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"suddenly they haven't profited from the seniors at all and would therefore be entirely justified in converting the seniors to commons after all!"
When did US Gov started thinking of making profits that too robbing the Gov public policy institutions which also happen to be privately owned?
It is the wall street loan sharks who promoted thinking on these lines to destroy their biggest competitor.
"Do they want to take the risk that they have to contend with the costs of finding HERA unconstitutional?"
Why would it be risky for Gov? Revolving door bureaucrats achieved their goals of making money for their lobbyists and cronies. Wallstreet traders made big money shorting everything.
Gov saved failed economy bankrupting FnF and robbed private shareholders capital. Who would pay guaranteed 10% interest on no risk investment.
Only risk is Gov has to return ill gotten money that never belonged to it anyway.
"Calabria said.
By law they are private companies and I have to follow
the law whether I think it makes sense or not.”
Finally Calabria seems to be acting like a public servant duty bound to uphold law and constitution.
If any public servant wishes to do anything contrary to legal mandates then they should quit their Gov job.
"SO I THINK HOUSING IS THE BRIGHT SPOT OF THE ECONOMY."
If SM and Trump wants to impress the public, then SM needs to stop talking and just end the conservatorship.
"Seems ur one of the very few who thinks extremely hi reserves is good. Comments from the pros say just the opposite"
Calabria has not managed any single private company in his life time. Raising few millions for a private company itself is above his pay grade leave raising 10s of billions for company that are under lawless conservatorship for more than 12 years. Calabria is a clueless misfit when it comes conservatorship of FnF.
FHFA and its director are not qualified in any sense to be a conservator. Besides FHFA director's authority to appoint himself as a conservator without any checks and balances and accountability itself goes against principles of separation of powers.
"The first part was only part of the opinion and not the order. The case was tossed for failure to state a claim, even if some parts of the complaint have merit."
It is confusing order.
Why would Judge rule like this.
"In summary, Plaintiffs’ claims can proceed. " and then dismiss the whole case.
Any way pps is going up, so may be it was a favorable judgement for plaintiffs.
"In accordance with the Opinion and Order entered this date, IT IS ORDERED THAT Plaintiffs’ complaint is DISMISSED for failure to state a claim."
http://www.glenbradford.com/wp-content/uploads/2020/09/17-cv-00497-0066.pdf
What about the below rulings in the above url.
----------------------------
E. Conclusion
In summary, Plaintiffs’ claims can proceed. The claims are derivative but Plaintiffs have prudential standing to bring them. Defendants have not shown that Plaintiffs’ claims are barred by the doctrine of claim preclusion or by HERA’s succession clause
One consequence of the difference in these roles is that, unlike a receiver, a conservator does not fully step into the shoes of the entity under its management.
Conservators, unlike receivers, have a fiduciary duty running to the corporation itself.
It does not stand to reason that the FHFA was acting as the equivalent of a private party when making such an arrangement. In short, the FHFA is undeniably an executive agency with a variety of powers given to it
by a federal statute. It used those powers for the benefit of the Government when adopting the Third Amendment.
The Constitution requires the exercise of such power to be subject to the control of the President through the President’s removal power, so that the President can faithfully execute the law. The removal protection for the FHFA’s Director, when combined with the FHFA’s structure (an agency directed by a single individual serving a five-year term), is almost certainly unconstitutional.
This Court concluded that the FHFA exercised governmental power when adopting the Third Amendment. In other words, the FHFA is not a private entity and did not act as such.
"False. The case was DISMISSED for failure to state a claim."
May be I did not read properly. Can you post the ruling where the whole case was dismissed.
"are both parties asking for summary judgement against the other
"
Looks like both party's counter summary judgement requests are denied and next steps are discovery and trial.
The best guess is, SCOTUS ruling will be out by the time trial starts.
http://www.glenbradford.com/wp-content/uploads/2020/09/17-cv-00497-0066.pdf
Court has dismissed summary judgement against FHFA but not the whole case.
Some Court rulings favorable to plaitinffs;
E. Conclusion
In summary, Plaintiffs’ claims can proceed. The claims are derivative but Plaintiffs have prudential standing to bring them. Defendants have not shown that Plaintiffs’ claims are barred by the doctrine of claim preclusion or by HERA’s succession clause
One consequence of the difference in these roles is that, unlike a receiver, a conservator does not fully step into the shoes of the entity under its management.
Conservators, unlike receivers, have a fiduciary duty running to the corporation itself.
It does not stand to reason that the FHFA was acting as the equivalent of a private party when making such an arrangement. In short, the FHFA is undeniably an executive agency with a variety of powers given to it
by a federal statute. It used those powers for the benefit of the Government when adopting the Third Amendment.
The Constitution requires the exercise of such power to be subject to the control of the President through the President’s removal power, so that the President can faithfully execute the law. The removal protection for the FHFA’s Director, when combined with the FHFA’s structure (an agency directed by a single individual serving a five-year term), is almost
certainly unconstitutional.
This Court concluded that the FHFA exercised governmental power when adopting the Third Amendment. In other words, the FHFA is not a private entity and did not act as such.
"True, but have you ever read one of their cases where they invalidated a statute that wasn't IMMEDIATELY AT ISSUE IN THE BRIEFINGS?
"
"The Court decided against Marbury 6-0. Historical significance: Chief Justice John Marshall wrote, "An act of the legislature repugnant to the constitution is void." It was the first time the Supreme Court declared unconstitutional a law that had been passed by Congress."
https://law.justia.com/constitution/us/acts-of-congress-held-unconstitutional.html
", I don't think the court has the power to invalidate statutes that are NOT PROPERLY BEFORE IT!"
Nobody tells SCOTUS on how to rule. SCOTUS can overrule its own previous rulings.
"In 1913, Congress gave the Governors of the Federal Reserve Board for-cause protection to ensure the agency would resist political pressure and promote economic stability. See Act of Dec. 23, 1913,
ch. 6, 38 Stat. 251."
LOL, You make lot sense.
"?"
What your point.
"There are exceptions."
There are no exceptions. Even Agencies headed by multi member boards can not be executive agencies.
So far, for executive agencies like Federal reserve, the structure has not been challenged and validated by the SCOTUS.
About a year back Trump rightly claimed that POTUS can fire Federal Reserve Chairman.
Read the recent SCOTUS ruling in CFPB case.
"Even in the absence of a severability clause, the “traditional” rule is that “the un-constitutional provision must be severed unless the statute
created in its absence is legislation that Congress would not
have enacted.”
The fundamental problem with HERA is, unconstitutional interpretation of HERA by corrupt bureaucrats and validated by equally corrupt judges. HERA is replete with such unconstitutional interpretations.
Under US Constitution (SCOTUS ruling), any Gov apparatus that exercises executive power can exist only under the direct supervision of POTUS with POTUS having constitutional authority to remove at will.
HERA is a law that created new Gov agency FHFA, not only as a independent executive agency but also an executive Gov agency that is independent of Congress and Judiciary.
This makes HERA fundamentally flawed law under US constitution. Judge Lamberth hinted at this in his first ruling.
If SCOTUS tries to remedy the constitutional flaws in HERA then HERA no longer meets the unconstitutional intentions of Congress. So it will be in the best interest of all if SCOTUS abolishes HERA and restores the previous HUD/OFHEO.
"The cash flow issue comes in when Treasury and Federal Reserve decide that both of them need to buy $20 billion each, every month, to ensure liquidity in the financial markets. Left on their own, Fannie and Freddie would have picked the quality and quantity of mortgages they purchased. They were not short of cash if they were to behave as any prudent business would and purchased mortgages within their ability. Instead, their CONSERVATOR, who was supposed to preserve and conserve their assets, did just the opposite."
When there are complicit judges, private companies and investors have no where to go.
It has taken more than 8 years to settle simple question of constitution and law.
"If GSEs release tomorrow, then Calabria will have m nothing to do.
He try his best to delay."
This is the story of Gov bureaucracies. They start as temporary and then it lasts for few centuries for the benefit of bureaucrats.
In case of FHFA it is even far worse or ultimate worst. FHFA is not accountable to any one. FHFA does not even go to Congress or administration for its salaries and expenses. It is massive vampire agency living on its victims.
"17 Months after sending POTUS Memo to End C'ship"
Lawless FHFA Consevatorship is the biggest risk to taxpayers, home buyers and economy.
FHFA bureaucrats have tried very hard to make sure that FnF can never exit conservatorship and be under FHFA forever.
FnF can never raise even 1 penny capital under FHFA conservatorship with all the reckless utterances.
Can any one explain why FnF ever needed conservatorship and why it is being continued?
Guido2, Thanks.
"https://www.housingwire.com/articles/pimco-warns-releasing-fannie-freddie-could-imperil-housing-finance/"
Obviously PIMCO managers are trying to protect their investments in MBS.
Did not poor PIMCO managers know that MBS were never guaranteed by the Gov and releasing from conservatorship does not change this?
"This is not a typical reorganization situation."
One fine day administration and courts will tell the conservator to follow the law, be publicly accountable and release immediately.
FHFA conservatorship is a total disgrace in any civilized society.
"FHFA extends foreclosure & eviction halt for a third time to Dec. 31
FHFA Director Calabria says most recent extension will protect
more that 28 million homeowners"
Does any one knows who is paying for this forbearance?
Loose Talker Calabria talks big ideology but he continues to burden private shareholder companies FnF.
"Simple to figure out. Apparently it has been overcast in the District of Columbia every f'ing day for the past four years . . . or will be come the third week in January!"
Does any one know why it is a crime if done by common citizens and not a crime if same thing is done by bureaucrats?
"Calabria to U.S. SENATE during Confirmation hearings -
"the time to FIX the ROOF is when the Sun is Shining""
Not Sure but why plaintiffs have not filed criminal complaints against FHFA conservators as individuals.
If FHFA conservators were private entities then surely State and Federal authorities would not have kept quiet.
"Conversion is here!!!!!!!
Just push "sell" to preferreds. Wait for the trade to execute.
Then push "buy" to FNMA common. Poof, you have converted your preferreds to commons!!!!!"
You made it so easy for JPS holders.
"They can always retain earnings their way to release in 2028!"
As of now, retained capital seems to be the only option.
But there have been no reasons for conservatorship to continue since FnF became highly profitable 10 years back. FnF have been viable all along since their incorporation as private companies.
"I think Ackman's point is spot on, but maybe for a different reason than gets noted in his commentary. If the capital threshold fails to be lowered and the IPO to raise that amount is undersubscribed, does this, then, force FHFA ro declare a severe under-capitalization event and a receivership that could wipe out new investors? Without this issue being resolved by demonstrating a fair and conciliatory treatment of legacy investors, NOBODY is going to stick their toes into that toxic wastewater left over from the 2008 investor massacre."
If incompetent and lawless conservator conspires and makes it difficult to raise the capital, then next logical step is to hand over FnF to common shareholder and let them manage it.
Failure to raise capital is no-trust and no faith vote for conservator.
"It was in response to false information. I didn't bring up bankruptcy just responded to it accurately."
No problem sir. It applies to the original post where false information was peddled.
"Someone gets it. Thank you for being a bastion of facts and truth which is more than I can say for the courts."
Thank you sir.
"Facts! Great retort."
Thank you sir. In this FnF saga dominated by the propaganda of lies after lies, unfortunately we to repeat truth few times.
"Yes, but I don't think there will be a formal bk chapter filing for restructuring in the court. It will be done internally to restructure the capital stack through exchange offers."
Conservatorship was forced on FnF not because FnF were bankrupt or FnF needed any capital. FnF had about $100B capital, positive cash flows. FnF had lowest foreclosure losses. Now FnF have the best mortgage portfolio. FnF have been profitable since last 8-10 years and are projected to be profitable for foreseeable future. FnF have paid back all the obligations as per original SPSPA. So why even talk about bankruptcy?
Conservatorship was imposed to save the frozen US housing economy. Gov used private share holder companies for public purpose at the cost of private share holders using FnF private capital without any compensation for the service.
Besides conservatorship was imposed by unconstitutionally structured FHFA along with unconstitutionally written HERA.
Best remedy would be to abolish HERA along with FHFA. HUD and regular regulatory agencies should be regulating FnF.
"HERA is the laughingstock of Law & Order !
The GOVT enforces HERA when they want too
when they don’t want to they ignore HERA !
What a 3 rink circus going on !
The Supreme needs to strike down HERA."
Agree. HERA is a law that protects FHFA Conservator from public accountability but also makes other agencies immune from public accountability.
HERA by any measure violates all principles of Constitution and fair governance.
"Great find, I found this when I googled "Alex J. Pollock":"
LOL, You have found a great joke.
"2. Whether the statute’s succession clause—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.""
CFPB ruling has presented many issues in this case because of confusing nature of HERA, FHFA, FHFA conservator, FnF.
Probably when SCOTUS starts ruling on some of these issues, this question itself may become moot.
"The Parrot, Ryan and Zandi paper won’t be the last to make the point that Calabria’s decision to impose a bank capital standard on Fannie and Freddie is without justification and contrary to the readily observable risks of the one business they’re permitted to do, and if insisted upon will have easily predictable negative consequences for mortgage rates, mortgage availability and systemic financial risk."
With FnF's ongoing risk diversifications the Financial Establishment has the skin in the game.
"United States vs Collins is a military rape case..."
Does this case relate to FnF/FHFA or unrelated.
"Just to be clear, did you mean United States vs Collins?
Or, Collins vs Mnuchin?"
Both are merged as one case.