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cfljmljfl, I'm not sure if this answers your question? Perry is the lead case. The ones below in red are the consolidated, 5254 is Fairholme, 5262 has Boies firm in there.
USCA Case #14-5262 Document #1561238 Filed: 07/07/2015 Page 1 of 1
United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
No. 14-5243
Perry Capital LLC, for and on behalf of investment funds for which it acts as investment manager,
Appellant v.
Jacob J. Lew, in his official capacity as the Secretary of the Department of the Treasury, et al.,
Appellees
------------------------------
Consolidated with 14-5254, 14-5260, 14-5262
September Term, 2014
1:13-mc-01288-RCL 1:13-cv-01025-RCL 1:13-cv-01053-RCL 1:13-cv-01439-RCL
Filed On: July 7, 2015 [1561238]
____________
O RDE R
?Upon consideration of appellees’ unopposed motion for extension of time to file response briefs, it is
ORDERED that the motion be granted. The following revised briefing schedule will now apply in this case:
Appellees' Brief(s) Appellants' Reply Brief(s) Deferred Appendix
Final Briefs
September 14, 2015 October 26, 2015 November 9, 2015 November 30, 2015
FOR THE COURT:
Mark J. Langer, Clerk
/s/
Michael C. McGrail Deputy Clerk
Good article, thanks Zargis!
True! Many already have a stake. How many friends do you have that say, oh ya, we got a Fannie, Freddie backed loan. How many brokers/owners do you know that are thrilled with The efficiency of Fannie/Freddie? Keep the good stuff, throw out the bozos!!!
They should have never let conservatorship go on this long, (if ever.) Too many getting away with too much, because they don't think they'll be held accountable. Shareholders survived for a reason! Maybe Paulson's subconscious! :)
and so it remains seven years later...
If they weren't in conservatorship, we would would be able to communicate with the board or vote in new members. They would be held accountable.
I heard it last year, but I forgot that Bill Maloni asked one of the questions, ha!
He'll have to!
"the mortgage wars had nothing to do with reducing the risk for homebuyers or protecting the taxpayer"
That's an important one the media never talks about. At least we have a good list here of questions to send to Grassley, media, congressmen. :)
No, they just added in wording for the other parties from the other cases that Sweeney recently approved to have access. Before, it was just Fairholme.
Here's part of it.
1. Parties. For the purposes of this Protective Order, the term “party” or “parties” shall refer only to the plaintiffs in Fairholme Funds, Inc. et al v. United States (No. 13-465C, Fed. Cl.), Cacciapalle, et al. v. United States (No. 13-466C, Fed. Cl.), Reid v. United States (No. 14-152C, Fed. Cl.), Washington Federal, et al. v. United States (No. 13-385C, Fed. Cl.), Fisher v. United States (No. 13-608C, Fed. Cl.), Rafter v. United States (No. 14-740C, Fed. Cl.), and Arrowood Indemnity Company, et al. v. United States (No. 13-698C, Fed. Cl.) (the Actions”) and defendant, the United States, including its agencies. For the purposes of this Protective Order, the term “party” shall also include the Federal Housing Finance Agency (FHFA). The inclusion of FHFA in this definition does not imply or state that FHFA is a defendant, or that FHFA is a Government actor for all purposes. For purposes of this Protective Order, the term “producing party” includes non-parties that produce material that has been designated as Protective Information.
@DavidHStevens: HFSC mark-up just concluded.:QM in portfolio: 38-18,Cap GSE CEO pay: 57-1, NMLS background check: 57-0,TILA/RESPA grace period: 45-13
Yes, not good actions by gov! Is Grassley still covering this at all?
They're pretty fired up, aren't they? :) We'll see what Ackman has to say on the 10th?
From Fed statement
"Growth in household spending has been moderate and the housing sector has shown additional improvement"
From Fairholme report
Today, shareholders of The Fairholme Fund collectively own $3.4 billion liquidation value of Fannie Mae and Freddie Mac preferred stock. That means each shareholder effectively owns approximately $25,000 (on average) of two of the most profitable franchises in America.
This page is not part of The Fairholme Fund 2015 Semi-Annual Report. ii
Yet for reasons that are not entirely understood, some in government apparently want their friends in the mortgage-industrial complex to take for free what you, the shareholders of these companies, paid for with cash. So we continue to search for the truth:
• Why did federal regulators design a financial support program for Fannie and Freddie on the basis of academic estimates of future performance rather than tried and true statutory accounting and claims-paying ability (which is the standard for all regulated mortgage insurers)?
• Why did federal regulators require Fannie and Freddie, while in conservatorship, to purchase $40 billion per month in underperforming junk bonds from competitors?
• Why did federal regulators force Fannie and Freddie, while in conservatorship, to participate in Treasury’s Home Affordable Modification Program (HAMP) and Home Affordable Refinance Program (HARP), which resulted in more than $46 billion of losses that the companies would not have otherwise incurred?
• Why did mortgage-backed securities issued by Fannie and Freddie perform dramatically better than private label securities issued by big banks throughout the financial crisis?
• Why did federal regulators settle litigation cases initiated by Fannie and Freddie against major financial institutions for significantly less than what other similarly situated plaintiffs recovered?
• Why did federal regulators seize more than $18 billion in litigation proceeds recovered by Fannie and Freddie to date?
• Why did federal regulators order Fannie and Freddie to delist their securities from the New York Stock Exchange in 2010?
• Why did federal regulators prohibit Fannie Mae from selling $3 billion of Low Income Housing Tax Credits to third-party investors?
• Why were Fannie and Freddie, while in conservatorship, forced to divert billions of dollars in guaranty fees to Treasury to offset the cost of a payroll tax cut?
• Why did FHFA, as conservator, force Fannie and Freddie to gift all of their capital and all future earnings to Treasury in perpetuity?
• Why were Fannie and Freddie, while in conservatorship, forced to pay “voluntary” cash dividends to Treasury if funds were not available and the regulated entities were “not in capital compliance?”
• Why did FHFA force Fannie and Freddie, while in conservatorship, to issue debt in order to monetize their deferred tax assets and pay the proceeds to Treasury in 2013, particularly when FHFA had previously stated that deferred tax assets “[could] not be monetized?”
• Why did Fannie Mae CEO Tim Mayapoulos describe the Net Worth Sweep as a “positive change” with “a lot of good in it” in his August 2012 announcement to employees? Was he coerced by federal regulators?
• Why has the Securities and Exchange Commission permitted a single controlling shareholder (i.e., Treasury) and its affiliates to simultaneously act as director, regulator, conservator, supervisor, contingent capital provider, and preferred stock investor of two publicly traded companies?
• Why do some Treasury officials question the sustainability of Fannie and Freddie’s earnings power in the years ahead, when Treasury’s own 2014 Annual Report indicates that the companies will be consistently profitable for each of the next 25 years?
• Were certain federal government employees who crafted the Net Worth Sweep acting at the behest of crony capitalists seeking to displace Fannie and Freddie?
As owners, we demand answers to these and many other questions. Administration officials and their beneficiaries respond with alternative narratives that are wholly unsupported by the facts. They delay discovery and judicial proceedings at every opportunity. They deliberately conceal and withhold pertinent information. They conduct the business of government with little regard for the law.
In the Court of Federal Claims, the Federal Housing Finance Agency and United States Treasury produced “final” privilege logs listing 11,292 relevant documents (perhaps 100,000 pages of information) that they will not release – not to the public, not to the Fund’s lawyers under a protective seal, not even to the Courts. The administration’s sweeping effort to veil their conduct in secrecy has not gone unnoticed; The New York Times recently filed motions before the Court of Federal Claims requesting that various documents, which “have been improperly designated as Protected Information and kept confidential” by the government, be released to the public. In its motions, the Times noted that:
The courts have repeatedly recognized that disclosure of discovery is particularly appropriate when a lawsuit sheds light on the performance of governmental agencies and entities – which is precisely the case here . . . The public’s interest in the underlying facts of this case is undeniable . . . The case directly addresses how the Government is going about recouping public funds used in the bailout and whether other investors are being treated lawfully. The Government should not be able to hide from the public – voters and taxpayers – the facts that were central to the decisions that the Government made as part of the far-reaching effort to safeguard the U.S. economy. To the contrary, access to the evidence will enable the public to understand more fully the decisions the Government has made in the public’s name and to assess the wisdom and effect of those decisions . . . [The defendants’] disregard for the public interest is sadly of a piece with the Government’s decision to make the depositions confidential in the first place. There is no reason that citizens should be denied the ability to effectively monitor this important lawsuit as it unfolds.
In the U.S. Court of Appeals (D.C. Circuit), the Fund’s recently filed opening brief explains why the unprecedented and illegal 2012 Net Worth Sweep is antithetical to the fiduciary duties Congress imposed on FHFA as conservator of Fannie Mae and Freddie Mac – and should be vacated. The well-established duties of a conservator prohibit FHFA from running a ward for the government’s exclusive enrichment, at the expense of all other interested parties and completely shielded from judicial review. Common sense dictates that a
This page is not part of The Fairholme Fund 2015 Semi-Annual Report. iii
conservator conserves. In imposing the Net Worth Sweep, the FHFA, as conservator, unlawfully acts as an “anti-conservator.” Eight briefs from various amicus curiae (“friends of the court”) support the Fund’s case. Here are a few highlights:
• Myron Steele, the former Chief Justice of the Delaware Supreme Court, persuasively argues that the Net Worth Sweep is “unenforceable and void ab initio under Section 151 of the Delaware General Corporation Law (“DGCL”). Preferred stock of a Delaware corporation cannot be given a cumulative dividend right equal to all the net worth of the corporation in perpetuity. The Net Worth Sweep is a flatly illegal term for any preferred stock instrument, whether or not held by the federal government . . . Preferred stockholders cannot have a perpetual claim on all the residual earnings of the Companies to the exclusion of common stockholders under Delaware law . . . Because the Net Worth Sweep diverts, in perpetuity, all of the net worth of the Companies (assets minus liabilities) to Treasury, it neither is paid at a ‘rate’ nor is it payable ‘in preference to’ or ‘in relation to’ the dividends payable to other classes or series of stock.”
• Thomas Vartanian, a former bank regulatory General Counsel for the federal government, emphasizes that “as a purported method of financing the operations of the companies, the net worth sweep bears no resemblance to any prior financing arrangement ever entered into by the FDIC as conservator. [T]he common and well-understood function of an FDIC conservator is to place the regulated entity into a sound and solvent condition, and to preserve and conserve its assets for the eventual benefit of all shareholders and creditors, so that the entity can be returned to the control of its board of directors and shareholders . . . not an evasion of statutory duties and an end-run around a legal capital structure.”
• Michael Krimminger, the former Deputy to the Chairman and General Counsel of the Federal Deposit Insurance Corporation, cogently articulates that, “Nothing in HERA authorizes the de facto nationalization of the Companies, such as occurred here, under the guise of a conservatorship. FHFA acted outside its authority as a conservator because it affirmatively acted to strip, rather than ‘preserve and conserve,’ the assets of the Companies and to bar any prospect that the Companies could return to a ‘sound and solvent’ condition.”
• Timothy Howard, the former Chief Financial Officer for Fannie Mae, explains that “unlike the rescues of various commercial and investment banks at around the same time, Treasury directed FHFA to place Fannie and Freddie into conservatorship not in response to any imminent threat of failure, but rather for policy reasons and over the objections of Fannie’s and Freddie’s boards. Once in conservatorship, the Companies’ managements had no role in negotiating the terms on which they would be offered assistance; Treasury and FHFA set these terms unilaterally. Treasury and FHFA [had] an extremely strong incentive to make accounting choices for the Companies that accelerated or exaggerated their expenses and greatly increased their losses, in order to create a large and permanent flow of revenue to Treasury . . . Treasury’s effective nationalization of Fannie and Freddie was a policy decision, and the compensation Treasury granted itself upon taking over Fannie and Freddie was grossly disproportionate to the true economic risk it faced, both at the time and subsequently.”
• A brief on behalf of the National Black Chamber of Commerce makes clear that the Net Worth Sweep forces Fannie and Freddie “to operate on the edge of insolvency – even though they would otherwise post billions of dollars in profits annually – until they are subsumed by the federal government . . . Fannie Mae and Freddie Mac play a vital role in minority communities by expanding access to credit and ensuring affordable housing. If allowed to stand, the Government’s ‘Net Worth Sweep’ and winding down of Fannie and Freddie will damage those communities by drying up credit and denying African-Americans and other minorities the opportunity – the dream – of homeownership.”
While common sense and the law are clearly on the Fund’s side, critics continue to obfuscate the facts. Freddie Mac CEO Donald Layton noted recently that the company “might actually begin to do things that would be GAAP-oriented rather than economically oriented.” This is a stunning admission that defies all logic, except in this unprecedented scenario whereby the company’s assets are drained by its regulators. The implications are clear: Fannie Mae and Freddie Mac are purposely being rendered less safe and less sound each quarter – in direct contravention to the conservator’s explicit mandate. Some may think that the regulators are simply suffering from cognitive dissonance given their feverish push for higher capital standards embodied in the Dodd-Frank Act, but there are clear indications of more disturbing elements at work – including greed, spite, and ulterior political motives. Thankfully, our constitutional system includes an independent judiciary.
Despite the progress that the Fund’s portfolio companies have made, price performance has been weak and the gulf between our estimates of intrinsic values and market prices has widened in recent months. History teaches us time and time again that investment prices can experience periods of underperformance before becoming “overnight successes.” Unfortunately, we are not proven market timers. Fortunately, we have high confidence in our company-specific analyses and ample liquidity (cash and cash equivalents comprise 14.3% of the Fund portfolio), and we recognize Mr. Market’s propensity for sudden mood swings.
Onward and upward,
Bruce R. Berkowitz
Chief Investment Officer Fairholme Capital Management
http://www.fairholmefunds.com/reportsmgt
Thanks H!
It probably still won't be by much?
Snoozeville 'til Fed statement at 2pm EDT
Without all the BS is refreshing.
I'm not crazy about Basel. We're letting international regulations creep in. I'm not sure that some realize, we have to deal with that now also.
What about Basel requirements if gov is out completely?
Everyone wants a piece of Fannie, Freddie. The rest is just for show. :)
Then, they don't get to swipe all the net profits.
Sweeney's own words, "no need to wait." :)
Should get interesting again in August!
I agree. UST communication with FHFA is pretty strong with everything else. The sweep is just too profitable. All they have to do is keep stalling, and billions continue to be swept to the Treasury.
"Treasury has consistently communicated to FHFA that a change in CEO compensation at Fannie Mae and Freddie Mac is not appropriate, given that taxpayers continue to backstop both enterprises,” Adam Hodge, a spokesperson for the U.S. Treasury, said at the time.
http://www.housingwire.com/articles/34608-bill-to-kill-3m-raises-for-fannie-freddie-ceos-gaining-momentum?utm_source=dlvr.it&utm_medium=twitter&utm_campaign=housingwire
"The serious volatility in China's domestic stock market—shares in Shanghai plunged 8.5 percent on Monday and lost more ground overnight—is seen as increasing demand for U.S. real estate, not hindering it.
"While investors in the Chinese stock market have certainly experienced a negative hit to their net asset positions in recent weeks, since the Chinese yuan is essentially pegged (within a narrow floating band) to the U.S. dollar, any pass-through effect to the exchange rate is not visible," said Svenja Gudell, director of economic research at real estate site Zillow. "Investors in Chinese equity markets will flee to safe assets, and few assets offer the combination of relatively modest risk and high returns as U.S. real estate. It is very plausible that China's stock market volatility could push more Chinese investors to buy homes in the U.S."
http://www.cnbc.com/2015/07/28/chinese-buyers-feed-new-energy-into-texas-real-estate.html
You're not the only one! :)
Dax1, or are you referring to the docs going to the other courts.
"In practical terms, the ruling means Fairholme’s attorneys can bring all of the protected information currently under seal – more than 10,000 pages worth of depositions, documents and whatever else falls under the discovery terms – into the D.C. Circuit without having to keep going back to the judge for decisions on individual components"
http://www.valuewalk.com/2015/07/fannie-mae-judge-to-treasury-turn-over-all-discovery-documents/
Dax1, were you wanting to know when they remove the "protected information" designation? Next response due 7/31
Protected Information" Designation from Certain Grant Thornton Documents , filed by All Plaintiffs.Response due by 7/31/2015. (Attachments: # 1 Appendix Volume 1, # 2 Appendix Volume 2, # 3 Appendix Volume 3)(Cooper, Charles)
¡Claro! Paula! Clear! :)
and growing!
Amazing!
FOMC meeting today and tomorrow
On Friday, July 31, Secretary Lew will preside over an executive session of the Financial Stability Oversight Council (Council) at the Treasury Department. The preliminary agenda includes a discussion of the annual re-evaluations of the designations of certain nonbank financial companies, an update regarding the Council’s ongoing work on asset management, an update on market developments, and a discussion of the ongoing examination by member agencies of the structure and participants in the U.S. Treasury market, following the findings in the recent report “The U.S. Treasury Market on October 15, 2014.”*
From Gramm's written
"The Financial Stability Oversight Council (FSOC) was specifically empowered to override precedents and bipartisanship. Since FSOC meets in private and is made up exclusively of the sitting President’s appointed allies, bipartisan input and sunshine -- the historic checks on regulatory abuse -- have been lost. In addition, since what constitutes a systemically important institution was never defined by Dodd-Frank, it has become whatever FSOC says it is. The systemically important designation of FSOC is now a sword hanging over the head of every major financial institution. Banks that have been designated have regulators embedded in their executive offices to monitor and advise, eerily reminiscent of the old political officers who were placed in every Soviet factory and military unit."
Peter Wallison
I agree!