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Will you ever learn that capital distributions are restricted?
The question is, why on earth did you stop in 10 years?
If you take the last 12 years (as of end December 2011), the outcome is $236B and that's Common Equity (Net Worth on the Balance Sheet, that belongs to the common shareholders), including a charge for the CECL Accounting Standard adoption in January 2020.
With the accumulated losses in the prior 3 years and a half and adding it up to the Common Equity balance as of June 30, 2008, plus the PLMBS lawsuit settlement and a refund of the CRT expenses, net (turned into Retained Earnings), the outcome is the figure of Common Equity per stock that I posted yesterday: $116.
That is, Common Equity = $134B.
NECESSARY FOR THE RESUMPTION OF DIVIDEND PAYMENTS AND JPS's PAR VALUE VALUATION.
What you are promoting is the Separate Account plan that later you deny, because your stance contending that
Adjusted BVPS in $FNMA= $116.
Under the Separate Account plan (no dividend payment to no one)
Fannie Mae has set aside a small provision for loan losses of $116 mll, breaking two consecutive quarters of reserve release. ALLL ending balance: $8.7B.
Unlike Freddie Mac that released $467 mll in Q4, for the third quarter in a row (ALLL ending balance: $6.8B).
A Loan Loss Reserve for expected losses, unlike the capital ratios for unexpected losses.
How the Common Equity per share is calculated, was explained yesterday in the post I'm replying to.
The JPS need the Common Equity to resume the dividend payment and recoup their par value. Something they aren't aware of, not challenging all the capital distributions to Treasury.
What the famous "wind down" rhetoric was really about.
Besides wind down the Investments Portfolio (PLMBS), wind down the affairs of FnF with the Equity holders, FHLB-style.
It can only be done once the CET1 > 2.5% of the Adjusted Total Assets in the case of the JPS, and a Takings (Treasury) or a takeover (bigger players in Housing Finance) in the case of a common stock at the adjusted fair value as of December 31, 2023.
The Equity holders have been deprived of one year of dividend payments in Fannie Mae, and two years in Freddie Mac (Separate Account), just because the FHFA didn't want the JPS around trading at par value since the date of dividend resumption, for the expected Privatized Housing Finance System revamp (Charter revoked), chosen for the release in 2011.
In the case of the JPS holders, this is devastating with the stock valuation of a fixed-income security with a Non-Cumulative dividend.
We are talking about "any action authorized by this section, in the FHFA's best interests" (FHFA-C's Incidental Power)
There can be no rebates to make up for these losses. No "outstanding obligation to be honored" has emerged in the Lamberth court.
Blame the FHFA.
Those fighting the difference in stock valuation between common stocks and JPS, are fighting a losing battle.
$FMCC
— Conservatives against Trump (@CarlosVignote) February 15, 2024
Expected refund:$76B
Separate Acct: CET1=2.8% of Adjusted Total Assets. JPS can be redeemed and still meet Tier1>2.5% ATA (ERCF),satisfying the @FHFA's will: get rid of the unwanted Equity holders(FHFA-C's Inc Power)
"Wind down their affairs w/ them", FHLB-style.#Fanniegate pic.twitter.com/s37vdZnpDh
All publicly traded companies are compelled to comment on any information surrounding them (SEC rules), including the sham jury trial.
The old trick of carrying out a Separate Account plan and then, a bunch of mercenaries are hired to complain about what is announced instead, bringing an Implied Contract case, a claim on phony damages (one-day share price drop; Constitutional damages yesterday in the 8th Circuit Court of Appeals with Bhatti, the same claim brought up to the 5th Cir. by the same attorney with the Collins case,...)
These people truly think that they can swap Preferred Stocks for Common Stocks. This is why they are obsessed with stock price manipulation: the lower the common stock price, the more shares they get for their Prfds and thus, more percentage of ownership.
The U.S. courts have been their playground: abuse of court process all across the board.
15 years on, a Guirdo writes that he will start thinking about it.
Adjusted BVPS in $FMCC= $170.
Adjusted for the Separate Account plan (Common Equity held in escrow), calculated with the Common Equity as of June 30, 2008, and then, the Accumulated Total Comprehensive Income, adjusted for charges for 3 Accounting Standard adoptions during Conservatorship, plus
- A refund of the CRT expenses, net (illegal in the Charter Act: Credit Enhancement clause. The conservator has no authority to override the law.), plus
- The settlement of the PLMBS lawsuit, net of attorney fees. Freddie Mac gets 73% of total, based on the AOCI (Unrealized losses in PLMBS) as of June 30, 2008, compared to Fannie Mae. A product illegal in the Charter's Credit Enhancement clause as well. This is why Timothy Howard drives us repeatedly to a debate about the economic sense of the CRT, in order to conceal this clause that he violated with the PLMBS, and contributed to the Conservatorship: AOCI isn't captured in the statutory Core Capital, unlike the new CET1 and Tier1 capital. PLMBS, the grounds of fraud with fraudulent information, mispricing,... Let alone the contribution of the stock buybacks, an investment barred in the Charter Act too. $7B Treasury Stock in Fannie Mae reduces the Net Worth and the Core Capital.
I meant what I said. If Fannie Mae states that there is $195.3B SPS LP outstanding, including the ones expected to be increased on December 31, 2023, but only $120.8B shows up on the Balance Sheet as of September 30, 2023, it means that there is $74.4B SPS LP absent from the Balance Sheet.
The same with Freddie Mac. $117.3B SPS LP outstanding including the ones of December 31, but only $72.6B SPS LP shows up. $44.7B SPS LP is missing.
It's also missing their corresponding offset. $118.5B together.
Their objective is to peddle the lie of "FnF continue to build capital through Retained Earnings" (Bill Ackman).
Their objective is also to conceal the outcome, where we would see that necessarily these gifted SPS have been used to hold the Common Equity (Retained Earnings) in escrow, through the offset (Adjusted Net Worth Activity table posted before), otherwise this capital distribution #1 is RESTRICTED.
In compliance with the exceptions 1, 2, 3, 4 to the Restriction on Capital Distribution for this case CFR1237.12: "A capital distribution for the recapitalization".
In compliance with the FHFA-C's Rehab power.
At some point, the conservator will unwind it, so the Retained Earnings is back up.
It would have uncovered that a similar "Separate Account" occurred with the dividend payments, RESTRICTED, and the exceptions kicked off: reduction of the SPS (U. S. Code 4614 (e)). Then, recap..
3 different phases in the Capital distributions, applied towards:
1- Reduction of SPS. 10% and NWS dividends.
2- Recap with the NWS dividend.
3- Recap with the SPS LP increased for free.
No SPS LP needs to be canceled. Either they were repaid or, it's considered a joke (SPS LP increased for free? C'mon!)
You see? We can also stretch the FHFA-C's Incidental Power to the max "in the FHFA's best interests". This is because, if the gifted SPS LP is canceled, FnF would have to pay taxes.
Finally, quit saying that you are trying to understand me, implying that I'm not explaining myself correctly and an attempt to discredit me.
You just ask a question.
Anyway, you are playing the fool because you have been explained this a thousand times in the last 8 years, Mr. Pro Se.
The litigants claim damages when the NWS goes on with the SPS increased for free every quarter, in the same amount as the Net Worth increase, imposed by Trump with Mnuchin, but it started out with Mel Watt and Mnuchin on December 31, 2017 with a one-time $3B SPS LP increased for free, when they were warned that the SPSPA had a goal of $0 Net Worth (at the time, it was a true "Applicable Capital Reserve" = amount of NW above the capital stock) as of end of 2017 (the rest, swept), which was a breach of the Charter Act that requires the management to have always a minimum Net Worth, without specifying more.
The "Applicable Capital Reserve" fetched $0 as was first planned in the 3rd amendment ($600 mll annual reduction), but the Net Worth increased in $3B SPS LP increased for free out of the blue, so the Charter Act is upheld. These gifted SPS and the offset, absent from the balance. This is why Watt-Mnuchin are considered allies and it started out the current scam of increasing the Net Worth with SPS, pretending that it's Capital Reserve.
The same Common Equity Sweep (Retained Earnings account) as before with the dividend payments. This is why now, it's called NWS 2.0.
The adjusted Capital Reserve is stuck at $0 as of December 2017, not the $118B on September 30, 2023.
This effect cannot be seen because FnF don't post on the Balance Sheet these gifted SPS and their corresponding offset with reduction of the Retained Earnings account.
The objective is to conceal that the Common Equity is held in escrow (image) in order to comply with the exception (Recap) to the Restriction on Capital Distributions (CFR 1237.12) which, in turn, complies with the restriction by statute U.S. Code 4614(e) ("it supplements and shall not replace"), because a restriction is for Recap, you don't need to be told that it's for Recap.. The difference is that now the Recap is in a Separate Account: "a capital distribution to meet the minimum capital level and risk-based capital requirement".
Freddie Mac:
Capital Reserve is an invalid capital metric in the FHEFSSA, badly assessed because it's $0 in reality, aiming to divert attention from the Separate Account plan, and pitch the "Rehab" required by the SCOTUS, which, by the way, it begins on day one, not whenever the conservator wants.
"Capital Reserve End Date": when the Capital Reserve meets the capital requirements, wrote Trump-Mnuchin in the January 2021 SPSPA amendment, instead of being met with C.C., Total Capital, CET1 and T1 under the 1992 FHEFSSA (ERCF).
The litigants use this Financial Statement fraud as basis for their constitutional claim, because in the Balance Sheet, the Retained Earnings account is growing, alleging that the "for cause" removal restriction prevented this wonderland where the UST gets rich with SPS and, at the same time, FnF are recapitalized, from happening sooner firing Mel Watt well before.
FnF are not building regulatory capital but SPS.
You may say that I'm talking about the almighty attorney David Thompson and the Collins case in the 5th Circuit after the SCOTUS. But no. It's this omnipresent attorney again and with the same claim, now in the Bhatti case (he also showed up in the Rop case in the middle of the game. Attorney for Fairholme as well and Robinson, an important case in 2017)
Today, Oral Arguments in the 8th Circuit Court of Appeals.
This attorney has already stated publicly that he isn't a securities lawyer.
Only the conservator/Treasury are "knowledgeable", not that clueless "Howard".
The trap set by DeMarco for the banks and accomplices sets off.
Our hero. 15 years on, we will leave the conservatorship unscathed, either with an adjusted stock valuation of Book Value per share or with at a PER of 14 times or so (it's the market the one that fine-tunes the ultimate PER valuation) and the JPS recovering their par value.
The plaintiffs approached at the odor of a rebate (one-day share price drop, plus interests through today), and zas! The cheaters have been caught.
I would have used coyote urine for the wolves of Wall Street instead.
This tweet captures the moment when the trap sets off.
PLAINTIFFS RIDICULE ST'S POSTURING
— Conservatives against Trump (@CarlosVignote) February 13, 2024
"2% lower isn't a basis for denying it"
ST pretends to comply w/ the law that bars capital distributions:
-Divs
-Gifted SPS
-Lamberth rebate
Neither the exception (4) in the public interest, nor its Inc Power allow it.#Fanniegate @TheJusticeDept https://t.co/flWAHWtHcB pic.twitter.com/4J6jJiaPkv
There was no actual dividend by any stretch of the imagination.
What do you do when you see a payment RESTRICTED?
A capital distribution #1.
Restriction on Capital Distributions, inserted by HERA chapter: Prompt Corrective Action, into the FHEFSSA. U.S. Code §4614(e)
The exception (A) was satisfied with the cash raised with the double-entry accounting when the Common Equity increased, for the reduction of SPS in the exception (B), through the assessment sent to Treasury. Watch my signature image below to see how it worked out in Freddie Mac.
Stock buybacks are a capital distribution #2 (Definition posted below). This is why the reduction of the SPS in the law is included as an EXCEPTION, when FnF are undercapitalized.
Also, there weren't Earnings available for distribution as dividend out of an Accumulated Deficit Retained Earnings accounts (Balance Sheet = picture of a company at a determined date)
First, you have to learn that a dividend is a distribution of Earnings, they aren't interest payments. So, you have to have it, before distribute something out. It's not a charge on an account like occurs with the quarterly losses charged on a Retained Earnings account, that can be done even if it has negative balance, but a distribution of Earnings.
It's prohibited. Both dividends (#1 in the definition of Capital distribution), today's gifted SPS LP in the absence of dividend to Treasury (#1) and the Lamberth rebate (#3). Zero, nitch, nada.
FHFA said so in the preface of the 2011 Final Rule.
The Adequately Capitalized threshold for the resumption of dividend paymetns, was switched in the Table 8 of the Capital Rule: Payout ratio, for 25% of the Capital Buffer. Therefore, we have to wait a little bit more.
It's a capital distribution that depletes capital and thus, a breach of the FHFA-C's Rehab power.
FHFA said so in the 2011 Final Rule (preface) in light of a response to whether the Securities Litigation judgments (Lamberth rebate) can be paid while FnF remain undercapitalized.
It's not upon declared Undercapitalized (Capital Classification) as you have shamelessly repeated several times, but it states undercapitalized in general, and it starts with IN GENERAL.
It can't use its Incidental Power to override it because it states that "any action" must be "authorized by this section" or the 2011 CFR 1237.12 exception (4) is otherwise in the public interest Source), because it ends with (c) that states that it supplements and shall not replace or affect any othe restriction imposed by statute, which is the one in the U.S. Code §4614(e), which states that it's prohibited, obviously for their recapitalization as Prompt Corrective Action. The concepts have a meaning, there isn't a restriction on a whim. It can't be overridden by regulation just because the conservator claims that it's in the public interest.
This exception (4) or its Incidental Power, might have been used by the FHFA to claim by regulation, after prohibiting the payment of Securities Litigation claims with the exceptional explanation posted above, that serves as Carta Magna of the conservatorship dynamics, that (CFR 1237.13):
Quit submitting Plans of Share Appreciation "overnite signed orders".
You want to restore capital 15 years into Conservatorship, starting from an adjusted $-194 billion Core Capital as of September 30, 2023 (ERCF tables).
The reason why the SPS LP increased for free every quarter (Capital distribution #1. Restricted) is missing in their balance sheets, is explained visually in this screenshot of Freddie Mac. The plotters don't want you to see the offset attached when someone hands out stocks for free and how the Common Equity is held in escrow as a result, complying with the exception to the Restriction on Capital Distributions (CFR1237.12: for Recap) and the FHFA-C's Rehab power: put FnF in a sound and solvent condition.
FnF are NOT building regulatory capital but SPS.
Hence, their $118B Net Worth is the $118B SPS LP absent from the Balance Sheets. Capital Reserve = $0 (amount of Net Worth above the Capital Stock), not $118B, and an invalid capital metric in FnF, subject to the FHEFSSA. That's the Federal Reserve System with its "Capital Surplus".
Also it would prove that the same occurred with the other capital distributions (10% and NWS dividends. Capital distribution #1. Restricted), first applied towards the reduction of the SPS. 12 U.S. Code § 4614 (e). Then, Recap CFR1237.12.
A whopping $402 billion core capital shortfall over Min Leverage Capital requirement?
Just say that you are annoyed because the dividend is kept by FnF for their recapitalization as always, and there's been Regulatory Risk (Basel framework for capital requirements).
Mnuchin didn't say that but the opposite: FnF still owe the SPS LP outstanding.
Thank your Director Thompson for taking the time to come to Tennessee and listen. You have heard the rationale for funding to increase supply and affordability. Lets be creative and monetize the GSE warrants to help with workforce housing. https://t.co/5dxoVIjsyu
— Tim Pagliara (@timpagliara) October 20, 2023
This is why the FHFA cannot overstep.
The threshold of CET1 > 2.5% of Adjusted Total Assets as of the Q3 2023 earnings reports, is the last one, if we want to make sense of this extended Conservatorship.
It allows the redemption of the JPS at their fair value of par value and FnF would meet Tier1 Capital > 2.5% of ATA afterwards (ERCF).
It'd be done by the conservator in order to skip the Redemption Dates with its Incidental Power.
The fair value might not coincide with its Redemption Value, for instance, in FNMFO, a $100,000 par value JPS that has a redemption price of $105,000.
I'd be better to call it stock buyback instead of Redemption, to avoid legal liabilities with their contract that talks about Redemption prices.
Mnuchin's 3% CET1 for the release was snubbed.
He overstepped.
The JPS will never dilute the commons since they are non-convertible stocks to begin with. Hello?
The CEO of Fannie Mae talked to you personally. Sure thing!
Off-topic.
The Initial Commitment Fee, comprised of the Warrant and $1B SPS, both issued for free, is barred in the Charter's Fee Limitation of the U.S., as you point out:
However, I remind you that we are here to legalize every action if possible, to avoid do-overs, knowing that the conservator has the Incidental Power: "Zing!" that allows it to twist or unwind everything that has been done.
Primarily because this is what they really had in mind (Separate Account. July 20, 2011 CFR 1237.12 for a follow-on plan: Recap. "It supplements"). For instance, the capital distributions that went through, despite being restricted, are applied towards the exceptions in the law/CFR (Reduce the SPS/Recap).
Something that can't be done with the Securities Law violations, for which we request a monetary settlement.
In this case, because both handouts are related to the Funding Commitment with SPS (don't call it "credit line" but "financing line of their operations" as per the Charter dynamics and as a last resort -Section Purposes-. Captured in the SPSPA with "upon Capital Deficiency", that is, upon negative Net Worth) and, taking into consideration that the 2nd UST backup of FnF in the Charter Act inserted by HERA, allows an infinite dividend rate on SPS, it can be argued that the Warrant and the initial $1B SPS were a higher compensation on the SPS and not an "entry fee", primarily because FnF are entitled to tap the UST for funds as a last resort, without any shame.
So, no "entry fees" necessary.
This allows them to remain outstanding. Then, when talking about whether they will be eventually executed or monetized:
-Both securities were issued for free and thus, their value was debited from the shareholders' pockets (Additional Paid-In Capital account), which reduced the Core Capital. A breach of the conservator's Rehab power. Then, all part of its "Zing!" power.
-The rates originally set forth in the UST backup of FnF subsection (c) in Fannie Mae, prevail. Estimated at a weighted-average 1.8% cumulative dividend rate on SPS until they were fully repaid, estimated in Dec 2013 and Dec 2014, respectively (Separate Account). Then, "Zing!".
-The Warrant was issued for free to skip the prerequisite (iii) on purchases in the UST's authority in the Charter Act: "to protect the taxpayer", that is, a collateral of its investment in SPS.
The trick to make the UST get a compensation worth a 79.9% stake in FnF, for only $0.00001 per share, either as "entry fee" or a higher yield on SPS, was declared "gross" and snubbed. Then, the security Warrant is considered to have been purchased at a $0 cost, in order to make this security be subject to the aforementioned prerequisite of "collateral".
-Let alone the Warrant prospectus clause 7: non-trasferable, that can be assigned (transferred) to any Person in the clause 2.1, because "the right the receive shares" that is what can be "assigned", is the security Warrant itself.
Two confronting clauses make it void to all effects.
Conservatorship preserves their status as private shareholder-owned companies.
So, there is no such thing as:
Make no mistake. Congress has no say on the Conservatorships of FnF. That is, their Core Capital stands at $268B; Common Equity = $236B; CET1 > 2.5% of Adjusted Total Assets, as of September 30, 2023, under the Separate Account in accordance with the law and basic Finance.
Congress is required for the release from Conservatorship. Very different.
Both are intertwined, because the release is related to the capital levels in FnF (prior MANDATORY release Undercapitalized in the FHEFSSA, when the Core Capital > minimum Leverage capital requirement, struck by HERA) and also in light of the FHFA-C's Rehab power, and the Treasury at the time saw an opportunity to attach it to a Privatized Housing Finance System endgame in the 2011 Report to Congress, when it was required by law to come out with "recommendations on ending the conservatorships".
From the beginning, it was all about removing their privileges that the enterprises and, thus, their Equity holders, enjoy ("FnF are NOT ordinary businesses", by the SCOTUS-appointed amicus), by winding down their Investments Portfolios with PLMBS funded with low cost bonds, thanks, in turn, to their UST backup: Winding down their Investments Portfolios 10% per year, established in the SPSPA. Soon it was changed to 15% per year, until a cap of $250B was reached. This cap was reduced further by Calabria to $225B as of end of 2022.
Also removing their "unfair advantages in capital standards" in the FHEFSSA (quote taken from the 2011 Report to Congress), for delivering below-market guarantee fees, as required in the Charter Act, etc.
All comes down to revoking their Charter with the most precious privilege: a UST backup of their operations as a last resort (either purchasing debt or Equity), expressly written in the section Purposes of congressionally-chartered private corporations, where is laid out their Public Mission that makes them take on more credit risk.
Therefore, we are waiting for Congress for the ultimate Housing Finance System revamp, because it affects FnF if Congress chooses so, otherwise they remain as is, regardless of the option chosen from the 2011 UST's 3 option plan for the release:
1- Privatized Housing Finance System + targeted assistance: FHA, USDA, VA.
2- 1 + Govt guarantee in crisis.
3- 1 + Govt Catastrophic-Loss reinsurance.
Congress might want deeper changes:
-Does it want FnF as public companies like today (the stocks publicly traded), or as private companies owned by stakeholders in Housing Finance, FHLB-style.
This is why FnF have fetched a CET1 > 2.5% of ATA, to get rid of the JPS (AT1 Capital). The "unwanted" Equity holders will be expelled, like occurred with the FHLBank membership in a 2016 Final Rule.
No one cares if the holders of the Non-cumulative dividend JPS are annoyed about the stock valuation 15 years later (fair value = par value), primarily because their dividend should have been resumed (fair value = par value) one year ago in Fannie Mae and two years ago in Freddie Mac (threshold: 25% of Capital Buffer. Table 8: Payout ratio), if they were promised the assault on FnF with anti-loss protection called "anti-dilution" by Bradford and back dividends with the Lamberth rebate, in comparison with a common stock. Each share class has its own stock valuation.
This extended conservatorship might be used to accumulate stocks presumably by the UST through a hedge fund, because of the 2009 deadline to buy securities of FnF. This is a sum-zero game and now the U.S. courts can't be used to make up for the losses for the dividend missed during 1 and 2 years, respectively, with the amount of damages accruing every day, while still trying the great assault on the ownership of FnF with the Govt theft story and the Trump card, which is what the Lamberth rebate looks like.
A shadow agreement between the parties.
Some of them, plaintiffs, will be hit with a penalty in Punitive Damages for a conspiracy in the U.S. courts.
-Chartering authority for the FHFA?
-Will FnF be combined?
-Will the Treasury take advantage of their current market price, taking them over at the stocks' fair value, knowing that only the government is allowed to buy them out at their BVPS (Common Equity per share) and also to sweep their current Deferred Income to itself, aiming to resell them later to bigger players in Housing Finance at an effective PER 14x? It's estimated that the Treasury could make a whopping $349B profit with this option ($151B cash refund due)
-Government Catastrophic-Loss Reinsurance or private?
-The current 10 bps guarantee fee (TCCA fee. Now BBB fee), funneled to Treasury quarterly will be cancelled in a Privatized Housing Finance System. But will it stay or the g-fee will be reduced 10 bps?
-Etc.
The redemption of the JPS is a corporate decision that should be made by the conservator using its Incidental Power, so it can skip their Redemption dates "in the best interests of the FHFA".
Compliance with TIER 1 Capital > 2.5% of ATA afterwards (ERCF)
Rep. Davidson (R-OH) attempted to supplant the law in force, just like Trump with his Presidential Memorandum for the release of FnF from conservatorship and the subsequent Housing Reform Plan in September 2019, where GS's Mnuchin attached China's sought-after Govt Explicit Guarantee on MBSs.
This has nothing to do with the Government Catastrophic-Loss Reinsurance in a Privatized Housing Finance System, option 3 out of the 3 options chosen by the Treasury for the release from Conservatorship in a 2011 Report to Congress, at the request of the Wall Street Reform and Consumer Protection Act (Dodd-Frank law).
At the time, the Treasury recommended guarantee fee increases to remove their advantages in capital standards (the so called Basel framework for capital requirements, now in place for FnF)
DeMarco began to work on it right away (May 2011)
UMBS, CSP,...
And the latest, their commingled securities unveiled on June 2022 for this Government Castastrophic-Loss Reinsurance (resecuritizations), suitable for private reinsurance as well (Source). We can read in the Freddie Mac press release that it was first priced at 50 bps because the FHFA was thinking of the China-sponsored plan submitted by Trump/Mnuchin, but just a few days later it was changed for 9.375 bps to reflect the Privatized Housing Finance System FnF were bound for.
This reinsurance was not meant to make FnF reinsure each other's UMBS as we can see today, with one using the UMBS of the other guarantor inside its own UMBS. A shameful attempt to syphon off revenues from Freddie Mac to Fannie Mae and make up for its losses in the sale of unvervalued assets to Goldman Sachs and Co.
This way, the CEO of Fannie Mae doesn't have to worry about competing with Freddie Mac, if the extortion of money from Freddie Mac goes on (Currently $105B, net, at 9.375 bps), as shown in the data of monthly volume in Fannie Mae with two consecutive months of month-on-month declines, versus the strong growth posted by Freddie Mac. This is because these Resecuritizations don't appear in their Guarantee Portfolios.
Obviously the commingled securities are meant to bring in private capital in the Guaranty Mortgage Securitization Market, to help new guarantors sell their products, at least initially.
We have other examples of attempt to supplant the law in force, like recently the representative from Tennessee, Mr. Ogles, introducing in Congress this bill:
Rep.Davidson again asks UST for a report to Congress due Sept 2021, required by Mnuchin/Calabria (Jan 2021 SPSPA amndt)
— Conservatives against Trump (@CarlosVignote) February 8, 2024
"A statutory requirement...The law"(False)
The report for the release was submitted on Feb2011, at the request of the Dodd-Frank law.#Fanniegate @TheJusticeDept https://t.co/VU9tmWGRGx pic.twitter.com/izcTR4YYCE
CRTs: Continuing the idea that UST hasn't purchased even one security, to skip the prerequisite "to protect the taxpayer" for the Warrant (collateral), none SPS purchased to skip the 2009 deadline and, if that's the case, the securities STACR and CAC (CRTs), issued by Freddie Mac and Fannie Mae, respectively, "to protect the taxpayer" claimed by Sandra Thompson, haven't been purchased either to skip this deadline (besides the lie of protecting from losses)
Have you submitted a Plan of Share Appreciation?
Credit Risk Transfers are illegal in the Charter Act.
It's not a question whether they are high or low or whether they make economic sense. They are huge by the way, as they represent 10 bps guarantee fee income out of 60 bps, and no sense during the Transition Period to build capital and with the Stress Tests.
They are illegal in the Charter Act, in the Credit Enhancement clause.
The authority of the conservator isn't to create a shadow Housing Finance System, in parallel to the one currently in force, Charter Act, that is being violated as a result, even if it's "in the best interests of the FHFA". The FHFA must uphold the law and the accounting principles.
HERA didn't turn the FHFA into an outlaw Federal Agency, as the hedge fund managers stuck to Fanniegate made us believe.
If it's money funneled to UST, then barred in the Fee Limitation clause too.
This is the most likely scenario, due to the slogan of Mnuchin "the taxpayer be adequately compensated", which can only occur in a different Charter.
A slogan repeated by the other Goldman Sachs alumni, Sandra Thompson, in her nomination hearing in the Senate. Coincidence?
Also, Sandra Thompson can't claim that it "protects the taxpayer" because the UST doesn't bear credit risk in FnF, nor "the SPS are taxpayer's losses" (UBS's Hensarling's remark, former financial committee chairman) but obligations issued by FnF. Primarily because the securities "to (iii) protect the taxpayer" (one of the 3 prerequisites on the purchase in the UST's authority) had a deadline on the purchase of December 31, 2009. Let alone that FnF sell the securities STACR and CAS, the don't buy securities.
You may say that, this is precisely why the deadline doesn't apply. Then, back to square one with the securities barred in the Credit Enhancement clause.
Called "responsible innovation" by Mel Watt (Source), a tell-tale sign of a scam. Notice that the unbacked token bitcoin, was called safe innovation by lawmakers, a sign that they are always instructed by bigger players.
Likewise, it isn't a coincidence that the CRT were promoted through annual CRT Symposiums attended by Blackrock and the former UST counselor, Craig Phillips, in turn, former BLK and MS (sued by the FHFA for the sale of fraudulent PLMBSs to FnF), and soon after, the Bitcoin symposiums began to run.
HERA didn't authorize CRTs with FnF in either of its patches inserted in the FHEFSSA or in the Charter Act. It only authorized the UST to do CRTs with its portion (35% to the Capital Magnet Fund) of the funds that FnF allocate to two Affordable Housing Trusts managed by the UST and HUD (4.2 bps on new acquisitions in total)
The amount of CRT expenses, net (turned into Retained Earnings, which is how FnF are protected against future losses. Currently an adjusted $-216B Accumulated Deficit Retained Earnings accounts. What the Capital ratios are for) requested as refund, stands at $18B as of September 30, 2023 ($9B each)
That "overdue report" was submitted to Congress on February 2011, at the request of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Rep. Davidson was referring to a report required by Goldman Sachs' Mnuchin at the UST and Calabria, in the flawed January 14, 2021 SPSPA amendment: "Capital Reserve End Date", etc. Adjusted Capital Reserve= $0, and an invalid capital metric in FnF.
Obviously an attempt to supplant the prior mandate by law for the release from Conservatorship: a 3-option Privatized Housing Finance System revamp. Increase the guarantee fees, etc. Wind down their Investment Portfolios (Charter-barred PLMBSs) funded with low cost bonds thanks to the UST backup of FnF, etc.
A showdown Congress versus FHFA and UST is brewing.
SHOWDOWN
— Conservatives against Trump (@CarlosVignote) February 6, 2024
Rogue UST didn't purchase even 1 security to skip the prerequisite in its 2nd authority(Charter Act)
1-Warrant to(iii)protect the taxpayer(collateral)
2-SPS under(i)(ii):It dodged the Dec2009 deadline.
FnF aren't ordinary businesses(UST backup)#Fanniegate @TheJusticeDept https://t.co/kPMDg1PU9o pic.twitter.com/soUCur44KI
The Supreme Court started out with "Rehabilitate FnF" in the interpretation of the FHFA-C's Incidental Power and it's the part where the prior ruling by judge Willett (5th Cir.) over the same case, asserted that, what is set forth in the law: "any action authorized by this section", are actions "within the enumerated powers",
Don't go far away because it's precisely the FHFA-C's Power that we call "Rehab": "Put (restore) FnF in a sound condition" ("...and solvent condition", related to the ability to pay down debentures, that can be used for the reduction of SPS, a debenture with the taxpayer)
When we are talking about the financial condition of a financial company and, specifically, FnF, soundness is measured in their Balance Sheets at a determined date (picture of a company) with the FHEFSSA capital requirements, numbers outlined later in the ERCF tables (February 16, 2021. Image below. The statutory Minimum Capital Level and capital shortfall, have been posted every quarter in their Earnings reports since day one, with the old 0.45% of MBS Trusts. Now, 2.5%. Regulatory Risk). It's not "sound operations" or "safe operations" because that's the FHFA-R's duty:
What part of "FHFA, an independent agency of the Federal Government" don't you understand?
It hasn't changed with Collins and the SCOTUS that simply struck the "for cause" removal restriction, but nothing about this screenshot.
Then, your
Bradford, a conservator has fiduciary duties other than act in the best interests of the Equity holders, which, by the way, doesn't mean to act against us.
FHFA is acting on our behalf when our Rights and Powers were transferred in the Succession Provision (momentarily) and necessary to carry out its statutory goals. Fiduciary duties emerge and they are owed to us, as always that someone acts on behalf of other.
Judge Sweeney said "fiduciary duty", when it's in plural form "duties", because there are others: loyalty, duty of care, etc.
For instance, Duty of Care might well be set forth in the FHFA-C's Incidental Power, when it states that any action must be "authorized by this section" (certified mail sent to judge Sweeney). These 4 words were omitted by judge Sweeney, a former DOJ employee.
We are dealing with Federal Agencies owned by the banks and hedge funds.
A Conservatorship isn't a temporary Receivership.
Glen Bradford also asserts firmly (fallacies):
1- "spspa conversion", intead of SPS, to pass the 4th SPS certificate amendment off as the 4th SPSPA amendment, in order to get involved secretary Yellen in the flawed January 14th, 2021 SPSPA amendment: "Capital Reserve End Date", 12 days before she was sworn in. Etc.
2- "Anti-dilution protection" in the Non-Convertible JPS, when it's only in the Convertible FNMFO and it isn't anti-loss protection. Besides, he doesn't get that the JPS would be wiped out with the current Balance Sheet (only $118B Net Worth, but $310B SPS outstanding). He wants to apply the "Mnuchin Rule": conversion of SPS and JPS with the same haircut, Mnuchin said so according to Calabria's book. So, we don't even have evidence that he said so.
3- "SPS LP increased for free, are off-balance sheet". False, these gifted SPS LP and its offset (reduction of Retained Earnings account) must show up on the balance sheet. Financial Statement fraud.
4- "SCOTUS said that FHFA can do whatever the hell it wants", when, in reality, it put the premise of "rehabilitation of FnF" that, in a financial company, it's related to Basel framework and also, pursuant to the FHEFSSA capital requirements, a 1992 law enacted exclusively for the soundness of FnF (capital adequacy matters) still in force.
5- "FnF continue to build capital", when the regulatory capital built is wiped out with the offset mentioned. Zero regulatory capital built. FnF build SPS (capital stock).
6- "Capital Reserve = $118 billion", when it's $0 adjusted for the offset when the SPS LP was increased for free (without getting the corresponding cash) in $118B. An invalid capital metric both in the FHEFSSA and under the Basel framework FnF are bound to (Capital Rule effective February 16, 2021), besides the 2011 UST Privatized Housing Finance System revamp, UST chose for the release from Conservatorship, at the request of the Dodd-Frank law.
The last three points, also mentioned by Bill Ackman (for the first point, implying that SCOTUS said FHFA has absolute discretion, in the Pershing slides)
Which makes me wonder, do you happen to know him? Are you being instructed by him as to what to say on Twitter, SA and Ihub?
Is he attempting to negotiate on our behalf, repeating the same lies that you are posting here daily?
Is he another "Fanniegate hero" as you self-proclaim?
The shareholders are being conned.
Unavailable Earnings for distribution as dividend (*)out of Accumulated Deficit Retained Earnings accounts.
A Balance Sheet is a picture of a company at a determined date.
Although a RE account can be negative and still be used to debit losses from, for the distribution of Earnings it's common sense that, at least, it needs to have a positive balance in the company for its distribution.
More evidence that they weren't actual dividends, but a Separate Account, thanks to the FHFA-C's Incidental Power.
For instance, FNMFO is a series of Convertible JPS with a par value of $100,000 per share.
Instead of Fannie Mae deciding a redemption at a redemption price of $105,000 per share, according to the prospectus, their holders decide to convert to FNMA, and, assuming that there is no other conversion of JPS/SPS or the Warrant exercised (then, same common shares outstanding as today), that would activate its anti-dilution protection provision, the conversion ratio is the one established when it was issued: 1,060.3329 common shares per each FNMFO held.
If it's done today, each $100,000 FNMFO would be converted into $1,424, calculated with Friday's price of $1.33 x1,060.3329 common shares.
Obviously, their holders won't request a conversion and they will wait for Fannie Mae to announce a redemption.
Anti-dilution isn't Anti-loss protection. ROFL.
As commented before, although the prospectus talks about adjusting the Conversion Price, the anti-dilution is about adjusting the Conversion rate.
You can't adjust for changes in price in the common stocks.
The underwriters of this IPO should be investigated.
Let me guess, JPM's Jamie Dimon.
Plaintiff hired by Pagliara to repeat "repurchase of Warrant", AIG-style.
FnF are NOT ordinary businesses.
Guido was in charge of this role before.
A security authorized only to (iii) protect the taxpayer, obviously protection from losses (Source). In this world that's called collateral. A guaranty for the repayment of a debenture. Obligations in respect of Capital Stock -SPS-, a debenture with the taxpayer that had to be paid back asap, which is what was done under the guise of dividend payments (Restricted and unavailable Earnings for distribution as dividend while undercapitalized by law and then, threshold of 25% of Capital Buffer by regulation -Table 8 of the Capital Rule: Payout ratio-)
There are ONLY 3 prerequisites in the Authorization of Treasury to Purchase Securities of FnF, after the determination of EMERGENCY: Conservatorship, pursuant to (G) manufactured LOSSES: likely to incur losses that deplete all of its capital. About future losses, not past losses like this plaintiff repeats, echoing Washington Federal's lawsuit.
Losses incurred with the Obama's programs (flawed Incurred Loss accounting standard), when FnF had to set aside a reserve equal to the concession granted to borrowers in modified loans; the 10% dividend either depleted capital or it directly caused the losses and subsequent draws from UST (SPS); the DTA valuation allowance; initial $1B SPS issued for free that reduced $1B the Core Capital -Additional Paid-In Capital account-, barred in the FHFA-C's Rehab power). All legal, but let's say that there was a problem of attitude.
The Warrant was issued for free (its value was debited from the Additional Paid-In Capital account -Core Capital- like any other security issued/increased for free. Breach of the FHFA-C's Rehab power) to evade this prerequisite on PURCHASES, as a kind of "entry fee" for a funding commitment that is an essential part of the Charter dynamics since the Charter's inception. So, don't tell me that FnF have to pay an "entry fee" for the funding commitment they are entitled to, as a last resort to fund its operations (section Purposes), better known as UST backup of FnF.
This UST backup is the reason why FnF get funds on the market just a few basis points above the Treasury yields, and not due to the big lie of "Govt Implicit Guarantee on MBS" or due to a machiavellian Conservatorship, where ST claims that now the MBS have an Explicit guarantee from the Treasury. More fallacies, because their MBS are now fully guaranteed by FnF as always.
Besides, the Warrant was meant for the assault on the ownership by Wall Street.
Clause 2.1 in the prospectus:
Finally, what's the point in repeating the Charter's Fee Limitation of the United States, if later you don't see it refers to a collateral too.
BOTTOM LINE
The U.S. Treasury should be taught the lesson of its role in congressionally-chartered private corporations with a clear Public Mission that makes them increase their risk (section Purposes: charge less to low- and moderate- income families, countercyclical role in the secondary market during a financial crisis -2008, not COVID crisis- and Duty to Serve), different to the FHLBanks' Charter, otherwise there will always be a Goldman Sachs alumni out there scheming plans of deception, that will be hired by the Administration for a con operation.
The compensation to UST was assessed at a weighted average 1.8% cumulative dividend rate on SPS (applying a 0.5% spread over Treasuries. It was a 0.299% spread in the bailout of the FHLBanks by Congress in 1989 -GAO report-), netted out with the interests on $151 billion owed to FnF, as per the original subsection (c) any obligation of (b) redeemable obligations (such as SPS), in the Charter Act.
FNMFO is a CONVERTIBLE preferred stock, unlike all others Non-Convertible preferred stocks outstanding, according to its Prospectus (contract).
Although the entire prospectus uses as reference the concept of "Conversion Price" fixed at $94.31 at the time of issuance, I guess that this is a typo and what is fixed is the "Conversion Rate" into FNMA at 1,060.3329. Then, it states that it's adjusted for the common stocks outstanding at the time (anti-dilution), thinking of the resulting stake in Common Stock after the conversion.
This is why Glen Bradford talks about anti-dilution of his JPS to fool us. It relates to dilution in the resulting stake in Common Stock, not that they can't be diluted in price (losses) and, secondly, this term doesn't exist in a non-convertible JPS, because they have never had a conversion rate as reference and subsequent possible stake in Common Stock. So, they can never have anti-dilution adjustments.
The plotters want to, first of all, make up a conversion rate when there is none, and then, anti-dilution adjustment for themselves but referring to "anti-loss protection", after leaving the Fanniegate scandal in a case of "Equity restructuring", where no SPS has been repaid, more SPS are issued as if by magic every quarter and there is still the Warrant outstanding.
What I see is a negotiation of the hedge funds and bankers, holders of Non-Convertible JPS, with the U.S. Treasury that holds SPS and the Warrant, aiming to share the booty.
Both parties use the Judiciary to bless their unlawful actions.
Finally, there was another Convertible JPS called FANIP, that had MANDATORY conversion into FNMA at 1.8182 (Conversion Rate) on May 13, 2011, "subject to anti-dilution adjustments in certain circumstances", according to a Fannie Mae press release at the time, such as the Warrant, evidence that the Treasury determined in 2011, that the Warrant will NEVER be exercised, otherwise FANIP's conversion rate should have been adjusted.
I can't check out this "anti-dilution" provision because Fannie Mae has removed the prospectus from its website, but a comparison with FNMFO reveals what it is about.
Remember: Regulatory Risk and stock valuation. Non-negotiable.
It seems that you've made up a quote from Sandra Thompson "when asked about the plan for exit from the Government Conservatorships":
“We would defer to Congress on the exit for the GSEs,” Sandra Thompson, acting director and nominee to permanently head @FHFA.
— National Mortgage News (@NatMortgageNews) January 22, 2022
By @bcynic https://t.co/caKktHDj3v
CONGRESS-FHFA SHOWDOWN
— Conservatives against Trump (@CarlosVignote) January 25, 2024
The UST's authority chose a Housing Fin.Sys revamp for the release,but FHFA overstepped:
-Asking for🆕Charter authority
-JPS,unwanted(CET1>2.5%)
-Merger FnF: FNMA's HQ lease cut short "if it's significantly changed"
-Lamberth:Back divs+Atty fees.#Fanniegate https://t.co/kqzxVXFd3X pic.twitter.com/4uTotg7AOP
(*)Core Capital >2.5% of MBS Trusts versus 0.45% before.
This threshold for the Total Assets, is the prior MANDATORY release Undercapitalized in the FHEFSSA, struck by Calabria/Pelosi's HERA.
That's called Regulatory Risk.
Core Capital is similar to Tier 1 Capital.
As of September 30, 2023, FnF fetched CET1 > 2.5% of Adjusted Total Assets.
It means that the JPS can be redeemed. Then, Tier 1 Capital > 2.5% of ATA (ERCF) again.
Not only the FHFA wanted to get rid of the JPS (AT1 Capital) before Congress chooses one of the 3 options for the Privatized Housing Finance System revamp, that the Treasury came up with in 2011 for the release, but also, if the Separate Account would have been unveiled when the real threshold was met, the JPS couldn't have been redeemed at their par value yet, as the threshold that marks the resumption of dividend payments wouldn't have been met yet (25% of Capital Buffers).
Even when the latter was met (chart), FHFA snubbed it because it didn't want the JPS lingering in the capital structure trading at their par value, and it went all the way to CET1 > 2.5% of ATA to redeem them.
This is the famous expulsion of the unwanted shareholders it already carried out with the FHLB membership in a 2016 Final Rule, that was first proposed in 2010. They were hedge funds unrelated to Housing Finance, that used insurers to have access to the FHLB low cost funding. FHFA called them "captives" and expelled.
This is essential if we are waiting for Congress to announce a Privatized Housing Finance System revamp for the release of FnF.
Now, FHFA wants the JPS to get the missed dividend payments (estimated 1 year in Fannie Mae, 2 years in Freddie Mac), and that's the reason of the Lamberth rebate.
The FHFA also wants its attorney-mercenaries to get paid for stock price manipulation, using part of the Lamberth rebate. Likely, claiming that it's "an outstanding obligation to be honored", like the dividend declared but not paid in Fannie Mae on day one of Conservatorship.
Phony damage and illegal Class Action, the plotters will have to pay the Equity holders $4.8B in Punitive Damages, along with the rest of the gang.
FHFA provides the definition of Common Equity.
Common Equity TIER 1 capital = Common Equity TIER 1 capital elements + regulatory adjustments.
12 CFR 1240.20(b)
The Common Equity TIER 1 capital elements are:
+Common stock par value, less Treasury Stock (stock buybacks)
+Paid-In Capital
+Retained Earnings account
+AOCI
kthaput19 repeats