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It seems they pulled the contracts apart, it was not listed this way before
https://www.fhfa.gov/Conservatorship/Pages/Senior-Preferred-Stock-Purchase-Agreements.aspx
The Controlling agreement is the PSPA.
Which allow the LP to exist and the warrant to exist
1) PSPA which allows: ->
A) CERTIFICATE OF TERMS OF LP PREFERRED STOCK, SERIES 2008-2
B) WARRANT TO PURCHASE COMMON STOCK (79.9%)
-> amendment to original PSPA ->
C) Letter agreements with amendment to PSPA
I think they want the contract (PSPA) to exist even when the LP and Warrant are gone, not sure though, will investigate into it, if you find something in the meantime let me know, there will be a reason for sure
FHFA/Treasury agreement to amend the Preferred Stock Purchase Agreements (PSPAs)
Lawsuits over $5Billion in “Litigation End Date” 5.2 & 5.3(b) of the agreement, 15 in total
District Court Shareholder Type- Lawsuit Type
1) 19-422/16-3113 Patrick J Collins v. Mnuchin .……….. Common & Preferred, Derivative
2) 13-1025 Perry Capital LLC v. Mnuchin….……………… Common & Preferred, Derivative
3) 13-1053 Fairholme Fund, Inc. v. FHFA…………………… Preferred, Direct & Derivative
4) 13-1288 In re: Fannie Freddie……………………………….. Common & Preferred, Class Action, Direct, Derivative, Jury Demand
5) 13-1439 Arrowood Indemnity Company v. Fannie… Preferred, Direct & Derivative
6) 17-497 Rop v. FHFA and Treasury…………………………. Common & Preferred, Derivative
7) 18-2506 Atif F. Bhatti vs. FHFA and Treasury ……….. Common & Preferred, Derivative
8) 18-3478 Wazee Street Opp. v. FHFA……………………… Common, Class action, Derivative, Jury Demand
Federal Court
9) 13-465C Fairholme Funds, Inc. v. United States……… Common & Preferred, Direct & Derivative
10) 13-608C Bryndon Fisher (FNMA) v. United states..… Common Derivative
11) 14-152C Bruce Reid (FMCC) v. United states…………… Common Derivative
12) 13-672C Erick Shipmon v. United states ………………… Common Derivative
13) 14-740C Louise Rafter Pershing Square v. U.S….……. Common Direct & Derivative
14) 18-1124C Wazee Street v. United states ..……………… Common, Class Action, Direct & Derivative
Class= all persons who held Common in Fannie/Freddie on August 17, 2012
15) 18-1226C Perry Capital LLC v. United States.…………. Common & Preferred, Direct & Derivative
District Court Expected Ruling / Progress
1) 19-422/16-3113 Patrick J Collins v. Mnuchin.……….. June 2021
2) 13-1025 Perry Capital LLC v. Mnuchin….……………… Remanded from appeals court to Judge: Royce C. Lamberth Feb 21, 2017
3) 13-1053 Fairholme Fund, Inc. v. FHFA…………………… Remanded from appeals court to Judge: Royce C. Lamberth Feb 21, 2017
4) 13-1288 In re: Fannie Freddie……………………………….. Remanded from appeals court to Judge: Royce C. Lamberth Feb 21, 2017
5) 13-1439 Arrowood Indemnity Company v. Fannie… Remanded from appeals court to Judge: Royce C. Lamberth Feb 21, 2017
6) 17-497 Rop v. FHFA and Treasury…………………………. On appeal in the Sixth Circuit, Mediation Conference planned and cancelled
7) 18-2506 Atif F. Bhatti vs. FHFA and Treasury ……….. Court strives to issue opinion within 90 days after the oral Argument(Oct 15, 2019)
8) 18-3478 Wazee Street Opp. v. FHFA……………………… Notice of supplemental authority Collins 19-422 case
Federal Court
9) 13-465C Fairholme Funds, Inc. v. United States……… On interlocutory appeal designated as the lead appeal
10) 13-608C Bryndon Fisher (FNMA) v. United states..… Participates in Interlocutory Appeal Fairholme
11) 14-152C Bruce Reid (FMCC) v. United states…………… Participates in Interlocutory Appeal Fairholme
12) 13-672C Erick Shipmon v. United states ………………… Consolidated with 13-608C Fisher
13) 14-740C Louise Rafter Pershing Square v. U.S….……. Order continuing to stay, resolution 21 days following Fairholme Funds
14) 18-1124C Wazee Street v. United States ..……………… Staying following results in Fairholme
15) 18-1226C Perry Capital LLC v. United States .…………. Staying following results in Fairholme
“Litigation End Date” means the date on which all litigation pending as of January
14, 2021, against Purchaser, Seller, or the United States or any of its agencies or
officers arising out of or in connection with the placement of Seller into
conservatorship and/or the Third Amendment, other than litigation that presents a
maximum total aggregate potential monetary exposure of less than $5 billion, has been
(a) resolved in a final non-appealable judgment or (b) settled with prejudice and Seller
has indemnified Purchaser and the United States from and against any loss, cost, or
damage of any kind arising out of such placement into conservatorship or the Third
Amendment.
Letter Agreement for Fannie Mae Jan 14, 2020
https://www.fhfa.gov/Media/PublicAffairs/Documents/Executed-Letter-Agreement-for-Fannie-Mae.pdf
DEPARTMENT OF THE TREASURY
| WASHINGTON, D.C.
SECRETARY OF THE TREASURY
January 14, 2021
The Honorable Mark A. Calabria
Director
Federal Housing Finance Agency
400 7th Street, SW
Washington, DC 20219
Dear Director Calabria:
Reference is made to the Amended and Restated Preferred Stock Purchase Agreement dated as
of September 26, 2008, as amended (the Agreement), between the United States Department of
the Treasury (Treasury) and the Federal National Mortgage Association (the Enterprise), acting
through the Federal Housing Finance Agency as its Conservator, and the Amended and Restated
Certificate of Designation (the Certificate) executed pursuant to the Agreement. Capitalized
terms used herein without definition have the meanings assigned to them in the Agreement and
the Certificate.
In the Agreement, Treasury committed itself to provide to the Enterprise, on the terms and
conditions provided in the Agreement, immediately available funds in an amount determined
from time to time as provided in the Agreement, but in no event in an aggregate amount
exceeding $100,000,000,000. In consideration for Treasury’s commitment, the Enterprise
agreed to sell, and did sell, to Treasury 1,000,000 shares of senior preferred stock, in the form of
Variable Liquidation Preference Senior Preferred Stock of the Enterprise with terms set forth in
the Certificate, and an initial liquidation preference equal to $1,000 per share.
The Agreement provides that the aggregate liquidation preference of the outstanding shares of
senior preferred stock shall be automatically increased by an amount equal to the amount of each
draw under Treasury’s funding commitment, and the Certificate originally provided that the
senior preferred stock shall accrue dividends at the annual rate per share equal to 10 percent on
the then-current liquidation preference.
Treasury and the Enterprise have heretofore entered into:
(a) the Amendment dated as of May 6, 2009, to the Agreement, in which Treasury and
the Enterprise increased to $200,000,000,000 the maximum aggregate amount permitted
to be provided to the Enterprise under the Agreement, and amended the terms of the
Agreement in certain other respects;
(b) the Second Amendment dated as of December 24, 2009, to the Agreement, in which
Treasury and the Enterprise modified the maximum aggregate amount permitted to be
provided to the Enterprise under the Agreement, as previously amended, by replacing the
fixed maximum aggregate amount with the new formulaic maximum amount specified
therein, and amended the terms of the Agreement, as previously amended, in certain other
respects;
(c) the Third Amendment (Third Amendment) dated as of August 17, 2012, to the
Agreement, in which Treasury and the Enterprise agreed that the Enterprise would
modify the dividend rate provision set forth in the Certificate, and amended the terms of
the Agreement, as previously amended, in certain other respects;
(d) the letter agreement dated as of December 21, 2017, in which Treasury and the
Enterprise agreed that the Enterprise would further amend the dividend rate provision set
forth in the Certificate to establish an Applicable Capital Reserve Amount of
$3,000,000,000, such that dividends are payable only if, and in the amount by which, the
Dividend Amount, as previously amended, exceeds the Applicable Capital Reserve
Amount, and to increase the liquidation preference of the outstanding shares of senior
preferred stock by an equal amount; and
(e) the letter agreement dated as of September 27, 2019 (the Second Letter Agreement),
in which Treasury and the Enterprise agreed that the Enterprise would further amend the
dividend rate provision set forth in the Certificate to establish an Applicable Capital
Reserve Amount of $25,000,000,000, such that dividends are payable only if, and in the
amount by which, the Dividend Amount, as previously amended, exceeds the Applicable
Capital Reserve Amount; to increase the liquidation preference of the outstanding shares
of senior preferred stock by $22,000,000,000; and to negotiate and execute an additional
amendment to the Agreement that further enhances taxpayer protections by adopting
covenants broadly consistent with recommendations for administrative reform contained
in Treasury’s September 2019 Housing Reform Plan.
Treasury and the Enterprise are each authorized to enter into this letter agreement further
amending the Certificate by modifying the dividend and liquidation preference provisions of the
senior preferred stock sold by the Enterprise to Treasury. Therefore, for and in consideration of
the mutual agreements herein contained and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, Treasury and the Enterprise agree as
follows:
I. Amendments to Section 1 (Adding Definitions for Certain Defined Terms)
Section | of the Agreement is hereby amended by inserting in the appropriate places in
alphabetical order the following:
“Capital Reserve End Date” means the last day of the second consecutive fiscal
quarter during which Seller has had and maintained capital equal to or in excess of all
2
of the capital requirements and buffers under the Enterprise Regulatory Capital
Framework.
“Enterprise Regulatory Capital Framework’ means the rule published by the Agency
in the Federal Register on December 17, 2020, 85 Fed. Reg. 82150 (to be codified at
12 CFR pt. 1240).
“Litigation End Date” means the date on which all litigation pending as of January
14, 2021, against Purchaser, Seller, or the United States or any of its agencies or
officers arising out of or in connection with the placement of Seller into
conservatorship and/or the Third Amendment, other than litigation that presents a
maximum total aggregate potential monetary exposure of less than $5 billion, has been
(a) resolved in a final non-appealable judgment or (b) settled with prejudice and Seller
has indemnified Purchaser and the United States from and against any loss, cost, or
damage of any kind arising out of such placement into conservatorship or the Third
Amendment.
“Multifamily Mortgage Asset” means a Mortgage Asset that is or is secured by a
property comprising five or more family dwelling units.
“Single-Family Mortgage Loan” means a conventional mortgage (as defined in the
Charter Act) secured by property comprising one- to four-family dwelling units.
Il. Applicable Capital Reserve Amount
Section 10(g)(ii) of the Certificate provides that the consent of Treasury, as the holder of at least
two-thirds of the outstanding shares of Senior Preferred Stock, is necessary to authorize any
amendment of the Certificate affecting the interests of the holders. Treasury and the Enterprise
agree that the Enterprise will either amend the Certificate, or issue a replacement Certificate, in
either case so that, effective as of December 31, 2020:
Paragraph 2(a) reads as follows:
(a) For each Dividend Period from the date of the initial issuance of the
Senior Preferred Stock through and including December 31, 2012, holders of outstanding
shares of Senior Preferred Stock shall be entitled to receive, ratably, when, as and if
declared by the Board of Directors, in its sole discretion, out of funds legally available
therefor, cumulative cash dividends at the annual rate per share equal to the then-current
Dividend Rate on the then-current Liquidation Preference. For each Dividend Period
from January 1, 2013 through and including the Capital Reserve End Date, holders of
outstanding shares of Senior Preferred Stock shall be entitled to receive, ratably, when, as
and if declared by the Board of Directors, in its sole discretion, out of funds legally
| available therefor, cumulative cash dividends in an amount equal to the then-current '
Dividend Amount. For each Dividend Period after the Capital Reserve End Date, holders
of outstanding shares of Senior Preferred Stock shall be entitled to receive, ratably, when,
as and if declared by the Board of Directors, in its sole discretion, out of funds legally
3
available therefor, cumulative cash dividends in an amount equal to the then-current
Dividend Amount. Dividends on the Senior Preferred Stock shall accrue from but not
including the date of the initial issuance of the Senior Preferred Stock and will be payable
in arrears when, as and if declared by the Board of Directors quarterly on March 31, June
30, September 30 and December 31 of each year (each, a “Dividend Payment Date”),
commencing on December 31, 2008. If a Dividend Payment Date is not a “Business
Day,” the related dividend will be paid not later than the next Business Day with the
same force and effect as though paid on the Dividend Payment Date, without any
increase to account for the period from such Dividend Payment Date through the date of
actual payment. “Business Day” means a day other than (i) a Saturday or Sunday, (ii) a
day on which New York City banks are closed, or (iii) a day on which the offices of the
Company are closed.
If declared, the initial dividend will be for the period from but not including the
date of the initial issuance of the Senior Preferred Stock through and including December
31, 2008. Except for the initial Dividend Payment Date, the “Dividend Period” relating to
a Dividend Payment Date will be the period from but not including the preceding
Dividend Payment Date through and including the related Dividend Payment Date. For
each Dividend Period from the date of the initial issuance of the Senior Preferred Stock
(other than a Dividend Period from January 1, 2013 through and including the Capital
Reserve End Date), the amount of dividends payable on the initial Dividend Payment
Date or for any Dividend Period (other than a Dividend Period from January 1, 2013
through and including the Capital Reserve End Date), that is not a full calendar quarter
shall be computed on the basis of 30-day months, a 360-day year and the actual number
of days elapsed in any period of less than one month. For the avoidance of doubt, for
each Dividend Period from the date of the initial issuance of the Senior Preferred Stock
(other than a Dividend Period from January 1, 2013 through and including the Capital
Reserve End Date), in the event that the Liquidation Preference changes in the middle of
a Dividend Period, the amount of dividends payable on the Dividend Payment Date at the
end of such Dividend Period shall take into account such change in Liquidation
Preference and shall be computed at the Dividend Rate on each Liquidation Preference
based on the portion of the Dividend Period that each Liquidation Preference was in
effect.
Paragraph 2(c) reads as follows:
| (c) For each Dividend Period from the date of the initial issuance of the
Senior Preferred Stock through and including December 31, 2012, “Dividend Rate”
means 10.0 percent; provided, however, that if at any time the Company shall have for
any reason failed to pay dividends in cash in a timely manner as required by this
Certificate, then immediately following such failure and for all Dividend Periods
thereafter until the Dividend Period following the date on which the Company shall have
paid in cash full cumulative dividends (including any unpaid dividends added to the
Liquidation Preference pursuant to Section 8) the “Dividend Rate” shall mean 12.0
percent.
4
For each Dividend Period from January 1, 2013, through and including the
Capital Reserve End Date, the “Dividend Amount” for a Dividend Period means the
amount, if any, by which the Net Worth Amount at the end of the immediately preceding
fiscal quarter, less the Applicable Capital Reserve Amount for such Dividend Period,
exceeds zero. In each case, “Net Worth Amount” means (1) the total assets of the
Company (such assets excluding the Commitment and any unfunded amounts thereof) as
reflected on the balance sheet of the Company as of the applicable date set forth in this
Certificate, prepared in accordance with GAAP, less (ii) the total liabilities of the
Company (such liabilities excluding any obligation in respect of any capital stock of the
Company, including this Certificate), as reflected on the balance sheet of the Company as
of the applicable date set forth in this Certificate, prepared in accordance with GAAP.
“Applicable Capital Reserve Amount” means, as of any date of determination, (A) for
each Dividend Period from January 1, 2013, through and including December 31, 2013,
$3,000,000,000; (B) for each Dividend Period occurring within each 12-month period
thereafter, through and including December 31, 2017, $3,000,000,000 reduced by
$600,000,000 for each such 12-month period, so that for each Dividend Period from
January 1, 2017, through and including December 31, 2017, the Applicable Capital
Reserve Amount shall be $600,000,000; (C) for each Dividend Period from January 1,
2018, through and including June 30, 2019, $3,000,000,000; (D) for each Dividend
Period from July 1, 2019, through and including September 30, 2020, $25,000,000,000;
and (E) for each Dividend Period from October 1, 2020, through and including the
Capital Reserve End Date, the amount of adjusted total capital necessary to meet the
capital requirements and buffers set forth in the Enterprise Regulatory Capital
Framework (as defined in the Preferred Stock Purchase Agreement, as amended).
Notwithstanding the foregoing, for each Dividend Period from January 1, 2018, and
thereafter, following any Dividend Payment Date with respect to which the Board of
Directors does not declare and pay a dividend or declares and pays a dividend in an
amount less than the Dividend Amount, the Applicable Capital Reserve Amount shall
thereafter be zero. For the avoidance of doubt, if the calculation of the Dividend Amount
for a Dividend Period does not exceed zero, then no Dividend Amount shall accrue or be
payable for such Dividend Period and no reduction in the Applicable Capital Reserve
| Amount shall be made.
For each Dividend Period after the Capital Reserve End Date (as defined in the
Preferred Stock Purchase Agreement, as amended), “Dividend Amount” means an
amount equal to the lesser of 10.0 percent per annum on the then-current Liquidation
Preference and a quarterly amount equal to the increase in the Net Worth Amount, if any,
during the immediately prior fiscal quarter; provided, however, that if at any time the
Company shall have for any reason failed to pay dividends in cash in a timely manner as
required by this Certificate, then immediately following such failure and for all Dividend
Periods thereafter until the Dividend Period following the date on which the Company
shall have paid in cash full cumulative dividends (including any unpaid dividends added
to the Liquidation Preference pursuant to Section 8) the “Dividend Amount” shall mean
an amount equal to 12.0 percent per annum on the then-current Liquidation Preference.
Paragraph 4(a) reads as follows:
5
(a) If the Company shall issue any shares of capital stock (including without
limitation common stock or any series of preferred stock) other than issuances of
common stock with aggregate gross proceeds of up to $70 billion in exchange for cash at
any time while the Senior Preferred Stock is outstanding, then the Company shall, within
10 Business Days, use the proceeds of such issuance net of the direct costs relating to the
issuance of such securities (including, without limitation, legal, accounting and
investment banking fees) to pay down the Liquidation Preference of all outstanding
shares of Senior Preferred Stock pro rata, out of funds legally available therefor, by
making a payment in cash to the holders of record of outstanding shares of the Senior
Preferred Stock as they appear in the books and records of the Company on such record
date as shall be fixed in advance by the Board of Directors, not to be earlier than 45 days
nor later than 10 days preceding the date fixed for the payment, with such payment first
being used to reduce any accrued and unpaid dividends previously added to the
Liquidation Preference pursuant to Section 8 below and, to the extent all such accrued
and unpaid dividends have been paid, next being used to reduce any Periodic
Commitment Fees (as defined in the Preferred Stock Purchase Agreement referred to in
Section 8 below) previously added to the Liquidation Preference pursuant to Section 8
below; provided that, prior to the termination of the Commitment (as defined in the
Preferred Stock Purchase Agreement referred to in Section 8 below), the Liquidation
Preference of each share of Senior Preferred Stock shall not be paid down below $1,000
per share. ,
III. Increase in Liquidation Preference
The Enterprise and Treasury agree that, in addition to any adjustments required by Sections 2(b)
and 8(b)(iii) of the Certificate, as of December 31, 2020, and at the end of each fiscal quarter
thereafter, through and including the Capital Reserve End Date, the Liquidation Preference shall
be increased by an amount equal to the increase in the Net Worth Amount, if any, during the
immediately prior fiscal quarter.
IV. Amendment to Section 3.2 (Relating to the Periodic Commitment Fee)
. Section 3.2(d) of the Agreement is hereby amended to read as follows:
(d) Notwithstanding anything to the contrary in paragraphs (a), (b), or (c)
above, and in consideration of the modifications made to the Senior Preferred Stock
effective September 30, 2012 and December 31, 2020, for each quarter commencing
January 1, 2013, and continuing until the Capital Reserve End Date, no Periodic
Commitment Fee shall be set, accrue, or be payable. Not later than the Capital Reserve
End Date, the amount of the Periodic Commitment Fee with respect to the five-year
period commencing on the first January 1 thereafter shall be mutually agreed by
Purchaser and Seller, subject to their reasonable discretion and in consultation with the
Chairman of the Federal Reserve.
6
V. Amendment to Section 5.2 (Relating to Issuance of Capital Stock)
Section 5.2 of the Agreement is hereby amended to read as follows:
5.2. Issuance of Capital Stock. Seller shall not, and shall not permit any of its
subsidiaries to, in each case without the prior written consent of Purchaser, sell or issue
Equity Interests of Seller or any of its subsidiaries of any kind or nature, in any amount,
other than (i) the sale and issuance of the Senior Preferred Stock and Warrant on the
Effective Date and the common stock subject to the Warrant upon exercise thereof, (ii) as
required by (and pursuant to) the terms of any binding agreement as in effect on
September 7, 2008, and (iii) following the occurrence of both (A) Purchaser’s exercise in
full of the Warrant and (B) the Litigation End Date, the issuance of common stock of
Seller ranking junior to or pari passu with the Common Stock (as defined in the Warrant)
as to voting rights, dividends, and distributions, including distributions upon dissolution,
liquidation, or winding up of Seller. For the avoidance of doubt, Seller shall not, and
shall not permit any of its subsidiaries to, in each case without the prior written consent
of Purchaser, sell or issue any Indebtedness, securities, or other rights or interests
| convertible into or exchangeable for Equity Interests of Seller or any of its subsidiaries.
VI. Amendment to Section 5.3 (Relating to Conservatorship)
Section 5.3 of the Agreement is hereby amended to read as follows:
5.3. Conservatorship.
(a) Seller shall not, without the prior written consent of Purchaser, terminate,
seek termination of or (except in connection with a termination permitted under
Section 5.3(b)) permit to be terminated the conservatorship of Seller pursuant to
Section 1367 of the FHE Act, other than in connection with a receivership pursuant to
Section 1367 of the FHE Act.
(b) Conservator, by its signature below, agrees that it shall not, without the
prior written consent of Purchaser, terminate, seek termination of or permit to be
terminated the conservatorship of Seller pursuant to Section 1367 of the FHE Act,
other than in connection with a receivership pursuant to Section 1367 of the FHE Act,
unless, following the Litigation End Date, Seller for two or more consecutive calendar
quarters has and maintains “common equity tier 1 capital” (as defined in the Enterprise
Regulatory Capital Framework) that (together with any stockholder equity that would
result from the consummation of a firm commitment public underwritten offering for
the common stock of Seller as set forth in an underwriting agreement with one or more
broker-dealers reasonably acceptable to Purchaser, which is fully consummated
concurrently with the termination of the conservatorship) is in an amount not less than
3 percent of Seller’s “adjusted total assets” (as defined in the Enterprise Regulatory
Capital Framework). For the avoidance of doubt, for purposes of this paragraph
common equity tier 1 capital shall not include the Senior Preferred Stock.
7
VII. Amendment to Section 5.7 (Relating to Mortgage Assets)
Section 5.7 of the Agreement is hereby amended to read as follows:
5.7. Mortgage Assets. Seller shall not own, as of any applicable date, Mortgage
Assets, in excess of (i) on December 31, 2020, $250 billion (ii) on December 31, 2021,
$250 billion, or (iii) on December 31, 2022, and thereafter, $225 billion. For purposes of
this section 5.7, interest-only securities shall be measured at 10 percent of their notional
value, and other Mortgage Asset balances or amounts shall be measured at unpaid
principal balance.
The definition of Mortgage Assets in Section 1 of the Agreement is hereby amended by
deleting the following:
“Mortgage Asset balances or amounts shall be measured at unpaid principal
balance for purposes of Section 5.7 only.”
VIII. Amendment to Section 5 (Adding New Sections 5.12, 5.13, 5.14, and 5.15)
Section 5 of the Agreement is hereby amended by inserting after section 5.11 the
following:
5.12. Equitable Access to the Secondary Market. Seller shall:
(a) not vary the pricing or any other term of the acquisition by Seller of any
Single-Family Mortgage Loan (including by granting any variance) based on the size,
charter type, or volume of business of the seller of such loan;
(b) offer to purchase at all times, for equivalent cash consideration (subject to
an appropriate adjustment for the value of any servicing rights retained by an approved
seller-servicer and also for the cost of bearing or otherwise managing any incremental
credit, market, operational, liquidity, or other risk associated with the cash window),
and on substantially the same pricing and other terms, any Single-Family Mortgage
Loan that:
(1) is of a class of Single-Family Mortgage Loans that Seller then
offers to acquire for Seller-guaranteed mortgage-backed securities or other non-
cash consideration;
(ii) is offered for sale to Seller by a seller that has been approved to do
business with Seller; and
(iii) | has been originated and sold in compliance with any underwriting
or other similar restrictions prescribed by Seller or the Agency;
(c) beginning on January 1, 2022, and thereafter, not acquire for cash
consideration from any single seller (together with its Affiliates and any other Persons
that it directly or indirectly controls, is controlled by, or is under common control
8
with) during any period comprising four calendar quarters Single-Family Mortgage
Loans with an unpaid principal balance in excess of $1.5 billion; and
(d) comply with any directives, regulations, restrictions, or other requirements
prescribed by the Agency that implement this Section 5.12 or otherwise relate to
equitable secondary market access by community lenders.
5.13. Multifamily Mortgage Purchase Activity.
(a) Seller shall not acquire more than $80 billion of Multifamily Mortgage
Assets in any 52-week period. The Agency shall adjust the dollar amount of the
limitation in the preceding sentence as of the end of each calendar year by a
percentage equal to the percentage increase or decrease in the Consumer Price Index
for Urban Wage Earners and Clerical Workers, as published by the Bureau of Labor
Statistics, during such calendar year, rounded to the nearest multiple of $1,000.
(b) Seller shall ensure that at least 50 percent of the Multifamily Mortgage
Assets acquired by Seller in any calendar year are, at the time of acquisition, classified
as mission-driven pursuant to the Agency’s guidelines for mission-driven multifamily
loans.
5.14. Acquisitions of Certain Loans.
(a) Seller shall not acquire a Single-Family Mortgage Loan if, following the
acquisition, more than 3 percent of Single-Family Mortgage Loans that result from
refinancing of an existing Single-Family Mortgage Loan, or 6 percent of Single-
Family Mortgage Loans that do not result from refinancing of an existing Single-
Family Mortgage Loan, in each case that have been acquired by Seller during the
preceding 52-week period, would have two or more of the following characteristics:
(1) the combined loan-to-value ratio at origination exceeds 90 percent;
(11) the ratio of the borrower’s total monthly obligations to total
monthly income at origination exceeds 45 percent; or
(111) the representative credit score produced from software developed
by Fair Isaac Corporation for the borrower at origination is lower
than 680 (or an equivalent credit score derived from a credit score
model validated and approved by Seller in accordance with 12 |
CFR § 1254.7).
(b) Seller shall limit its acquisitions of Single-Family Mortgage Loans
secured by either investment properties or second homes to not more than 7 percent of
the Single-Family Mortgage Loans acquired by Seller during the preceding 52-week
period.
(c) Subject to such exceptions as the Agency may prescribe to permit Seller to
acquire Single-Family Mortgage Loans that were eligible for acquisition as of January
14, 2021, Seller agrees to implement on or prior to July 1, 2021 a program reasonably
designed to ensure that each Single-Family Mortgage Loan acquired by Seller is:
9
(1) a qualified mortgage, as defined in 12 CFR § 1026.43(e)(2), (5),
(6), (7), or (£);
(11) | described in 12 CFR § 1026.43(a)(3);
(i111) | aSingle-Family Mortgage Loan secured by an investment
property, subject to Section 5.14(b);
(iv) arefinancing with streamlined underwriting in accordance with the
eligibility criteria for high loan-to-value refinancings set forth in
Seller’s Selling Guide;
(v) aSingle-Family Mortgage Loan with temporary flexibilities for
underwriting during times of exigent circumstances, as determined
in consultation with the Agency; or
(vi) aSingle-Family Mortgage Loan secured by a manufactured
housing.
5.15. Capital Covenant. Seller shall comply with the Enterprise Regulatory
Capital Framework disregarding any subsequent amendment or other modifications to
that rule.
IX. Commitment to Develop Proposal to Resolve Conservatorship
In order to ensure a path for Treasury to resolve its investment in the Enterprise in a manner that
fairly compensates taxpayers for the support they have provided and continue to provide,
Treasury, in consultation with the Agency, have begun work to establish a timeline and process
to terminate the conservatorship and raise capital, including identifying any necessary legislation
for reform of the Enterprise, and an analysis of the appropriate number of guarantors, including
whether there should be one or multiple guarantors. In order to facilitate the exit from
conservatorship, Treasury and the Enterprise commit to work to restructure Treasury’s
investment and dividend amount in a manner that facilitates the orderly exit from
conservatorship, ensures Treasury is appropriately compensated, and permits the Enterprise to
raise third-party capital and make distributions as appropriate. Treasury, in consultation with the
Agency, should endeavor to transmit a proposal that details this work to both Houses of
Congress on or prior to September 30, 2021.
[Remainder of page intentionally left blank]
10
, Sincerely,
Steven T. Mnuchin
Agreed and Accepted: :
Federal Home Loan Mortgage Corporation, by
Federal Housing Finance Agency, its Conservator
Mark A. Calabria
Director
11
your welcome Dax1
It is, but what can we do?
Jury Demand lawsuits
5) 13-1288 (1:13-mc-01288)
In re Fannie Mae/Freddie Mac Senior Preferred Stock Purchase Agreement
Class Action Litigations …. Common & Preferred, Class Action, Direct & Derivative, Jury Demand
21) 18-3478 (2:18-cv-03478)(2:18-cv-03478-NIQA)
Wazee Street Opportunities v. FHFA and Treasury ………Common, Class action, Derivative, Jury Demand
The damages declared are final and can’t be appealed, the problem however for FHFA is the domino effect, if the 3th is illegal and “for cause” is illegal, it will be replaced with “at will” if it is “at will” the agency is no longer independent and transformed into an executive agency, as it now needs to obey the president, then as executive agency you have the fiduciary duty to act in the best interest of the regulated conversatee, and no longer out of self interest so 12 U.S.C. § 4617(b)(2)(J(ii) needs to go, but if this ones goes, HERA suddenly needs to be transformed to a none executive power act, and all wishes it has in HERA (and those are lot) need to be deleted as the director of the FHFA can now only make decisions based on rules, not on wishes. As it no longer can act out of self-interest
That’s needs further explanation so let me give it a try, for now the FHFA is independent, and the director has executive power to demand basically everything he thinks needs to be done, or what he thinks should be done WITHOUT regulation, if the FHFA is no longer “Independent” due to “for cause” it is executive, and only can follow the rule of law, the president is in charge and the director of the FHFA had lost all his executive power to the president, and can ONLY act on the regulation already in place, he no longer is able to make ANY decision by himself alone, only if the law in place says so, so all the smart talk like “if the director demands” needs to be severed out of HERA, and “maybe” be replaced with market data upon which the director can take action if the value drop below a certain figure, but those calculations needs to be approved by congress first
This of course is only ONE of the problems they are facing, other problems are:
- A 4th amendment
- Consent Decree
- Congress approval on a commitment fee
- UMBS
- 41Billion of Washington Federal
- 11.000 (UN-)redacted documents
- 44 lawsuits, Specifically the Class action / Jury demand Lawsuits
- Double relief
- District court / Federal court
The SCOTUS judges can only answer the questions asked
these are the questions asked by Collins :
(1) Whether FHFA’s structure violates the separation of powers; and
(2) Whether the courts must set aside a final agency action that FHFA took when it was unconstitutionally structured and strike down the statutory provisions that make FHFA independent.
And since the case is consolidated with the Mnuchin case
These are the governments questions:
(3) Whether the statute’s anti-injunction clause, which precludes courts from taking any action that would “restrain or affect the exercise of powers or functions of the Agency as a conservator,” 12 U.S.C. 4617(f), precludes a federal court from setting aside the Third Amendment.
(4) Whether the statute’s succession clause (12 U.S.C. § 4617(b)(2)(A)(i)) —under which FHFA, as conservator, inherits the shareholders’ rights to bring derivative actions on behalf of the enterprises—precludes the shareholders from challenging the Third Amendment.
So in other words the SCOTUS will find:
1) is “For cause” legal (12 U.S.C. §4512(b)(2) Term)
2) should the 3th amendment or final action the FHFA took (the conservatorship) be set aside as it was an unconstitutional agengy by “for cause” and should it strike down 12 U.S.C. § 4511(a) Establishment
as a consequence the FHFA will become Executive with a “at will” removal head of the agency, and the 3th amendment needs to be severed from the PSPA, which makes the PSPA By 6.7 & 6.12 of the contract voidable for the FHFA-C and with fiduciary duties just reinstalled it will mean the end of the PSPA
3) 12 U.S.C. 4617(f) is illegal both ways, in an independent agency style, it precludes the courts, and as executive agency it precludes the court from taking action, so they either way have uncontrolled massive power and nobody is responsible in case of a mistake
4) 12 U.S.C. § 4617(b)(2)(A)(i)) does not prevent shareholders from challenging the Third Amendment , as otherwise the shareholder interests are not protected, any action they take that acts outside there statute can be challenged
as a consequence ,12 U.S.C. 4617(f) need to be severed from HERA and with that the fiduciary duty is back for shareholders, this action will probably be remanded for damages but the outcome in SCOTUS is a final ruling on the Merits
I Accumulated the information over the years and keep adding to it every time I see something, I found nothing was on the web that gave an overall picture of all lawsuits, so I decided to make it myself, so now it is a useful resource for anybody who wants know information about one of the lawsuits or all lawsuits at ones, 55 cases, 10 dismissed and none decided on the merits
Fannie Mae & Freddie Mac conservator Litigation, FNMA, FMCC updated Nov 24, 2020
(Control-F “#” for update)
1) 19-422 Patrick J Collins v. Mnuchin .… Common & Preferred, Derivative
2) 19-563 Mnuchin v. Patrick J Collins ……. Relates to all cases
COURT: SUPREME COURT of the United States
Judges: Roberts, Thomas, Breyer, Alito, Sotomayor, Kagan, Gorsuch, Kavanaugh, Barrett
https://www.scotusblog.com/case-files/cases/collins-v-mnuchin/
https://www.scotusblog.com/case-files/cases/mnuchin-v-collins/
Above 2 cases are consolidated, the related 3 cases are :
- 17-497 Rop v. Federal Housing Finance agency ……. Common & Preferred, Derivative
- 18-2506 Atif F. Bhatti vs. FHFA ………………………… Common & Preferred, Derivative
- 18-3478 Wazee Street Opportunities v. USA …… Common, Class action, Derivative
Collins Claim:
(1) Whether FHFA’s structure violates the separation of powers; and
(2) Whether the courts must set aside a final agency action that FHFA took when it was unconstitutionally structured and strike down the statutory provisions that make FHFA independent.
Collins identified the FHFA breached following statutory provisions by its actions:
a) 5 U.S.C. § 706(2)(C) hold unlawful and set aside agency action, findings, and conclusions found to be—in excess of statutory jurisdiction, authority, or limitations, or short of statutory right
b) 5 U.S.C. § 706(2)(A) hold unlawful and set aside agency action, findings, and conclusions found to be— arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law
And found following U.S. Codes have issues because of the actions FHFA have taken
c) 44 U.S.C. § 3502 (5) Term “independent agency” means the Board of Governors of the FHFA
d) 12 U.S.C. § 4511(a) Establishment
e) 12 U.S.C. § 4512(b)(2) Term (5th circuit found it violates the separation of powers)
f) 12 U.S.C. § 4516(f)(2) Not Government funds
g) 12 U.S.C. § 4617(a) HERA empowered FHFA to appoint itself as the conservator
h) 12 U.S.C. § 4617(f) Limitation on court action (anti-injunction clause)
i) 12 U.S.C. § 4617(b)(2)(D) put in sound and solvent condition; and preserve and conserve
j) 12 U.S.C. § 4617(b)(2)(A)(i) General powers (succession clause)
http://www.supremecourt.gov/DocketPDF/19/19-422/116983/20190925131502103_Collins%20Petition--PDFA.pdf
Mnuchin claims:
(1) Whether the statute’s anti-injunction clause, which precludes courts from taking any action that would “restrain or affect the exercise of powers or functions of the Agency as a conservator,” 12 U.S.C. 4617(f), precludes a federal court from setting aside the Third Amendment.
(2) Whether the statute’s succession clause (12 U.S.C. § 4617(b)(2)(A)(i)) —under which FHFA, as conservator, inherits the shareholders’ rights to bring derivative actions on behalf of the enterprises—precludes the shareholders from challenging the Third Amendment.
According to the Government it has following U.S. Codes that allowed them to implement the NWS
a) 12 U.S.C. § 4617(f) Limitation on court action (anti-injunction clause)
b) 12 U.S.C. § 4617(b)(2)(A)(i) General powers (succession clause)
c) 12 U.S.C. § 4617(b)(2)(B) Operate the regulated entity
d) 12 U.S.C. § 4617 Authority over critically undercapitalized regulated entities
e) 12 U.S.C. § 4617(b)(2)(D) put in sound and solvent condition; and preserve and conserve
http://www.supremecourt.gov/DocketPDF/19/19-563/120380/20191025201313249_Mnuchin%20FINAL.pdf
July 9, 2020 The U.S. Supreme Court granted the Collins Plaintiffs’ and the government’s petitions to review the Fifth Circuit’s decision that state, APA claims are barred by 12 U.S.C. § 4617(f), and REMAND declaring the “for cause” 12 U.S.C. § 4512(b)(2) violates the Constitution’s separation-of-powers principles.
Aug 17, 2020 - Aaron Nielson, Esquire, of Provo, Utah, is invited to brief and argue, as amicus curiae, in support of the position that the structure of the Federal Housing Finance Agency does not violate the separation of powers
Aug 18, 2020 - Mnuchin, et al., shall file an opening brief on the questions presented by the petition in No. 19-563, limited to 13,000 words, by Monday, August 17, 2020 Collins, et al., shall file a consolidated response in No. 19-563 and opening brief in No. 19-422, limited to 20,000 words, by Wednesday, September 16, 2020. That brief shall bear a light red cover. The Court-appointed amicus curiae shall file a brief, limited to 13,000 words, by Friday, October 16, 2020. That brief shall bear a dark green cover. Mnuchin, et al., shall file a consolidated reply and response brief, limited to 13,000 words, by Friday, October 23, 2020. Collins, et al., shall file a consolidated reply and response brief to brief of Court-appointed amicus curiae, limited to 6,000 words, by Monday, November 23, 2020. That brief shall bear a tan cover. The brief of any amicus curiae in support of Collins, et al., or in support of neither set of parties, shall be filed by Wednesday, September 23, 2020. Those briefs shall bear a light green cover. The brief of any amicus curiae in support of Mnuchin, et al., or in support of Court-appointed amicus curiae, shall be filed by Friday, October 30, 2020. Those briefs shall bear a dark green cover
- Mnuchin, filed an opening brief by Monday, August 17, 2020 http://www.supremecourt.gov/DocketPDF/19/19-422/150469/20200817200402203_19-563tsUnitedStates.pdf
- Collins, shall file a response by Wednesday, September 16, 2020
- Aaron Nielson (amicus curiae) shall file a brief, by Friday, October 16, 2020
- Mnuchin, et al., shall file a reply and response brief, by Friday, October 23, 2020
- Collins, shall file a reply to amicus curiae, by Monday, November 23, 2020.
- Aaron Nielson amicus curiae in support of Collins, et al., or in support of neither set of parties, shall be filed by Wednesday, September 23, 2020
- Aaron Nielson (amicus curiae) in support of Mnuchin, et al., or in support of Court-appointed amicus curiae, shall be filed by Friday, October 30, 2020
- documents available at: https://www.supremecourt.gov/Search.aspx?FileName=/docket/docketfiles/html/public\19-422.html
Sep 16, 2020 SET FOR ARGUMENT on Wednesday, December 9, 2020
Oct 8, 2020 Record requested from the U.S.C.A. 5th Circuit
#Oct 16, 2020 Aaron L. Nielson’s Brief For Court-Appointed Amicus Curiae
#Oct 23, 2020 Federal Parties delivered their brief to the U.S. Supreme Court: conclusion The judgment of the court of appeals should be re-versed as to the statutory claim and affirmed as to the constitutional claim. In other words Treasury agrees “For cause” is illegal and
12 U.S.C. § 4617(f) Limitation on court action (anti-injunction clause)
12 U.S.C. § 4617(b)(2)(A) Incidental powers (succession clause)
Are legal, but the 3th amendment are not within the powers of the FHFA so cannot be declared legal on these statuary provisions as it is anti “conserve and preserve”
#Nov 19, 2020 Reply Brief Of Patrick J. Collins
#for Dec 9, 2020 the oral argument in SCOTUS are allotted as follows:
35 minutes for the Acting Solicitor General
15 minutes for the Court-appointed amicus curiae
40 minutes for Patrick Collins, et al.
3) (13-1025) (1:13-cv-01025-RCL), 14-5243)
Perry Capital LLC v. Jacob Lew …… Common & Preferred, Derivative
CLAIM: Derivative APA, 3th amendment
District Court, District of Columbia
Judge: Royce C. Lamberth
https://www.courtlistener.com/docket/4212073/perry-capital-llc-v-lew/
https://www.courtlistener.com/docket/3054444/perry-capital-llc-v-jacob-lew/
Court of Appeals for the D.C. Circuit
On appeal before Judge: Brown, Millett, Ginsburg
Consolidated with:
1:13-cv-01053, 14-5254(Fairholme)
1:13-cv-01439, 14-5260 (Arrowood),
1:13-cv-01288, 14-5262 (In re: Fannie Mae/Freddie Mac Senior)
Feb 21, 2017 following claims are remanded to the district court for further proceedings.
a) breach of contract and breach of the implied covenant of good faith and fair dealing regarding liquidation preferences
b) and the claim for breach of the implied covenant with respect to dividend rights, which claims we remand (to Lamberth) for further proceedings consistent with this opinion
c) it also found We hold that the stockholders’ statutory claims are barred by the Recovery Act’s strict limitation on judicial review. See 12 U.S.C. § 4617(f).
d) claims against FHFA and the Companies, some are barred because FHFA succeeded to all rights, powers, and privileges of the stockholders under the Recovery Act, id. § 4617(b)(2)(A)
https://www.govinfo.gov/content/pkg/USCOURTS-caDC-14-05243/pdf/USCOURTS-caDC-14-05243-1.pdf
July 1, 2020 complete fact discovery by January 22, 2021, trial date is set May 16, 2022
4) 13-1053 (14-5254) (1:13-cv-01053)
Fairholme Fund, Inc. v. FHFA……Preferred, Direct & Derivative
Honorable: Royce C. Lamberth
Claim: 3th amendment, breach of fiduciary duty, breach of contract, breach of the implied covenant of good faith and fair dealing
District Court for the District of Columbia
https://www.courtlistener.com/docket/4212077/fairholme-funds-inc-v-federal-housing-finance-agency/
July 12, 2019 Request For Production of documents (RFP) Treasury should produce (page 39-46)
https://gselinks.com/wp-content/uploads/2019/07/13-cv-01053-103.pdf
Nov 18, 2019 RFPs 1-8, 10-14, 15(a)-(d), 16-26, and 29-30. Granted, Treasury should produce these documents
https://www.courtlistener.com/recap/gov.uscourts.dcd.160910/gov.uscourts.dcd.160910.112.0.pdf
July 1, 2020 complete fact discovery by January 22, 2021, trial date is set May 16, 2022
5) 13-1288 (1:13-mc-01288)
In re Fannie Mae/Freddie Mac Senior Preferred Stock Purchase Agreement
Class Action Litigations …. Common & Preferred, Class Action, Direct & Derivative, Jury Demand
Honorable: Royce C. Lamberth
District Court for the District of Columbia
Direct claim, breaches of contract, breaches of the implied
covenant of good faith and fair dealing, breaches of fiduciary duties,
and violations of Delaware and Virginia law governing dividends
If the Direct claims are denied it also claims these Derivative: breaches of fiduciary duty, compensatory damages and disgorgement, breached the terms of the certificates of designation and the implied covenant of good faith and fair dealing, appropriate equitable and injunctive relief to remedy breaches of contract, breaches of the implied covenant of good faith and fair dealing, breaches of fiduciary duty, and violations of Delaware and Virginia Corporate law, including rescission of the Third Amendment. https://www.courtlistener.com/recap/gov.uscourts.dcd.163155/gov.uscourts.dcd.163155.71.0.pdf
https://www.courtlistener.com/docket/4212341/in-re-fannie-maefreddie-mac-senior-preferred-stock-purchase-agreement/
The Class:
6) N. Bradford Isbell ....... Common
7) Michelle M. Miller ...... Common
8) Charles Rattley ………… Common
9) Timothy J. Cassell ...... Common
10) 111 John Realty Corp… Preferred
11) United Equities Commodities Com ….. Preferred
12) 1:13-cv-01149 Joseph Cacciapalle ..... Preferred
13) 1:13-cv-01421 Marneu Holdings, Co .. Preferred
14) 1:13-cv-01169 American European Insurance Co ... Preferred
15) 1:13-cv-01443 Barry P. Borodkin ....... Preferred
16) 1:13-cv-01094 Mary Meiya Liao ....... Preferred
July 1, 2020 complete fact discovery by January 22, 2021, trial date is set May 16, 2022
17) 13-1439 (1:13-cv-01439)
Arrowood Indemnity Company v. Fannie Mae……Preferred, Direct & Derivative
Honorable: Royce C. Lamberth
Claim: 3th amendment, breach of fiduciary duty, breach of contract, breach of the implied covenant of good faith and fair dealing
District Court for the District of Columbia
https://www.courtlistener.com/docket/6995674/arrowood-indemnity-company-v-federal-national-mortgage-association/
July 1, 2020 complete fact discovery by January 22, 2021, trial date is set May 16, 2022
18) 16-3113 (4:16-cv-03113)( 17-20364)
Patrick J Collins v. FHFA-C, FHFA, and Treasury …………………….…Common & Preferred, Derivative
Honorable: Judge Nancy F Atlas
District Court, S.D. Texas
Claim: “for cause” separation of powers §?4512(b)(2)
1) are not in accordance with and violate HERA within the meaning of 5 U.S.C. § 706(2)(C)
2) that Treasury acted arbitrarily and capriciously within the meaning of 5 U.S.C. § 706(2)(A)
3) by executing the Net Worth Sweep, and that FHFA’s structure violates the separation of powers
https://www.courtlistener.com/docket/4533994/collins-v-lew/
Court of Appeals for the Fifth Circuit:
Before Judge Stewart, Haynes and Willett
https://www.courtlistener.com/docket/6179579/patrick-collins-v-steven-mnuchin-secretary/
July 16, 2018 Conclusion 5th circuit:
We AFFIRM the district court’s order granting the Agencies’ motions to dismiss the Shareholders’ APA claims because such claims are barred by 12 U.S.C. § 4617(f).(no court may take any action)
We REVERSE the district court’s order granting the Agencies’ motion for summary judgment regarding the Shareholders’ claim that the FHFA is unconstitutionally structured in violation of Article II and the Constitution’s separation of powers, and we REMAND to the district court with instructions to enter judgment declaring the “for cause” limitation on removal of the FHFA’s Director found in 12 U.S.C. § 4512(b)(2) violates the Constitution’s separation-of-powers principles.
The 5th circuit remanded this back to Judge Nancy F Atlas in District Court, S.D. Texas
http://www.ca5.uscourts.gov/opinions/pub/17/17-20364-CV0.pdf
https://www.courtlistener.com/pdf/2018/07/16/patrick_collins_v._steven_mnuchin_secretar.pdf
Sept 25, 2019 Petition filed in SCOTUS see 19-422
19) 17-497 (1:17-cv-00497) 20-2071
Rop v. Federal Housing Finance agency and Treasury…….Common & Preferred, Derivative
Honorable: Paul Lewis Maloney
District Court, W.D. Michigan
Claim: voiding 3th amendment & “for cause” and striking down HERA’s:
12 U.S.C. § 4511(a) Establishment
12 U.S.C. § 4512(b)(2) Term (5th circuit found it violates the separation of powers)
12 U.S.C. § 4617(a)(7) Agency not subject to any other Federal agency
https://www.courtlistener.com/docket/13521280/rop-v-federal-housing-finance-agency/
Sept 27, 2019 Notice of supplemental authority concerning Collins v. Mnuchin 17-20364
Michael Rop: http://www.glenbradford.com/wp-content/uploads/2019/09/17-cv-00497-0060.pdf
FHFA: http://www.glenbradford.com/wp-content/uploads/2019/09/17-cv-00497-0063.pdf
Treasury: http://www.glenbradford.com/wp-content/uploads/2019/09/17-cv-00497-0064.pdf
July 14, 2020 FHFA advises Count I and Count II in Collins are identical to the Rop lawsuit
Count I Rop: Violation of the President’s Constitutional Removal Authority Against FHFA as Both Regulator and Conservator and Treasury
Count II Rop: Violation of the Separation of Powers Against FHFA as Both Regulator and Conservator and Treasury http://www.glenbradford.com/wp-content/uploads/2020/07/17-cv-00497-0065.pdf
Sept 8, 2020 very strange ruling by judge Maloney:
“Plaintiffs’ amended complaint fails to state a claim. Accordingly, the Court will grant Defendants’ motions to dismiss on that basis.” While it already was decided by the 5th circuit 12 U.S.C. § 4512(b)(2) the term violated the constitution, obviously some precedents were ignored in this case, as it was already acknowledged on Sept 27, 2019 by the 5th circuit and later confirmed by the FHFA,
#Oct 30, 2020 on appeal in the Sixth Circuit, If the appellant's principal brief is filed late, the
case is at risk of being dismissed for want of prosecution.
Appellant's (Rop) Principal Brief Due by December 9, 2020
Appellee's (FHFA) Principal Brief Due by January 8, 2021
Appellant's (Rop) Reply Brief is due 21 days after the last appellee brief (Optional Brief)
#Nov 2, 2020 Mediation Conference planned for December 2, 2020 at 9:30 am ET
#Nov 17, 2020 Mediation Conference planned for December 2, 2020 is Cancelled
20) 18-2506 (17-2185) (0:17-cv-02185)
Atif F. Bhatti vs. FHFA and Treasury ……………Common & Preferred, Derivative
Honorable: Patrick Joseph Schiltz
District Court, D. Minnesota
Claim: 3th amendment & “for cause” striking down Hera’s provisions:
12 U.S.C. § 4511(a) Establishment
12 U.S.C. § 4512(b)(2) Term (5th circuit found it violates the separation of powers)
12 U.S.C. § 4617(a)(7) Agency not subject to any other Federal agency
12 U.S.C. § 4617(f) Limitation on court action (anti-injunction clause)
https://www.courtlistener.com/docket/7379258/bhatti-v-federal-housing-finance-agency-the/
On appeal in the 8th circuit, Oral Argument 10/15/2019
http://media-oa.ca8.uscourts.gov/OAaudio/2019/10/182506.MP3
https://www.courtlistener.com/audio/65849/atif-bhatti-v-federal-housing-finance-agency/
(The court strives to issue the opinion within 90 days after oral
Argument or submission to a nonargument panel. http://media.ca8.uscourts.gov/newrules/coa/iops06-19update.pdf)
July 14, 2020 Bhatti advices the USCA court it can no longer be credibly argued that FHFA’s structure is constitutional.
21) 18-3478 (2:18-cv-03478)(2:18-cv-03478-NIQA)
Wazee Street Opportunities v. FHFA and Treasury ………Common, Class action, Derivative, Jury Demand
Honorable: Nitza I Quinones Alejandro
District Court, E.D. Pennsylvania
Claim: 3th amendment & “for cause” striking down Hera’s provisions:
12 U.S.C. § 4511(a) Establishment
12 U.S.C. § 4512(b)(2) Term (5th circuit found it violates the separation of powers)
12 U.S.C. § 4617(a)(7) Agency not subject to any other Federal agency
12 U.S.C. § 4617(f) Limitation on court action (anti-injunction clause)
https://www.courtlistener.com/docket/7681282/wazee-street-opportunities-fund-iv-lp-v-the-federal-housing-finance-agency/
Oct 3, 2019 Waiting on Collins, document 38 Supplemental authority filed by Defendant ….. in the matter of Collins v. Mnuchin, No. 17-20364, now 19-422 / 19-563)
July 15, 2020 FHFA advices Counts I and II Wazee are identical to the separation of powers in Collins
Counts I Wazee: Violation Of The President's Constitutional Removal Authority Against FHFA, As Regulator And Conservator, And Treasury
Counts II Wazee: Violation Of The Separation Of Powers Against FHFA, As Regulator And Conservator, And Treasury
http://www.glenbradford.com/wp-content/uploads/2020/07/18-cv-03478-0042.pdf
https://gselinks.com/wp-content/uploads/2018/08/18-cv-03478-0001-Complaint-8-20-18.pdf
July 20, 2020 judge Alejandro advices it keeps on staying after 9 months ~Until - Set/Clear Flags AND Suspense Order
Aug 17, 2020 Remark
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Cases in the U.S. Court of Federal Claims (Sweeney)
--------------------------------------------------------------------------
22) 2020-1912 2020-1914 (20-121) (20-122) (2020-121)(2020-122) (13-465C) (1:13-cv-00465) (17-1122)(17-104)
Fairholme Funds, Inc. v. United States………..Common & Preferred, Direct & Derivative
Honorable: Margaret M. Sweeney
United States Court of Federal Claims
https://www.courtlistener.com/docket/4198608/fairholme-funds-inc-v-united-states/
Claim: SEALED 413 AMENDED COMPLAINT (Entered: 03/08/2018)
Redacted version without coercion attacks available at:
https://www.docketbird.com/court-documents/Fairholme-Funds-Inc-et-al-v-USA/REDACTED-DOCUMENT-filed-by-ACADIA-INSURANCE-COMPANY-ADMIRAL-INDEMNITY-COMPANY-ADMIRAL-INSURANCE-COMPANY-ANDREW-T-BARRETT-BERKLEY-INSURANCE-COMPANY-BERKLEY-REGIONAL-INSURANCE-COMPANY-CAROLINA-CASUALTY-INSURANCE-COMPANY-CONTINENTAL-WESTERN-INSURANCE-CO/cofc-1:2013-cv-00465-00422
#Related Cases In The United States Court Of Appeals For The Federal Circuit
#20-1912 Fairholme Funds, Inc. v. U.S.
#20-1914 Fairholme Funds, Inc. v. U.S.
#20-1934 Owl Creek Asia I, L.P. v. U.S.
#20-1936 Mason Capital L.P. v. U.S.
#20-1938 Akanthos Opportunity Fund L.P. v. U.S.
#20-1954 Appaloosa Investment Limited Partnership I v. U.S.
#20-1955 CSS, LLC v. U.S.
#20-2020 Arrowood Indemnity Company v. U.S.
#20-2037 Cacciapalle v. U.S.
#20-2190 Washington Federal v. U.S.
#Related cases pending in the Court of Federal Claims
#13-608C Fisher v. U.S.
#14-152C Reid v. U.S.
#14-740C Rafter v. U.S.
http://www.glenbradford.com/wp-content/uploads/2020/10/20-2020-0020.pdf
March 9, 2020 the interlocutory appeal was granted the
CFC identified six “controlling questions of law” raised by its order, the first three of
which pertain to the CFC’s decision to dismiss Petitioners’ direct claims:
(1) Whether the court lacks subject-matter jurisdiction over plaintiffs’ direct
claims for breach of fiduciary duty and breach of implied-in-fact contracts.
(2) Whether plaintiffs who purchased stock in Fannie and Freddie after the
PSPA amendments lack standing to pursue their direct claims.
(3) Whether plaintiffs lack standing to pursue their self-styled direct claims
because those claims are substantively derivative in nature.
The last three controlling questions identified by the CFC related to its decision
to deny the motion to dismiss Petitioners’ derivative claims:
(4) Whether plaintiffs have standing to assert derivative claims notwithstanding HERA’s succession clause. 12 U.S.C. § 4617(b)(2)(A)(i) (Fairholme & Fisher)
(5) Whether the [FHFA-as-conservator’s] actions are attributable to the United States such that the court possesses subject-matter jurisdiction to entertain plaintiffs’ derivative takings and illegal exaction claims. (Fairholme & Fisher)
(6) Whether plaintiffs’ allegations that the FHFA entered into an implied-in-fact contract with the Enterprises to operate the conservatorships for shareholder benefit fail as a matter of law.
http://www.glenbradford.com/wp-content/uploads/2020/03/20-121-0002.pdf
April 7, 2020 TRANSCRIPT of proceedings held on March 5, 2020 before Chief Judge Margaret M. Sweeney. Total No. of Pages: 1-77. Available at: https://www.docketbird.com/court-cases/Fairholme-Funds-Inc-et-al-v-USA/cofc-1:2013-cv-00465 for $3.99
June 18, 2020 IT IS ORDERED THAT:
(1) The petitions are granted. This case is transferred to the regular docket. The appeals will be consolidated. Fairholme’s appeal will be designated as the lead appeal, and the government’s appeal will be designated as a cross-appeal. Fairholme’s opening brief is due within 60 days of the date of filing of this order (Aug 18, 2020)
(2) Owl Creek’s motion is granted to the extent that the amicus brief is accepted for filing. Any request for fur-ther relief from the court should be made after docketing.
July 31, 2020 - The United States respectfully requests that this Court hold this appeal and
cross-appeal and several companion appeals in abeyance until the Supreme Court
issues its decision in Mnuchin v. Collins, No. 19-563, and Collins v. Mnuchin, No. 19-422
(collectively, Collins)
Aug 5, 2020 ORDER Upon consideration of the appellants’ unopposed mo-tion to extend by 36 days, to September 22, 2020, the time to file their opening brief,
Aug 10, 2020 Fairholme Plaintiffs take no position on the Government’s motion to hold the appeals in abeyance
Aug 29, 2020 The motions to stay are denied
Sept15, 2020 The appellants related appeals submit a motion to modify the briefing schedule and to permit a modified briefing procedure. Upon consideration thereof, IT IS ORDERED THAT:
The briefing schedules are stayed pending the court’s disposition of the motions
#Oct 5, 2020 Order:
the appellants to file their opening briefs October 23, 2020
the government’s response/principal brief is due no later than January 11, 2021;
the appellants’ reply brief is due no later than February 5, 2021
the government’s reply brief in Appeal No. 2020-1914 is due no later than March 5, 2021
#Oct 30, 2020 Brief Of Amici Curiae Bryndon Fisher, Bruce Reid, And Erick Shipmon In Support Of Neither Party Filed
The following List Of Fannie Mae and Freddie Mac Shareholder Suits are Pending
23) 13-496C American European Insurance.…. Preferred, Class Action, Direct
https://www.courtlistener.com/docket/4198611/american-european-insurance-company-v-united-states/
24) 13-542C Francis J. Dennis ………………….…. Preferred
March 27, 2020 above 3 Plaintiff’s think none of their counts should be dismissed
25) 20-2190 2020-2190 (13-385C) (1:13-cv-00385)
Washington Federal v. United States . Common & Preferred, Class Action, Direct*
https://www.courtlistener.com/docket/4198605/washington-federal-v-united-states/
April 2, 2020 Plaintiff argues None of the claims in Fairholme apply to their case
April 16, 2020 the government thinks:
A) Fannie Mae And Freddie Mac Shareholders Lack Standing To Assert Substantively-Derivative Claims As Direct Claims
B) The Court Lacks Jurisdiction To Review The Merits Of The Enterprises’ Placement In Conservatorship
C) The Washington Federal Plaintiffs May Not Pursue Derivative Claims
July 9, 2020 The court must dismiss plaintiffs’ claims for lack of standing, If plaintiffs had asserted derivative claims in their amended complaint, the “conflict of interest” holding in First Hartford would have aided plaintiffs in their quest to establish standing. But they did not do so, Opinion and order:
https://www.courtlistener.com/recap/gov.uscourts.uscfc.28070/gov.uscourts.cofc.28070.100.0.pdf
Aug 17, 2020 Washington Federal filed a notice of appeal
Aug 24, 2020 WF to file its opening brief on or before Oct. 20, 2020
#Oct 23, 2020
The appellants (WF) opening brief is due no later than November 19, 2020
The appellee’s (US) brief is due no later than January 19, 2021
The appellants’ (WF) reply brief is due no later than February 18, 2021.
#Nov 19, 2020 Appellants’ Principal Brief (Nonconfidential)
26) 13-608C Bryndon Fisher (FNMA) .........….. Common Derivative*
https://www.courtlistener.com/docket/4198614/fisher-v-united-states/
June 11, 2020 interlocutory appeal process Granted on following
(1) Whether plaintiffs have standing to assert derivative claims notwithstanding HERA’s succession clause. 12 U.S.C. § 4617(b)(2)(A)(i) (Question 4 in Fairholme)
(2) Whether the FHFA-C’s actions are attributable to the United States such that the court possesses subject-matter jurisdiction to entertain plaintiffs’ derivative takings and illegal exaction claims. (Question 5 in Fairholme)
27) 14-152C Bruce Reid (FMCC) …………………… Common Derivative*
https://www.courtlistener.com/docket/7737030/reid-v-united-states/
May 18, 2020 Fisher/Reid file motion to certify interlocutory appeal
May 19, 2020 Fisher: the court DENIES defendants motion to dismiss continues to stay and denies motion to lift the stay (doc74)
June 4, 2020 Fairholme plaintiffs’ amicus brief in support of neither party
June 25, 2020 Plaintiffs delivered their petition to the Federal Circuit asking to pursue interlocutory appeal
28) 13-672C Erick Shipmon……..…………………… Common Derivative
https://www.courtlistener.com/docket/4198615/shipmon-v-united-states/
March 27, 2020 above 3 Plaintiff’s think their claim is substantially the same as Fairholme’s
Aug 21, 2020 (Judges O’MALLEY, BRYSON, and TARANTO) Under the express language of § 1292(d)(2), this court has “discretion” whether to “permit an appeal” under the provision.
IT IS ORDERED THAT:
The petitions for permission to appeal are denied with-out prejudice to seeking leave to participate in Fairholme Funds, Inc. v. United States, Nos. 2020-1912, -1914, as amici.
29) 20-2020 (13-698C) Arrowood Indemnity Company ….. Preferred Direct*
https://www.courtlistener.com/docket/17277778/arrowood-indemnity-company-v-united-states/
April 6, 2020 Plaintiff’s think none of the Fairholme counts apply to their case
May 15, 2020 the court dismisses plaintiffs’ claims because it lacks jurisdiction to entertain their fiduciary duty and implied-in-fact-contract claims, and plaintiffs lack standing to pursue any of their claims. The court therefore GRANTS defendant’s motion to dismiss. https://www.courtlistener.com/recap/gov.uscourts.uscfc.28858/gov.uscourts.cofc.28858.69.0_1.pdf
Appeal filed in U.S. Court of Appeals, Federal Circuit
July 22, 2020 Filing 1 Appeal docketed. Received: 06/29/2020. [709375] Entry of Appearance is due 08/05/2020. Certificate of Interest is due on 08/05/2020. Docketing Statement is due 08/21/2020. Appellant's brief is due 09/21/2020. [JAL] [Entered: 07/22/2020 04:26 PM] https://dockets.justia.com/docket/circuit-courts/cafc/20-2020
#Aug 4, 2020 Filing 6 MOTION of Appellee US to stay appeal
#Aug 27, 2020 Filing 11 ORDER filed, denying the motions to stay.
# Sept 15, 2020 Filing 13 ORDER staying the briefing schedules pending the court's disposition of the motions. Service as of this date by the Clerk of Court
#Sept 21, 2020 Opening brief filed
#Oct 23, 2020 Supplemental Opening Brief Filed
30) 14-740C Louise Rafter .........…………………. Common Direct & Derivative*
https://gselinks.com/Court_Filings/Rafter/14-740-0027.pdf
March 31, 2020 plaintiff continue to stay until 21 days following resolution of Fairholme
31) 20-2037 (13-466C) Joseph Cacciapalle ………..………… Preferred, Class Action, Direct*
Class: Melvin Bareiss, Bryndon Fisher, Bruce Reid, Erick Shipmon,
American European Insurance Company, Francis J. Dennis,
32) 20-1934 (18-281C) Owl Creek Asia I L.P...........………. Preferred, Direct *
33) 20-1938 (18-369C) Akanthos Opportunity Master Fund .. Preferred, Direct *
34) 20-1954 (18-370C) Appaloosa Investment .........……. Preferred, Direct *
35) 20-1955 (18-371C) CSS LLC ……………………………………. Preferred, Direct *
36) 20-1936 (18-529C) Mason Capital L.P...........………….. Preferred, Direct *
https://www.courtlistener.com/docket/4198610/cacciapalle-v-united-states/
July 17, 2020 hereby appeals to the United States Court of Appeals for the Federal Circuit from the Opinion and Order [ECF No. 105] and Judgment [ECF No. 106]
June 26, 2020 The court lacks jurisdiction to entertain plaintiffs’ judicial takings claim and their fiduciary duty claim. Further, plaintiffs lack standing to bring their contract claims due to the absence of privity (relation between two parties that is recognized by law) with the United States, and lack standing to bring their nominally direct takings, illegal-exaction, and fiduciary duty claims because the nature of these claims is derivative, not direct. The court therefore GRANTS defendant’s motion to dismiss
https://www.courtlistener.com/recap/gov.uscourts.uscfc.28232/gov.uscourts.cofc.28232.105.0.pdf
March 26, 2020 above 5 plaintiffs don’t want to give up the direct claims and doubt the counts in Fairholme properly represent their counts, and point out the law was breached
June 8, 2020 the court DISMISSES plaintiff’s complaint because the court lacks jurisdiction to entertain its fiduciary duty and implied-in-fact-contract claims, and plaintiff lacks standing to pursue any of its claims. https://ecf.cofc.uscourts.gov/cgi-bin/show_public_doc?2018cv0369-60-0
June 8, 2020 again a very damaging ruling for the government but still the case is dismissed as: (FHFA can) “take any action authorized by [12 U.S.C. § 4617(b)),
which (it) determines is in the best interest of the (Enterprise) or the (FHFA)(Itself) .”
http://www.glenbradford.com/wp-content/uploads/2020/06/18-00281-0064.pdf
U.S. Court of Appeals, Federal Circuit
July 28, 2020 assigned case No. 2020-2037 to the proceeding, and set Sept. 22, 2020, as the deadline to file its opening brief
Aug 10, 2020 Plaintiffs’ Combined Opposition To Motion To Hold Appeals In Abeyance:
“There is no just basis for delaying them any further”
Oct 5, 2020 Sweeney ordered following schedule :
October 23, 2020 to file their opening briefs
January 11, 2021 government’s response/principal brief is due no later than
February 5, 2021 the appellants’ reply brief is due no later than
March 5, 2021 and the government’s reply brief in Appeal No. 2020-1914 is due
37) 18-1124C Wazee Street……………….………… Common, Class Action, Direct & Derivative
38) 18-1150C Highfields Capital………………….. Common & Preferred, Direct
https://www.pacermonitor.com/public/case/25303845/HIGHFIELDS_CAPITAL_I_LP_et_al_v_USA Related To: Fairholme, Arrowood, Cacciapalle, 13-469, Dennis, Wazee Street, Fisher, Shipmon, Reid, Rafter, Owl Creek, Appaloosa, Akanthos, Css, Mason, 683 Cap. Partners, Patt
39) 18-711C 683 Capital Partners………..……….. Common, Preferred, Direct
40) 18-712C Joseph S. Patt………………………..… Preferred, Direct
41) 18-1226C Perry Capital LLC……………………. Common & Preferred, Direct & Derivative
42) 18-1155C CRS Master Fund LP…..…………… Preferred, Direct
Above 6 Plaintiffs are staying
43) 18-1240C Quinn Opportunities Master LP … Preferred, Direct
May 19, 2020 - Status unknown
44) 20-737C Joshua J. Angel v United States Treasury ….. Preferred, Direct, Class action
June 8, 2020 complaint filed, prayer for relief: Award $16 billion in compensatory damages to the Class against Treasury; C, Award prejudgment and post-judgment interest on those compensatory damages
Aug 18, 2020 Defendant’s Motion To Dismiss Pro Se Complaint: the Court should dismiss Mr. Angel’s complaint for lack of subject matter jurisdiction or, in the alternative, for failure to state claims upon which relief can be granted
Sept 9, 2020 After meeting and conferring, the parties agreed that the deadline for Plaintiff to oppose Defendant’s motion to dismiss should be extended until September 30, 2020 (a 15 day extension)
Sept 17, 2020 plaintiff filed an opposed motion for a stay of briefing on defendant’s motion to dismiss Accordingly, the court SUSPENDS briefing on defendant’s motion to dismiss until further order of the court. Briefing of plaintiff’s motion shall proceed pursuant to the rules of the court
#Oct 27, 2020 The clerk is directed to STAY this case until further order of the court. The parties shall FILE a joint status report within thirty days of the Collins decision proposing further proceedings in this matter
* Jones Days plaintiffs
---------------------------------------------------------------------------------
The Cases below are dismissed (without a ruling on merit)
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45) 19-7062 (1:18-cv-01142) (18-1142)
Joshua J. Angel v. BOD of FNMA,FMCC & FHFA-C ….….Preferred, Direct
Previously assigned to: Honorable: Royce C. Lamberth
https://www.courtlistener.com/docket/6880882/angel-v-federal-home-loan-mortgage-corporation/
Claim: Breach of quarterly BOD duties, breach of contract, breached the implied covenant of good faith and fair dealing, breach of contractual rights for dividends, Breach of implicit guaranty on Junior Preferred dividends
District Court for the District of Columbia
https://www.courtlistener.com/docket/26534/joshua-angel-v-federal-home-loan-mortgage-co/
On appeal Judges Henderson, Griffith and Wilkins decided Mr. Angel’s appeal without oral argument
They decided april 24, 2020: “We affirm. The district court properly dismissed Angel’s initial complaint as time-barred.” “ ORDERED and ADJUDGED that the decision of the district court be AFFIRMED”
CASE LOST ON: STATUTE OF LIMITATIONS
http://www.glenbradford.com/wp-content/uploads/2020/04/19-7062-1839674.pdf
46) Arnetia Robinson v. Fed. Housing Fin. Agency (6th Cir. 2017)
(15-109, 7:15-cv-00109, 7:15-cv-109, 16-6680 )
CLAIM: Derivative, APA 3th amendment
District Court, E.D. Kentucky
Judge: Karen K. Caldwell
https://www.courtlistener.com/docket/4510286/robinson-v-federal-housing-finance-agency/ ??
On appeal before judge: Batchelder, Gibbons, and Cook
https://www.courtlistener.com/opinion/4445969/arnetia-robinson-v-fed-housing-fin-agency/
CASE LOST ON: HERA (“Congress is the proper governmental body to address poor legislative decisions” )
https://www.courtlistener.com/opinion/4445969/arnetia-robinson-v-fed-housing-fin-agency/
47) David J. Voacolo V. Federal National Mortgage Association (D.N.J. 2017)
(1:16-cv-01324)(16-1324)(17-5667)
https://www.courtlistener.com/docket/4214876/voacolo-v-federal-national-mortgage-association-fannie-mae/
District Court, D. New Jersey,
CLAIM: Derivative & Direct, APA 3th amendment, Damages (shares would have value of $35.- as of Aug-2017) https://gselinks.com/Court_Filings/Voacolo2/17-cv-05667-0001.pdf
Judge: Rudolph Contreras
On appeal https://www.courtlistener.com/docket/6354770/voacolo-v-fannie-mae/
Judge: Brian R. Martinotti
CASE LOST ON: Voacolo’s failure to oppose the motion
https://gselinks.com/Court_Filings/Voacolo2/17-cv-05667-0020.pdf
48) Saxton v. Federal Housing Finance Agency (N.D. Iowa 2015)
(15-0047) (1:15-cv-00047)(17-1727)
CLAIM: Derivative & Direct, APA 3th amendment, Damages
District Court, N.D. Iowa
Judge: Linda R. Reade
https://www.courtlistener.com/docket/5391361/saxton-v-federal-housing-finance-agency/
On appeal before judge: Benton, Kelly, and Stras
CASE LOST ON: HERA (A troublesome verdict for the government “12 U.S.C. § 4617(b)(2)(J)(ii)
(emphasis added). That is no typo” ” Congress, intentionally or otherwise, may have created a MONSTER by handing an agency breathtakingly broad powers and insulating the exercise of those powers from judicial review”) (the 5th circuit en banc decision conflicts this ruling)
12 U.S.C. § 4617(b)(2)(J)(ii) take any action authorized by this section, which the Agency determines is in the best interests of the regulated entity or the Agency(FHFA).
https://cases.justia.com/federal/appellate-courts/ca8/17-1727/17-1727-2018-08-23.pdf?ts=1535038225)
49) Jacobs v. Federal Housing Finance Agency (D. Del. 2015)
(1:15-cv-00708)(15-708)(17-3794)
CLAIM: Derivative & Direct, 3th amendment, Damages
District Court, D. Delaware
Judge: Gregory Moneta Sleet
https://www.courtlistener.com/docket/4220900/jacobs-v-federal-housing-finance-agency/
https://www.courtlistener.com/docket/7297926/david-jacobs-v-federal-housing-finance-agency/
On appeal Before judge: Hardiman, Krause, and Bibas
CASE LOST ON: HERA
http://www.glenbradford.com/wp-content/uploads/2018/11/17-3794-0033.pdf
50) Continental Western Insurance Company v. FHFA (District Court, S.D. Iowa, 2014)
(14-42)( 4:14-cv-00042)
CLAIM: Derivative & Direct, APA 3th amendment, Damages
Judge: Robert W. Pratt
District Court, S.D. Iowa
https://www.courtlistener.com/docket/4247079/continental-western-insurance-company-v-the-federal-housing-finance-agency/
CASE LOST ON: HERA
https://www.courtlistener.com/recap/gov.uscourts.iasd.51533.68.0.pdf
51) Christopher Roberts v. FHFA (7th Cir. 2018)
(16-2107)(1:16-cv-02107)(17-1880)
CLAIM: Derivative, 3th amendment, Treasury’s securities declared invalid
Judge: Edmond E. Chang
District Court, N.D. Illinois
https://www.courtlistener.com/docket/5642392/roberts-v-the-federal-housing-finance-agency/
On appeal before judge Wood, Bauer and Easterbrook
CASE LOST ON: HERA disempowers courts and existing stockholders, directors, and officers https://www.courtlistener.com/opinion/4495195/christopher-roberts-v-fhfa/
(the 5th circuit en banc decision conflicts this ruling)
52) Rafter v. Department Of The Treasury 14-1404 (1:14-cv-01404)
District Court, District of Columbia
Judge: Royce C. Lamberth
https://www.courtlistener.com/docket/4212962/rafter-v-department-of-the-treasury/
https://www.valueplays.net/2015/01/21/lambreth-rules-pershing-v-treasury/
CASE LOST ON: Voluntary Dismissal one business day before Defendants dispositive motions
https://www.courtlistener.com/recap/gov.uscourts.dcd.167678.20.0.pdf
53) Pagliara v. Federal National Mortgage Association (FNMA) (1:16-cv-00193)
District Court, D. Delaware
Judge: Gregory Moneta Sleet
https://www.courtlistener.com/docket/4499522/pagliara-v-federal-national-mortgage-association/
CASE LOST ON: Failure to state a claim upon which relief can be granted
http://courts.delaware.gov/Opinions/Download.aspx?id=257440
54) Pagliara v. Federal Home Loan Mortgage Corporation (FMCC) (1:16-cv-00337)
District Court, E.D. Virginia
Judge: James Chris Cacheris
CASE LOST ON: The Court has little confidence Pagliara seeks these records for valuation purposes
https://www.courtlistener.com/docket/4536190/pagliara-v-federal-home-loan-mortgage-corporation/
55) In re: Federal Home Loan Mortgage Corporation Derivative Litigation (1:08-cv-00773-LMB-TCB)
District Court, E.D. Virginia
Judge: Leonie M. Brinkema
The Class:
1:08-cv-773, Adams Family Trust v. Syron
1:08-cv-849, Louisiana Municipal Police Employees Retirement System v. Syron
1:08-cv-1247, Bassman v. Syron
https://www.courtlistener.com/docket/4832137/in-re-federal-home-loan-mortgage-corporation-derivative-litigation/
https://www.docketbird.com/court-documents/Federal-Housing-Finance-Agency-v-Hsbc-North-America-Holdings-Inc-et-al/Exhibit/nysd-1:2011-cv-06189-00152-037
CASE LOST ON: HERA, the sweeping language of HERA, which not only transfers "all rights, titles, powers, and privileges" of stockholders to the FHFA, but also bars a court from "restraining or affect(ing) the exercise of powers or functions of the (FHFA) as a conservator or a receiver
Sisti v. Federal Housing Finance Agency
Case number: 17-005 (90-1762)(17-042)(20-2025)(20-02025)
Honorable: John James McConnell, Jr
District Court, D. Rhode Island
Claim: FHFA, Fannie Mae, and Freddie Mac are government entities
https://www.courtlistener.com/docket/6900150/sisti-v-federal-housing-finance-agency/
March 24, 2020 Stipulation ~Until - Set Scheduling Order Deadlines
The Parties report to the Court that they are currently re-engaged in negotiations aimed at resolving the action. In order to afford the Parties with sufficient time to complete these discussions and discovery (if necessary), the Parties jointly request the Court extend the scheduling order deadlines by three (3) months to the following:
Factual Discovery to close by 6/30/2020;
Plaintiff's Expert Disclosures shall be made by 7/30/2020;
Defendants' Expert Disclosures shall be made by 8/28/2020;
Expert Discovery to close by 9/30/2020; and
Dispositive Motions due by 10/30/2020.
https://www.courtlistener.com/recap/gov.uscourts.rid.41482/gov.uscourts.rid.41482.53.0.pdf
When decided FHFA, FNMA and FMCC are government entities for matters of constitutional claims of due process and will confirm or not the paragraph nobody can take action while in conservatorship.
https://ecf.rid.uscourts.gov/cgi-bin/show_public_doc?2017cv0005-39
Sept 15, 2020 Notice of Hearing
Sept 29, 2020 Main Doc¬ument Miscellaneous Relief(not online yet)
Sept 30, 2020 Hearing Cancelled
Sept 30, 2020 Order on Motion for Miscellaneous Relief
Sept 30, 2020 Judgment
https://www.courtlistener.com/docket/6900150/sisti-v-federal-housing-finance-agency/
#Nov 13, 2020 Motion To Coordinate Appeals,
#20-02025 Cynthia Boss v. FNMA, FHFA
#20-02026 Sisti v. Freddie Mac
#20-01673 Montilla v. Fannie Mae
#Nov 23, 2020 the opening brief in Montilla is due today
Seila law v. Consumer Financial Protection bureau (CFPB)
Case number: 19-7 (17-56324)
Court: Supreme Court of the United States
Argued March 3, 2020—Decided June 29, 2020
(1) “for-cause” removal protection is UNCONSTITUTIONAL
(2) 12 U.S.C. §5491(c)(3) can be severed from the Dodd-Frank Act
https://www.supremecourt.gov/opinions/19pdf/19-7_n6io.pdf
not sure what to make of it yet if Fannie needs $171B, Ginnie will need to hold > $109B it is too soon IMO to see how this will play out
The Final capital rule as FHFA issued:
Fannie Mae Capital $171B (60.4%) Net income 2019 $14.2B (66.4%)
Freddie Mac Capital $112B (39.6%) Net income 2019 $ 7.2B (33.6%)
The prefs are suspended, that means no dividends, until they are released from conservatorship.
in the mean time we wait for the outcome in the lawsuits, if the conservator made mistakes maybe a dividend can be paid to prefs and commons but until then, nothing can can be given away to prefs and commons
Why should they pay prefs a dividend? And new preferreds can only be issued after the common/pref lawsuits are resolved, I’m missing the logic here
this is question number 2 treasury asked the SCOTUS
OFHEO did NOT have executive POWER, it was an executive agency but WITHOUT executive power
FHFA has executive power and is independent which is not constitutional(single director)
Agree Guido2 plus the law states critical capital is 1.25% of 3.4 Trillion capital is needed (42.5B)
https://www.law.cornell.edu/uscode/text/12/4613
the proposed 2018 and re-proposed 2020 capital rule are not law
and why would the new capital rule be a milepost excatly ?
4617(f) Limitation on court action
Except as provided in this section or at the request of the Director, no court may take any action to restrain or affect the exercise of powers or functions of the Agency as a conservator or a receiver.
Executive powers must be controlled by the other 2 branches of the separation of powers, in other words an independent agency cannot forbid the president, and if executive it cannot prevent judicial power, so currently it is illegal and as executive it will be illegal too
1) Legislative Power (the power to pass laws) to Congress
2) Executive Power (the power to administer the laws) to the President
3) Judicial Power (the power to interpret and enforce the laws) to the Courts
Treasury response to Collins:
In order to make sense of the SCOTUS case we must know what the lawsuit is about.
Collins wants following relief: https://www.courtlistener.com/recap/gov.uscourts.txsd.1391317/gov.uscourts.txsd.1391317.1.0.pdf
PRAYER FOR RELIEF
WHEREFORE, Plaintiffs pray for an order and judgment:
a. Declaring that the Net Worth Sweep, and its adoption, are not in accordance with and violate HERA within the meaning of 5 U.S.C. § 706(2)(C), that Treasury acted arbitrarily and capriciously within the meaning of 5 U.S.C. § 706(2)(A) by executing the Net Worth Sweep, and that FHFA’s structure violates the separation of powers;
b. Enjoining Treasury and its officers, employees, and agents to return to Fannie and Freddie all dividend payments made pursuant to the Net Worth Sweep or, alternatively, recharacterizing such payments as a pay down of the liquidation preference
and a corresponding redemption of Treasury’s Government Stock rather than mere dividends;
c. Vacating and setting aside the Net Worth Sweep, including its provision sweeping all of the Companies’ net worth to Treasury every quarter;
d. Enjoining FHFA and its officers, employees, and agents from implementing, applying, or taking any action whatsoever pursuant to the Net Worth Sweep;
e. Enjoining Treasury and its officers, employees, and agents from implementing, applying, or taking any action whatsoever pursuant to the Net Worth Sweep;
f. Awarding Plaintiffs their reasonable costs, including attorneys’ fees, incurred in bringing this action; and
g. Granting such other and further relief as this Court deems just and proper.
Then in the court of appeals http://www.ca5.uscourts.gov/opinions/pub/17/17-20364-CV2.pdf
it is established:
We REVERSE the judgment dismissing Count I and REMAND that claim for further proceedings. The court REVERSES the judgment as to Count IV and REMANDS that claim for entry of judgment that the “for cause” removal limitation in 12 U.S.C. § 4512(b)(2) is UNCONSTITUTIONAL.
Count I :they allege the Administrative Procedure Act (APA), 5 U.S.C. § 706(2)(C), (D), affords relief because FHFA exceeded its statutory conservator authority under 12 U.S.C. § 4617(b)(2)(D).
Count IV, they allege FHFA violates Article II, §§ 1 and 3 of the Constitution because, among other things, it is headed by a single Director removable only for cause. (4512(b)(2) Term
Then we go to the latest Government filing :
http://www.supremecourt.gov/DocketPDF/19/19-422/158700/20201023184602735_19-422rbUnitedStates.pdf
The questions presented are:
1. Whether the statute’s succession clause—which vests in FHFA, as conservator, the shareholders’ “rights * * * with respect to the [enterprises] and the[ir] assets,” including the right to bring derivative suits on behalf of the enterprises, 12 U.S.C. 4617(b)(2)(A)(i)—precludes shareholders from challenging FHFA’s adop-tion of the Third Amendment.
1) Answer: The succession clause states that: 12 U.S.C. 4617 (b)(2)(A) (I),
“Successor by operation of law, immediately succeed to all rights, of the regulated entity” the FHFA can succeed to all right, but only the rights given, The FHFA obtained from congress: 12 U.S.C. § 4617(b)(2)(D)(i). put in sound and solvent condition and 4617(b)(2)(D)(ii) “preserve and conserve the assets and property” however it does not give the power to FHFA to preclude the right to bring derivative suits on behalf of the enterprises, this is vested in the 5th amendment of the constitution “No person shall . . . be deprived…just compensation” nor does HERA allow to NOT put in sound and solvent condition and 12 U.S.C. 4617(b)(2)(A)(i) “succeed to all rights” does not give FHFA power to not put in sound and solvent condition, nor does it prevent shareholders to question abuse by the conservator action 4617(b)(2)(D)(ii). it also must be said the lawsuit is against: the FHFA as Conservator Melvin L. Watt(now Mark Calabria) and Treasury, and Jacob J. Lew(now Steven Mnuchin).
But what might be correct for Treasury is not correct for the FHFA, those Fiduciary duties differ 100%
2. Whether the statute’s anti-injunction clause—which prohibits courts from taking any action that would “restrain or affect the exercise of powers or functions of the Agency as a conservator,” 12 U.S.C. 4617(f )— precludes
2) Answer: the 12 U.S.C. § 4617(f) Limitation on court action, violates the 5th amendment of the constitution “No person shall . . . be deprived…without just compensation” limitation is only possible if an action was in the best interest of the companies and or shareholders, and in perpetually siphoning the profits is bad for both, § 4617(f) does not prevent questioning these very doubtful conservator actions, so the 10 dismissed lawsuits need to be revisited after the SCOTUS ruled it acted outside their statute
3. Whether the statute’s removal clause—which prohibits the President from removing the Director of FHFA except “for cause,” 12 U.S.C. 4512(b)(2)— violates the separation of powers, and if so, whether it is severable from the rest of the statute.
3) Answer: The statute’s removal clause 12 U.S.C. 4512(b)(2) it was decided by the 5th circuit en banc that for cause” removal limitation is UNCONSTITUTIONAL.
Adding a fourth branch to the separation of powers is a no go, but we all knew that
4. Whether the asserted constitutional defect in FHFA’s structure warrants the invalidation of the Third Amendment. Judicial invalidation of the Third Amendment.
4) Answer: The constitutional defect 12 U.S.C. 4512(b)(2) “For Cause” warrants the invalidation of the Third Amendment as its decisions are made by unconstitutional people and an unconstitutional agency, it can be done by an acting director, but not if the agency itself is unconstitutional, let alone the action itself violates regular solvency laws and the common meaning of a conservator statute (according to the now Head of the FHFA). in perpetually siphoning the profits is not a way to rehabilitate a company
So what to make of it?
1) 12 U.S.C. 4617(b)(2)(A)(i) “succeed to all rights” is a no go as the 3th amendment is outside statute “conserve and preserve”
2) 12 U.S.C. 4617(f ) “Limitation on court action” has nothing to do with the 3th amendment, as the 3th is outside the statute preserve and conserve
3) 12 U.S.C. 4512(b)(2) “for cause” is not severable or HERA needs to be rewritten in an executive agency style that does NOT forget the Fiduciary duties it has
4) 12 U.S.C. 4512(b)(2) “for cause” Judicial invalidation of the Third Amendment
Then to see the Domino effect, when 4512(b)(2) “for cause” is illegal 12 U.S.C. 4617(f ) “Limitation on court action” will also become illegal as the FHFA is now an executive agency and no longer independent, then 12 U.S.C. 4617(b)(2)(A)(i) “succeed to all rights” it can succeed to the rights, but FHFA now has Fiduciary duty to shareholders as executive agency, so it doesn’t look pretty for the FHFA
will update but this is a no news month
600044 Fannie & Freddie Lawsuits (Updated March, 2020)
604895 Fannie Mae & Freddie Mac Lawsuits (FNMA FMCC) updated april 2020
609567 Fannie Mae & Freddie Mac Litigation, FNMA, FMCC updated May 19, 2020
616494 Fannie Mae & Freddie Mac conservator Litigation, FNMA, FMCC updated June 23, 2020
622512 Fannie Mae & Freddie Mac conservator Litigation, FNMA, FMCC updated July 24, 2020
628533 Fannie Mae & Freddie Mac conservator Litigation, FNMA, FMCC updated Aug 24, 2020
634257 Fannie Mae & Freddie Mac conservator Litigation, FNMA, FMCC updated Sept 24, 2020
then we will have to wait for the SCOTUS, any action towards the PSPA are suspended by plaintiffs, that’s why we have the letter agreement
“2. Enjoining Defendants and their officers, employees, and agents from
implementing, applying, or taking any action pursuant to the third amendment to the PSPAs, including its provision sweeping all of the Companies’ net worth to Treasury every quarter;”
https://gselinks.com/Court_Filings/Bhatti/17-cv-02185-0027.pdf
Thanks Action8101, I appreciate the continued support
you can imagine I need a little more than 4 lines
in that case you see it here
On appeal it is determined the 3th amendment is illegal, the courts are defending the legals of the constitution, determined, and put in place by the government, it would be strange if the government would now defend what the court on their behalf concluded, if the court disagrees the government cannot defend that as the court is the speaker for the government policy, the Collins case is set for June 2021, it will be a win on both counts
please note you adressed it to navycmdr, not to me
what did you find?
Thanks for the continued support!!
FIGKX - FEDERATED U S GOVERNMENT SECURITIES FUND 2-5 YEARS Class R Shares
bought 8M shares on 24-sept
https://fintel.io/so/us/fnma
(since Jan-2020 92.4M shares were bought by investors, in jan the stock was trading at $3.30, and with an additional 92.4M shares added to the shareholder base you would not expect it to be at $2.00 )
You misunderstand the situation
- As a shortcut, investors can consider an ROE near the long-term average of the S&P 500 (14%) as an acceptable ratio and anything less than 10% as poor. https://www.investopedia.com/terms/r/returnonequity.asp
- The Gfees at Ginnie mae are 25-75 Bps, The Gfees at Fannie are 47-71.8 bps, the lower the Gfees the less money they earn, the less dividend in the future, the higher the Gfees, the more money they make, but the more market share they loose
So 14% ROE will be the bare minimum
indeed stuff to think about
https://online.wsj.com/public/resources/documents/StarrvUS06152015.pdf
A. The Illegal Exaction Claim
Upon a full consideration of the record and the arguments of counsel, the Court
finds that FRBNY’s taking of 79.9 percent equity ownership and voting control of AIG
constituted an illegal exaction under the Fifth Amendment. The Board of Governors and
the Federal Reserve Banks possessed the authority in a time of crisis to make emergency
loans to distressed entities such as AIG, but they did not have the legal right to become
the owner of AIG. In the Federal Reserve’s history of making hundreds of emergency
loans to commercial entities, the loan to AIG represents the only instance in which the
Federal Reserve has demanded equity ownership and voting control. There is no law
permitting the Federal Reserve to take over a company and run its business in the
commercial world as consideration for a loan.
Under New York Stock Exchange Listed Company Manual Rule 312.03, “shareholder approval is
required prior to the issuance of warrants exercisable into twenty percent or more of the voting power of a
corporation’s common stock unless a company invokes an exception to Rule 312.03 that waives the
requirement of a shareholder vote when (1) the delay in securing shareholder approval would seriously
jeopardize the financial viability of the Corporation’s enterprise and (2) reliance by the Corporation on
such exception is expressly approved by the Audit Committee of the Board.” JX 75 at 2. On September
16, 2008, the AIG Audit Committee approved the issuance of warrants without shareholder approval,
invoking Rule 312.03. Id. at 3.
To come back to the “the worst corporate cultures”
Obama Build up the FHFA and stated “gse flawed Business model” because that was what Paulson and Lockhart voiced
Mark on the other hand stated in his 2015 paper before he became director of the FHFA:
“Unfortunately, FHFA and Treasury have ignored the stakeholder protections in HERA and the long-established requirements and interpretations embodied in the FDIA as well as other U.S. and international insolvency laws.“
https://www.cato.org/sites/cato.org/files/pubs/pdf/working-paper-26_1.pdf
Now hundreds of things come into play but to name a few:
Mark thinks FHFA and Treasury do not comply with HERA(see above), The FHFA was build up by Obama and voiced “structural flaw” meaning corporate profits and IRS losses, however the government sold Fannie and Freddie to shareholders who cannot expect “corporate profits” to go away, and if they do, they have to buy the shares back, in 2012 stock price attack was not successful and the lower it went the more people bought, then Congress wants a commitment fee for implicit guarantee but that is not possible by law, only after it is changed by congress to explicit guarantee this can happen, but explicit can never happen, because it would add $5 Trillion to the deficit, the only logical way is, to keep them in conservatorship forever, but that is not possible either as a conservatorship statute is only temporary, then they thought we need to change the law before they exit, which is not possible either as they will be sooner capitalized than the law can be changed, then they thought we need to change the rules during the game and make sure when they exit conservatorship, we are in control, by amending the soon illegal SPSPA, however that is not possible either because the SPSPA is temporary by design and can’t be seen as policy, for that congress is needed, a 4th amendment will not make the Contract legal if the a court decides the 3th amendment is illegal, and therefore the FHFA participated in an illegal act upon which it needs to void the SPSPA as it is the conservator who voices the best interest for the conservatee, then a consent decree will not be possible either because there is no settlement yet so the courts cannot approve a consent decree, then the FHFA and treasury have siphoned off the profits while it should have been preserving and conserving, so ones the funds are returned they are capitalized and the FHFA lost all its power as HERA only gives power in troubled situations, then we have the lawsuits which are about to come to completion and will be damaging for the government, then FHFA and Treasury only allowed Fannie to retain $25B capital which is contrary to a conservator statute, but because the lawsuits demand no action to the 3th amendment, the only logical solution was to make a letter agreement and allow the companies to rebuild some capital on their balance sheet which on the other hand increases the liquidation preference, this way the “illegal structure” is kept and ones ruled illegal by court can be vacated immediately. The latest testimony from mark to the House Financial Services Committee stated Fannie and Freddie had a bad corporate culture, I see Polysemy
But This is what Mark Calabria said:
“We are trying to deal to to make sure they don't go back to the precrisis behavior. As i've emphasized in other conversations today, i believe that the model of privatized gains and socialize losses that represents the government sponsored enterprises a deep structural flaw that are outside of my authorities to fix. I would certainly encourage encourage congress to address those issues but i believe having them better capitalized. Lastly, i would also add that this is a little less visible, but i would emphasize and such the such a big part of this, fannie and freddie are some of the worst corporate cultures i've ever seen in corporate america. And fixing that is a fundamental prerequisite to get’n out, these companies must be good corporate citizens. We have a lot of work to do on that front.”
https://www.c-span.org/video/?475865-1/hearing-mortgages-coronavirus-pandemic
1) We are trying to deal to to make sure they don't go back to the precrisis behavior.
(we want to amend the SPSPA but that will void the contract)
2) i believe that the model of privatized gains and socialize losses that represents the GSE a deep structural flaw that are outside of my authorities to fix.
(the structural flaw in privatized gains and IRS losses phrase belong to Obama, if congress wants money the law need to be changed and that is something FHFA cannot do)
3) I would certainly encourage congress to address those issues but i believe having these better capitalized.
(HERA is the law and Mark needs to follow HERA that says put in sound and solvent condition)
4) fannie and freddie are some of the worst corporate cultures i've ever seen in corporate america. And fixing that is a fundamental prerequisite to get’n out
(FnF are shareholder owned corporations, not governmental agencies, that is a different culture, so they collide, the Obama administration wanted to socialize the profits, but since the shares were sold to private investors, and the government accepted those benefits, it is not upto FHFA to socialize the profits as that is not FHFA’s statute, nor can it be done while in conservatorship)
Then to another problem:
The prior administrations wanted to reform but they did not want to put FnF in sound and solvent condition, they wanted to CONTROL the companies outside conservatorship, that gives a whole new meaning to conservatorship, so if you do not agree, you seize them, and change to rules in your advantage, Hummm???? whatever, it doesn’t sound all very professional, this is what Edd de Marco said and even more troublesome now Re-voiced somewhat by the Current director:
“By itself, ending the conservatorships is not the goal. The goal is ending the conservatorships in concert with structural reforms in our housing finance system, particularly in the secondary market.”
https://www.nationalmortgagenews.com/news/5-questions-for-former-obama-fhfa-director-ed-demarco
Then the question is, how do you keep control while outside of conservatorship, the control they have is granted by congress in HERA, the FHFA is a regulator with executive power, however that means the FHFA can regulate and NOT modify, so all the things Mark wants need to comply with HERA, but more importantly need to be in tune with the market, as its only obligation is to put in sound and solvent condition, everything FHFA wants that hurt the companies is outside a conservatorship statute (like the capital rule) and will give problems lawsuits etc, in the future, as the market is better informed about the market than an outside the market governmental agency, with only a couple of hundred people, so if the advisers say something, FHFA will need to follow, the opinion of the FHFA should be the same as the market demands as otherwise it will be a negative, for them both, so the most difficult parts is FHFA is currently a conservator and all the things they want cannot be implemented by a FHFA-C, the fact that they are not friendly towards the companies they control will also not work to get them on their feed again, they keep arguing while they should be friends, it was easier to accomplish something if they just vacated the Obama administrations view of we want it all.
Then below are the points Mark Calabria addressed in his working paper prior to becoming Director of the FHFA :
“This paper will demonstrate that the conservatorships of Fannie Mae and Freddie Mac ignore that precedent and resolution practice, and do not comply with HERA. Among the Treasury and FHFA departures from HERA and established precedents are the following:”
1) continuing the conservatorships for more than 6 years without any effort to comply with HERA's requirements to "preserve and conserve" the assets and property of the Companies and return them to a "sound and solvent" condition or place them into receiverships;
2) rejecting any attempt to rebuild the capital of Fannie Mae or Freddie Mac so that they can return to "sound and solvent" condition by meeting regulatory capital and other requirements, and thereby placing all risk of future losses on taxpayers;
3) stripping all net value from Fannie Mae and Freddie Mac long after Treasury has been repaid when HERA, and precedent, limit this recovery to the funding actually provided
4) ignoring HERA's conservatorship requirements and transforming the purpose of the conservatorships from restoring or resolving the Companies into instruments of government housing policy and sources of revenue for Treasury;
5) repeatedly restructuring the terms of the initial assistance to further impair the financial interests of stakeholders contrary to HERA, fundamental principles of insolvency, and initial commitments by FHFA; and
6) disregarding HERA's requirement to “maintain the corporation’s status as a private shareholder-owned company” and FHFA’s commitment to allow private investors to continue to benefit from the financial value of the company’s stock as determined by the market.
https://www.cato.org/sites/cato.org/files/pubs/pdf/working-paper-26_1.pdf
this is/was his honest view before he became Director of the FHFA
not on friday either
Agree but you cannot fire 731 people and hire 731 new employees a day later expecting the agency will run as before, he took office in 2019 it takes years to replace other thoughts, IF he is able to pinpoint the problems
Don’t think Humprey's Executor will be overturned, the FTC is “is headed by five Commissioners, nominated by the President and confirmed by the Senate, each serving a seven-year term. No more than three Commissioners can be of the same political party. The President chooses one Commissioner to act as Chairman.” https://www.ftc.gov/about-ftc/commissioners
1) Independent multimember bi-partisan board is allowed
2) Executive single director is allowed
Humprey's Executor goes way back it is almost impossible to overturn
https://www.ftc.gov/sites/default/files/documents/public_statements/thoughts-ftcs-relationship-constitutional-and-otherwise-legislative-executive-and-judicial-branches/090919roschberlinspeech.pdf
most likely FHFA will be executive again as OFHEO was
not sure, April is a long way, but for sure we not relisting tomorrow
In 2019 the total head count at FHFA was ~731, the FHFA was established in 2008 under Bush, however in 2009 Obama came and left in 2017 during this time you can imagine only democrat alike thoughts are allowed, when in 2017 trump became president and much later in 2019 Mark became director of the FHFA, the company was already filled with people not belonging to the party of the current director, the thoughts in the company are those of the Obama administration, and Mark needs to fight that and a lot of employees are digging their heels in
agree
Agree with the line of reasoning, however the FDIC does have a board but does not have executive power, and can only rule on existing powers and nothing beyond that, the FHFA has executive powers and can determine whatever it wants by law, this executive power was only given to two (newer)agencies the CFPB and the FHFA, the CFPB was struck down by SCOTUS as we all know, and the FHFA will most likely follow suit, then we have 2 options possible:
1) An independent agency with a multi-member board and for cause removal
2) An executive agency with a single director and removable at will
If we then go to Collins it asks is the structure “independent” legal that is either,
1)“for cause” or
2) a “single director”
Then looking at the facts one option is more likely than the other, the FHFA IS an independent agency with for cause removal, its predecessor OFHEO was executive “at will”, a financial regulator needs to act promptly so that would point to a single director, congress created a single director independent agency, so it likely wants to keep the agency single director as a middle of the road decision is not wishful in turmoil
The Idea congress had is OFHEO lacked power, and it wanted to give more power to the soon established FHFA, they had a powerless OFHEO with at will and executive, when it gave more power, it changed to “for cause” and independent and with that also the costs of running the agency disappeared, a novel thought but it violates the separation of powers, it is simply overseen, they thought to get away with it, and since this structure is allowed since 2008, they thought let’s do this again in 2011 with the CFPB, the CFPB “for cause” however is called unconstitutional and the FHFA will soon follow, but for us shareholders the structure doesn’t matter either way
oh boy I think the government is in trouble
Collins asks, does the structure “Independent” violate the separation of powers because it is headed by a single director, the constitution does not allow such a novo structure, and in Seila confirmed this view
In two(see below) it asks if the 3th amendment to the SPSPA must be truck down because they made these agreements while they were unconstitutional structured, then if above is declared illegal
below 4511(a) will likely need to be voided, when the agency is no longer independent it becomes executive, so 4512(b)(2) needs to be changed to at will as executive agencies are controlled by the president and 4516(f)(2) needs to be voided as executive agencies cannot have assessments
but “Whether the courts must set aside a final agency action that FHFA took when it was unconstitutionally structured” could also read as “Was the FHFA allowed to enter into conservatorship with Fannie and Freddie, because FHFA was unconstitutional structured and so the powers granted by congress cannot be used by an unconstitutional agency (FHFA) and therefore the conservatorship must be voided” meaning the “final agency action” is the takeover, the SPSPA are details in the process
Then A multimember board however is not likely, the single director will then be changed to a board, which is not what congress intended with “independent single director”, as a financial regulators must be able to act swiftly, which is not possible with a multimember bi-partisan board
So if court must decide on either
“Executive single director with at will removal” or
“Independent multimember board with for cause removal”
For safety reason will go for “Executive single director with at will removal”
And considering its predecessor OFHEO was also an Executive under HUD single director it is a guarantee there will be no multimember board
Severability
HERA really is on the edge of a knife, the things it wants are new to the constitution and the writers of HERA gave themselves too much power and forgot the constitution was already written, and the domino effect that “for cause” will cause is uncertain how it plays out, they will try to sever the parts from HERA which theoretically puts them back to the OFHEO regime, but that doesn’t mean HERA can stay any way near close to originally implemented, we know following numbers have a problem :
1) 44 U.S.C. § 3502 (5) Term “independent agency” means the Board of Governors of the FHFA
2) 12 U.S.C. § 4511(a) Establishment
3) 12 U.S.C. § 4512(b)(2) Term
4) 12 U.S.C. § 4516(f)(2) Not Government funds
5) 12 U.S.C. § 4617(a) HERA empowered FHFA to appoint itself as the conservator
6) 12 U.S.C. § 4617(f) Limitation on court action (anti-injunction clause)
7) 12 U.S.C. § 4617(b)(2)(J) Incidental powers (succession clause)
But beside those also following occur:
8) 12 U.S.C. § 4501(1), (2), and (7) Congress finds that they have important public missions, regulation is needed to reduce the risk of failure, while maintaining a strong financial condition and a reasonable economic return (important for the Gfees and something the FHFA now only establishes for treasury)
9) 12 U.S.C. § 4502(8)(A) an enterprise is in “default” if it is under a conservatorship
10) 12 U.S.C. § 4617(a)(2) FHFA may be appointed conservator for reorganizing, rehabilitating
11) 12 U.S.C. § 4617(a)(5)(A) authorizes the enter-prises to challenge FHFA actions within 30 days
12) 12 U.S.C. § 4617(a)(6) The BOD shall not be liable to the shareholders
13) 12 U.S.C. § 4617(b)(2)(A) Successor to entity FHFA shall, as conservator immediately succeed to
14) 12 U.S.C. § 4617(b)(2)(B)(i) FHFA may, take over the assets of the regulated entity
15) 12 U.S.C. § 4617(b)(2)(B)(iv) preserve and conserve the assets and property of the regulated entity
16) 12 U.S.C. § 4617(b)(2)(D) The Agency may put in sound and solvent condition
17) 12 U.S.C. § 4617(b)(2)(G) FHFA may, transfer or sell assets without consent
18) 12 U.S.C. § 4617(b)(2)(J)(ii) may act in the best interests of the regulated entity or FHFA
19) 12 U.S.C. § 4617(b)(15)(C)(i)-(ii) FHFA may not recover the value of the SPSPA if declared illegal
20) 12 U.S.C. § 4617(i)(12) The reversal on appeal, does not affect the validity of any debt
And probably even more but That being said an overhaul is due as so many parts need to be altered, it would be wiser to go back to the proven OFHEO which is probably what will be established when the above is altered, it is a 50/50 to me void or modify.
In the end though the outcome will be the same either way
Below a Copy of Collins petition to SCOTUS:
http://www.supremecourt.gov/DocketPDF/19/19-422/116983/20190925131502103_Collins%20Petition--PDFA.pdf
QUESTIONS PRESENTED
In 2008, Congress created the Federal Housing Finance Agency (FHFA)—an “independent” agency with sweeping authority over the housing finance system. 12 U.S.C. § 4511(a). Unlike every other independent agency except the Consumer Financial Protection Bureau, FHFA is headed by a single Director who can only be removed for cause by the President and is exempt from the congressional appropriations process. 12 U.S.C. §§ 4512(b)(2), 4516(f)(2). The questions presented are:
1) Whether FHFA’s structure violates the separation of powers; and
2) Whether the courts must set aside a final agency action that FHFA took when it was unconstitutionally structured and strike down the statutory provisions that make FHFA independent.
12 U.S.C. § 4511(a) Establishment
There is established the Federal Housing Finance Agency, which shall be an independent agency of the Federal Government.
12 U.S.C. § 4512(b)(2)Term
The Director shall be appointed for a term of 5 years, unless removed before the end of such term for cause by the President.
12 U.S.C. § 4516(f)(2) Not Government funds
The amounts received by the Director from any assessment under this section shall not be construed to be Government or public funds or appropriated money.
Striking Down 4617(f)
"4617(f) Limitation on court action
Except as provided in this section or at the request of the Director, no court may take any action to restrain or affect the exercise of powers or functions of the Agency as a conservator or a receiver."
https://www.law.cornell.edu/uscode/text/12/4617
The problem with 4617(f) is that it prevents courts from ruling, the constitution has 3 branches and none of the 3 branches can forbid power to another branch, in this case 2) forbids 3) apart from that, 2) has a problem of itself as the Director of FHFA is insulated from power of the president, the known “for cause” problem
The 3 Branches of the Constitution:
1) Legislative Power (the power to pass laws) to Congress
2) Executive Power (the power to administer the laws) to the President
3) Judicial Power (the power to interpret and enforce the laws) to the Courts.
Following plaintiff allege 12 U.S.C. § 4617(f) is unconstitutional:
1) Collins 19-422
“This Court should decide whether the Fifth Circuit was correct to make FHFA
“Subservient to the Executive Branch” while leaving in place statutory provisions that insulate the agency from Congress and the judiciary”(12 U.S.C. § 4617(f))
http://www.supremecourt.gov/DocketPDF/19/19-422/116983/20190925131502103_Collins%20Petition--PDFA.pdf
2) Rop 17-497
“HERA’s restrictions on judicial review further insulate FHFA from the mechanisms the Constitution creates to protect individual rights from arbitrary decisions by the federal government.” http://gselinks.com/Court_Filings/Rop/17-cv-00497-0017.pdf
3) Atif F. Bhatti 17-2185
Declaring that FHFA’s structure violates the separation of powers, that
FHFA may no longer operate as an independent agency, and striking down the provisions of HERA that purport to make FHFA independent from the President and unaccountable
to any of the three Branches of the federal government, including 12 U.S.C. §§ 4511(a),
4512(b)(2), 4617(a)(7), and 4617(f)
https://gselinks.com/Court_Filings/Bhatti/17-cv-02185-0027.pdf
4) Wazee 18-3478
Declaring that FHFA's structure violates the separation of powers, that FHFA may no longer operate as an independent agency, and striking down the provisions of HERA that purport to make FHFA independent from the President and unaccountable to any of the three Branches of the federal government, including 12 U.S.C. §§ 4511(a), 4512(b)(2), 4617(a)(7), and
4617(f);
https://gselinks.com/wp-content/uploads/2018/08/18-cv-03478-0001-Complaint-8-20-18.pdf
5) Fairholme 13-465
HERA restricts the availability of judicial review of FHFA's actions as conservator. Most significantly, HERA specifies that "no court may take any action to restrain or affect the exercise of powers or functions of [FHFA] as a conservator." 12 U.S.C. § 4617(f). A number of other provisions of HERA impose additional limitations on judicial review of FHFA's actions as conservator, receiver, or regulator. See id. § 4617(b)(2)(A)(i); id. § 4617(b)(5)(E); id. § 4617(b)(11)(D); id. § 4623(d). While none of these provisions bars claims like those raised in this suit, HERA's restrictions on judicial review further insulate FHFA from the mechanisms the Constitution creates to protect individual rights from arbitrary decisions by the federal government.
https://www.docketbird.com/court-documents/Fairholme-Funds-Inc-et-al-v-USA/REDACTED-DOCUMENT-filed-by-ACADIA-INSURANCE-COMPANY-ADMIRAL-INDEMNITY-COMPANY-ADMIRAL-INSURANCE-COMPANY-ANDREW-T-BARRETT-BERKLEY-INSURANCE-COMPANY-BERKLEY-REGIONAL-INSURANCE-COMPANY-CAROLINA-CASUALTY-INSURANCE-COMPANY-CONTINENTAL-WESTERN-INSURANCE-CO/cofc-1:2013-cv-00465-00422
Then Following lawsuits were (partially) Dismissed on 4617(f)
1) Robinson 15-109
“We conclude… Her claims against FHFA, therefore, are barred by HERA’s limitation on court action, § 4617(f)” https://www.courtlistener.com/opinion/4445969/arnetia-robinson-v-fed-housing-fin-agency/
2) Saxton 17-1727
That is no typo. The FHFA can operate critically important businesses, with trillions of dollars in assets and the financial support of the federal government, in its own best interests—apparently to the exclusion of the interests of the American people, Fannie and Freddie, and their shareholders. (The delegation is more harrowing still. The President can only remove the FHFA’s director for cause; Congress cannot control its budget through the normal
appropriations process; and the judiciary cannot interfere with the exercise of its
powers or functions as conservator. See Collins v. Mnuchin, No. 17-20364 see also 12 U.S.C.
§§ 4512(b)(2), 4516(a), (f), 4617(f). But unlike the plaintiffs in Collins, the shareholders do not raise a constitutional challenge in this case. Rather, they ask us to decide only whether the FHFA has exceeded its statutory powers and functions.
https://cases.justia.com/federal/appellate-courts/ca8/17-1727/17-1727-2018-08-23.pdf?ts=1535038225
3) Jacobs 17-3794
We reject the shareholders’ challenge on all fronts. First, the Recovery Act gave the government broad, discretionary power to enter into the deal. Second, the deal complies with the requirements of the Recovery Act, as well as Delaware and Virginia corporate law. And third, the relief sought would “re-strain or affect the exercise of [the government’s] powers” as conservator, which the Recovery Act forbids. 12 U.S.C. §4617(f). That relief, even the monetary relief, would unwind the whole deal. So we will affirm the District Court’s dismis-sal.
http://www.glenbradford.com/wp-content/uploads/2018/11/17-3794-0033.pdf
4) Continental Western 14-42
The Court notes that even if it were to reach the merits of Continental Western’s claims….
(2) HERA bars Continental Western’s claims under the APA
5) Roberts v. FHFA 17-1880
Just as section 4617(f) bars the plaintiffs’ claims against the Agency, it prevents our granting declaratory and injunctive relief against Treasury. Section 4617(f), once again, prevents us from taking “any action to restrain or affect the exercise of powers or functions of [the Agency] as a conservator.” 12 U.S.C. § 4617(f) (emphasis added). An injunction or declar-atory judgment reventing Treasury—the Agency’s counter-party—from honoring the terms of the Third Amendment would fundamentally “affect” the Agency’s conservatorships of Fannie and Freddie and so would run afoul of section 4617(f).
https://www.courtlistener.com/opinion/4495195/christopher-roberts-v-fhfa/
The fight is also about the constitutionality of 4617(f) if for cause is changes to at will, 4617(f) will be unconstitutional as it then violates the separation of power, but that was the only reason a lot of lawsuits were dismissed