "FHEFSSA", so other provisions are concealed. For instance, that the capital requirements are met with Core Capital, currently adjusted $-194B, not with "Capital Reserve", which is an adjusted $0 by the way.
A negotiation cattle market-style, where no rule has existed before, as we can read in his daily comments on Ihub with his 20+ aliases.
Attempt to conceal the reality of the Separate Account plan, with assessments sent to Treasury under the guise of dividend payments, in accordance with the law, rules and basic finance.
The key: the original low cost financing of the operations by the Treasury (both debt and Equity), as a last resort (image below), in the Charter Act, prevails.
With CET1 > 2.5% of Adjusted Total Assets as of September 30, 2023, now the Charters can be revoked and Calabria's wish comes true.
Complying with the Fee Limitation of the United States in the Charter Act, that Calabria also conveniently forgot.
I thought that the rogue kthomp19 was "kthaput19" after being called out for attempting to mislead this board, stating that the statutory Restriction on Capital Distributions doesn't apply, because it says that it's for enterprises "classified Undercapitalized", when it states "undercapitalized" in general, and it starts with: "IN GENERAL". Source.
First of all, this rogue attorney doesn't understand that this restriction is a Prompt Corrective Action to rehabilitate a financial company. That is, to build capital. A financial concept. It was explained by the FHFA in the famous Final Rule of July 20, 2011 in relation to a response to the payment of Securities Litigation judgements, now in the Lamberth court, but it can be extended as an explanation of all the Conservatorship. Source.
Section in HERA that amended the FHEFSSA in question:
Unlike a different FHEFSSA restriction on capital distribution (an expense unrelated to the normal business of FnF) with the 4.2 bps sent to UST/HUD's Affordable Housing trusts, where it states "classified undercapitalized" (Source) and now, there aren't Capital Classifications. The reason why FHFA's Mel Watt lifted the suspension in December 2014, presumably when he declared FnF in solvent condition, complying with one of his statutory goals as conservator (Put FnF in a sound -capital- and solvent -debenture SPS- condition), and also, it's assumed that it was satisfied another specific exception to its restriction: "it wouldn't contribute to the financial instability of FnF", at a time when it's estimated that the laggard Fannie Mae ended the reduction of the SPS in full, in turn, pursuant to the exception (reduce the SPS) the different general Restriction on Capital Distributions mentioned before (Dividends, today's SPS LP increased for free and the Lamberth rebate)
It's estimated that Freddie Mac repaid its SPS one year earlier (watch my signature image below).
Therefore, the rogue attorney Kthomp19 lied about this general Restriction on Capital Distributions, mixing it up with the specific one on the 4.2bps.
The one in question is for undercapitalized enterprises, like today that "FnF remain undercapitalized" (Sandra Thompson). The grounds for a Separate Account.
Let alone his: "The SCOTUS authorized the NWS dividend" (knowing that the 2nd UST backup of FnF authorizes an infinite dividend rate on SPS), without pointing out that it also stated that it must "rehabilitate FnF", which means that, in reality, it authorized a Separate Account plan for the extortion of the enterprises in the meantime, that is what is rehabilitating FnF for real (Regulatory and statutory capital metrics; On the balance sheet, not "off-balance sheet" which, if any -MBS Trusts-, is consolidated on the balance sheet).
Yet on Wednesday, he started the "legacy shareholders" diatribe, a concept that doesn't exist, neither as financial term nor as legal term, the reason why all the members of the gang repeated it yesterday, at least ten times, seeking the "treat the stocks" peddled by Pagliara & Co: "Thanks for sharing", "Everyone must win", etc.. That is, all made up in a cattle market-style negotiation with the government.
Everyone will get what is entitled to according to the specifications of the security they bought. That is, stock valuation.
It's always "existing shareholders" in any event.
Plotters' invalid term "legacy shareholders" aims to pitch an invalid idea of stocks treated🆚stock valuation,OK'd w/ ST:"I defer to Congress"🆚prior "work w/ Congress".
— Conservatives against Trump (@CarlosVignote) February 1, 2024
It's "existing shareholder", awaiting the return of Powers/Rights in use by FHFA-C as I write this.#Fanniegate pic.twitter.com/CxJrd5vBvb
That 'European' is Glen Bradford, alias "European farmer LuLeVan".
FNMA posts 2 consecutive monthly volume declines. FMCC, winning!
Annualized month-on-month growth in November and December:
Fannie Mae: -0.4% and almost flat.
Freddie Mac: +2.4% and +3.1%.
This slams all those in Wall Street promoting the idea of a combined FnF (Goldman Sachs, GS alumni Sandra Thompson with the FNMA HQ lease contract terminated this month, 5 years before the deadline "if it's significantly changed", the media published at the time it was signed, etc.)
It's been proven that there is a benefit from the competition between FnF.
This is because Fannie Mae found a new revenue stream with the extortion of money from Freddie Mac, under the guise of normal operations, with the commingled securities. A catastrophic-loss reinsurance that Freddie Mac is being forced to buy in order to sell its products, when there is no need. Latest: $105 billion, net, at 9.375 bps.
These "resecuritizations" unveiled by Freddie Mac in June 2022, are meant to bring in private capital in the Guaranty Mortgage Securitization business, helping them to sell their products (UMBSs) and compete with FnF on a level playing field.
It could be a Govt Catastrophic-Loss Reinsurance for the option 3 in the UST Privatized Housing Finance System revamp, chosen for the release from Conservatorship in 2011. Or private reinsurance for the options 1 and 2.
More ways to spin funds off to one company of the gang: now Fannie Mae. That's why the "deregulation segment in Fannie Mae", promoted by Goldman Sachs commented before, that secures good deals for them (sale of undervalued assets), and later this revenue stream makes up for the losses.
Other examples: CRTs, Bitcoin scam, IMF-Argentina spree,...
Goldman Sachs doesn't get that our only category is:
NOT ORDINARY BUSINESSES.
Supreme Court-appointed amicus:
With "de-regulation (sic) category", Goldman Sachs covers everything up, beginning with the 2011 UST Privatized Housing Finance System endgame (guarantee fee increases, Basel framework,...), chosen for the release from Conservatorship, at the request of the Dodd-Frank law. A Report to Congress.
Then, the FHEFSSA capital metrics, as seen also in the BTIG report, a subsidiary of Goldman Sachs, commented yesterday. Etc.
This is why GS now comes out with "easing the Capital Rule" stance.
A two-pronged attack. Or one attack if it's the same conglomerate.
The problem isn't "deregulation", because today's Basel framework for capital requirements is an international standard, but the current adjusted $-194 billion Core Capital together.
The reason why there is a 20% Risk Weight floor to calculate the Risk-Based Capital requirement, which is the only addition by regulation albeit authorized by Basel rules, is because of the "Capital covers unexpected losses" that BTIG said it all wrong (commented as well), because it leads to a capital level for the long haul, and not subject to the current pristine portfolios in FnF, with an average Current LTV of 58%.
For that, there is a different analysis called Stress Test, published annually and required by the Dodd-Frank law.
Anyway, there is also a Minimum Leverage capital requirement higher than the Risk-Based Capital requirement. So, no matter how low the latter is (deregulation), the binding capital is still the Leverage ratio (Core Capital > 2.5% of Adjusted Total Assets).
This is why Howard only complains about the Risk-Based Capital requirement and conceals the other, pretending that it doesn't exist, so the problem of FnF now is only "deregulation", instead of the real problem which is a Separate Account plan and that $420B of core capital generated during Conservatorship is currently missing on their adjusted Balance Sheets.
Timothy Howard is behind this attack by Goldman Sachs/BTIG for sure.
Hand-in-hand with the plaintiff Joshua Angel entertaining the shareholders on the Ihub message board with his deranged posts using 20+ aliases, that make our heads spin.
A phone call from the DOJ will clear things up.
Now, GS forms part of the pot liable for $4.8 billion in Punitive damages as compensation to the Equity holders, along with all others that have written the government theft story in formal documents: Moelis and sponsors, Ackman, Howard, Pagliara, the plaintiffs, etc.
Collusion.
Rodney/Barron +20, is the plaintiff J.Angel writing flawed analyses.
I already warned the board that his objective is to tarnish the image of other posters that might be posting valid analyses and also, to make our heads spin.
Which is what you are attempting too, in your reply to him, so that only the frivolous lawsuits that have been filed so far, are valid.
FnF forced to issue Warrant @0.00001ps for profit? GROSS!
It wouldn't make it to a movie. Get a grip.
Shameful attempt to distort the Separate Account plan by the rogue plaintiff Joshua Angel, with one of his 20+ aliases on this board.
- Is it "NWS" or NWS dividend?
- Is it "interests" or dividends?
- Is it "HERA" or the FHEFSSA?
- Is the exception to the Restriction on Capital Distribution in the law "a refinancing option", or it simply requires to raise cash in the same amount of SPS reduction, which was satisfied when the Common Equity was increased at the same time? By the way, the same scheme in the Federal Reserve with their fraudulent Deferred Asset that substitutes the SPS: it's reduced as the Retained Earnings increases, so the remittances to Treasury can resume. What FnF have done with the SPS under the Separate Account plan (watch my signature image below with Freddie Mac)
In the end, what the gang attempts is what the controversial Bryndon Fisher already pointed out: "What if the NWS dividend hadn't existed?", as a way to pitch the payment of a 10% dividend. He still doesn't get that it's restricted too and the same breach of the FHFA-C's Rehab power, when rehab means to build regulatory capital in this world (soundness).
The NWS dividend existed, and you can't undo what's already been done.
The reality is that no actual dividend was ever paid to Treasury, with unavailable earnings for distribution as dividend, out of an Accumulated Deficit Retained Earnings account, and a capital distribution restricted. The exceptions in the law/CFR kicked off.
They were assessments sent to Treasury, misleading about it under the FHFA's Incidental Power: "Zing!".
Similar to the FHLB's Separate Account in 1989 by law, because now it's been extended for the Recapitalization.
Likewise, the paid shills yesterday with: "What if HERA hadn't existed?"
It's been an exceptional exercise of rulemaking to commit fraud with the enterprises and their Equity holders.
2008 HERA isn't to blame when it's been active rulemaking to the same end, with the July 20, 2011 CFR 1237.12 by DeMarco, that enabled the continuation of the Separate Account with capital distributions (deplete capital) for their Recapitalization (build capital), for the moment that the prior exception in the law, repaid the SPS in full.
And Trump and Mel Watt actively seeking all that is prohibited as well, to continue the plan of deception: the dividends stopped. Instead, SPS increased for free, which is the same. Another capital distribution number (1): a compensation with stocks, other than stock dividends. RESTRICTED. Then, another way to hold the Common Equity in escrow to legalize this payment.
Playing the fool is an aggravating circumstance when assessing the penalties for Punitive damages: "Mandatory dividends"; The almighty and omnipresent attorney David Thompson: "I'm not a securities lawyer"; "Sep-p-p...Separate whaa?"; "Interests"; "HERA"; Etc.
All comes down to Regulatory Risk and stock valuation.
Non-negotiable.
I didn't know that Howard now works for BTIG.
An investment bank owned by Goldman Sachs, by the way.
They repeat the same stance peddled by the controversial Howard:
-Howard has always repeated that the latest RFI on the recent LLPA changes, was about changes in the capital requirements and even he submitted a comment about it. Focus, it was LLPA changes.
-They don't know that Capital is meant to cover future unexpected losses, as the expected losses have already been fully reserved in the Allowance for Loan Losses (CECL Accounting standard since January 2020). The report requires a g-fee for the capital that covers expected losses.
-The guarantee fees aren't assessed based on a required ROE. Primarily, the ROE is distorted when there are JPS, as they have their return capped at their dividend rate (Fixed-income securities). Therefore, when you see that JPM has a ROE of 10%, it might be ROE of 20% (a normal ROE for a common stock) and the ROE of the JPS capped at a 7% dividend rate. You can't mix up apples with oranges, making JPS and Cs equivalent securities, which is what these people always attempt.
-Once again pointing out that the future earnings must be recorded as Capital. Clueless about basic concepts because all the exercise of Capital requirements is meant to know how a company can tackle future losses with the picture of the company TODAY (as seen on the Balance Sheet). Not in the future. Today. You can try a different theoretical exercise but then, it will be a second analysis because this one prevails. So, BTIG's Howard still doesn't understand what the capital requirements are for. The guy that repurchased FNMA common stock that reduces the core capital, to boost his EPS target bonus, as seen today ($7B Treasury Stock)
-The minimum Leverage capital requirement stands at $208B. Then, it's not $400B and later, $300B, as they point out. The capital buffers aren't a capital requirement. This threshold is met with Core Capital.
-The Core Capital as of September 30, 2023, stands at $-76B officially in their ERCF tables, and it drops to $-194B adjusted for the offset (reduction of Retained Earnings account) attached to the $118B SPS LP increased for free absent from the balance sheets. Yet, BTIG's Howard claims that their capital today is $100B+, which refers to the $118B Capital Reserve, notwithstanding that the Capital Reserve drops to $0 with the offset pointed out before. Above all, the Capital Reserve isn't a valid capital metric under the FHEFSSA. So, wrong capital metric and badly assessed. More evidence of con operation.
-Exercise the Warrant, without pointing out why this security was authorized in the law in the first place, as FnF are NOT ordinary businesses.
-Let alone that capital distributions are restricted (dividends and today's SPS LP increased for free)
These people aren't serious. Stock price manipulation.
Beware of scammers that mix up the amendments of the SPS certificate (prospectus) with the amendments of the SPSPA.
Let alone Glen Bradford that calls the SPS "SPSPA".
The SPS certificate is usually amended a few weeks after a SPSPA amendment or whenever they want, because what the plotters call "4th amendment", is the 4th amendment of the SPS certificate dated April 2021, in light of the January 14, 2021 6th amendment of the SPSPA, called 3rd Letter Agreement, currently in force (the latest with regard to compensations to UST)
The plotters mess around with the names because secretary Yellen was sworn in on January 26, 2021, and thus, unrelated to the January 14, 2021 SPSPA amendment.
This is why they talk about the 4th (SPS Certificate) amendment, of April 2021, that didn't need the OK from Yellen.
Summary:https://www.fhfa.gov/Conservatorship/Pages/Senior-Preferred-Stock-Purchase-Agreements.aspx
The September 2019 "Letter Agreement" would be the 5th amendment of the SPSPA, because there was one before, on December 2017 by the allies Watt-Mnuchin (concealed to seek constitutional damages for the "for cause" removal restriction), that kick-started the current Financial Statement fraud with a one-time $3B SPS LP increased for free out of the blue, absent from the Balance Sheets, along with its offset (Reduction of the Retained Earnings account)
With the 5th amendment, the SPS LP increased for free doesn't emerge as a result of the cumulative dividend when it isn't paid with cash, stipulated in a SPSPA covenant (the only way a LP can be increased, otherwise new SPS had to be issued for each draw from the UST). The thing is that the dividend was terminated, as a consequence of judge Willett's ruling in the Collins case 3 weeks before (5th Circuit en banc), contending that the conservator exceeded its powers. And it's a brand new compensation to UST, laid out in this brand new covenant:
Not a dividend but another capital distribution in its FHEFSSA definition (1) compensation with stocks, other than a dividend.
Then, the same Restriction on Capital Distributions and the same we do to legalize this action: it's applied towards the exceptions. In this case, for the Recapitalization (CFR 1237.12). That is, necessarily the Common Equity is held in escrow, which also complies with the FHFA-C's Rehab power (soundness). Easily seen with the aforementioned offset, had the SPS LP increased for free and the offset, been posted on the Balance Sheet.
Everything is adjusted (Image). So, nice try and now pay damages.
The moment that Mnuchin made clear in a press release that the dividends were terminated to all effects.
BOTTOM LINE
Trump and Mnuchin participated actively in the continuation of the Separate Account plan, both with Mel Watt and with Calabria.
All of them expect the Congress to undo what's already been done and "treat the stocks".
Or, the return of Trump to finish them off, along with holding up all other scams worldwide:
-Argentina-IMF spree.
-Fraudulent European Central Banks' Payment Systems Target2 and TIPS (External Positions)
-BOE's stamp on loans to foreigners.
-The S.E.C.-sponsored unbacked token scam.
-CRTs in FnF.
-Etc.
Can't you see that Geithner submitted a Privatized Housing Finance System for the release of FnF from Conservatorship, at the request of the Dodd-Frank law? Guarantee fee increases, Basel framework for capital standards, a 3-option Housing Finance System revamp.
The same as before. The only difference is that the FHEFSSA MANDATORY release Undercapitalized, stripped out, now is much higher (Basel Framework) and it isn't mandatory anymore.
Hence, the overtime aiming to get rid of the unwanted AT1 capital instruments (JPSs). And that's achieved only when the CET1 > 2.5% of the Adjusted Total Assets (Compliance with Tier 1 Capital > 2.5% of ATA later). A threshold fetched by the laggard Fannie Mae in the Q3 2023. It could have been done outside the Conservatorship but, somehow, the FHFA wanted to get rid of them before, "in its best interests".
The aspects that are lawful can't be "treated" with the stocks (the sought-after rebate). Only the unlawful parts with the enterprises, like the $151B cash refund and a posting in the Retained Earnings accounts.
The Equity holders are only entitled to a compensation for the Securities Law violations and the con operation in the U.S. courts.
The endgame is Charter revoked, as the UST backup of FnF will no longer be necessary. All their privileges would have been removed. That's the Privatized Housing Finance System.
Regulatory Risk.