Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Any idea of the Notice of Appeals Deadlines for Plaintiffs and/or Defendants?
30 days, 60 days?
They own a ton of JPS, I think! The Executive from Berkeley testified at the opening when several people (aka Victim Plaintiffs from the Class) where introduced to the Jurors as who the Plaintiffs are.
Not only were hard working Americans and Retirees ripped off here, but also pension funds, Community Savings Banks, and yes Property Casualty insurers like Berkeley!
Plaintiffs Attorney asked him, "So when an insurance company suffers like it has here, does that impact insurance rates regular consumers pay?"
Berkeley Insurance: "Of Course!"
They flashed up a screen of their JPS holdings and yes it was substantial but I can't remember if was from the past or current.
In the 4th federal circuit, it looks like the Appeals deadline is 30 days for non governmental Appellate's and 60 days for governmental Appellate's, FROM THE DATE OF ENTRY OF JUDGEMENT.
Not sure if it's the same in the DC Federal District Court.
https://www.ca4.uscourts.gov/AppellateProcedureGuide/General_Provisions/APG-appellatedeadlines.html
Did Royce sign it?
It may not be that much, simply because we are talking billions and hundreds of millions in a case like this.
I've got a 50 plus page printout of the case summary in my office, but haven't looked for the Plantiffs Class Fee Agreement, as the commons aren't expecting a big payout like the JPS are.
Do you see it on PACER anywhere (hopefully it's not yet another Gubmint protected document !)?
I don't think you can calculate your take home pay without first deducting the legal fees and costs.
Probably on PACER somewhere is the Class Plaintiffs Attorneys Fee and Costs agreement I would imagine, although I have no idea.
I'm sure the Litigation costs money and it may or may not be over.
FYI: Fannie Mae and Freddie Mac (as well as Ginnie Mae, the VA, and the FHA) make the 30 year PREPAYABLE AT ANY TIME WITHOUT A PREPAYMENT PENALTY Fixed Rate Mortgage possible for hard working American Families.
Few countries around the world offer this financing option to their citizens:
https://www.nytimes.com/2023/07/19/business/uk-mortgages-interest-rates.html
"Many people in Britain have mortgages with a rate that is fixed for only a short period, commonly two or five years, unlike U.S. mortgage rates, which are often fixed for 30 years. The average rate on two-year fixed-rate mortgages has risen to the highest level since 2008."
https://www.reuters.com/business/little-relief-indebted-canadian-homeowners-mortgage-rates-seen-higher-longer-2023-08-23/
"Nearly all Canadian mortgages have a term of five years or less, compared with the 30-year term that is common in the United States. As of January 2023, residential mortgage debt stood at C$2.08 trillion ($1.53 trillion), according to the Canada Mortgage and Housing Corporation (CMHC).
It means that when roughly 20% of Canadian mortgages come up for renewal in the next year, it will likely put many borrowers in a tougher financial spot than they could have expected just a few months ago. Mortgage rates tend to track moves in the bond market with a lag."
So, FRM = Fixed Rate Mortgage.
https://www.politico.com/story/2012/04/demarco-only-fraction-of-mortgage-owners-helped-074988
https://www.washingtonpost.com/opinions/edward-demarcos-defensible-decision-against-mortgage-relief/2012/08/01/gJQAdyw8PX_story.html
Subscribe
Sign in
clock
This article was published more than 11 years ago
OPINIONS
Editorials
Columns
Guest opinions
Cartoons
Submit a guest opinion
Today's Opinions newsletter
THE POST'S VIEW
Edward DeMarco’s defensible decision against mortgage relief
By the Editorial Board
August 1, 2012 at 6:37 p.m. EDT
Share
Comment
EDWARD J. DeMARCO is once again in the Obama administration's doghouse. The acting director of the Federal Housing Finance Agency (FHFA), which oversees Fannie Mae and Freddie Mac while they are in federal conservatorship, has refused to allow the mortgage giants to offer debt reductions to homeowners who owe more on their properties than they are worth on the market. Mr. DeMarco's refusal has incurred the wrath of the administration and a wider circle of mostly left-leaning critics who say that he is standing in the way of a nearly costless measure that would aid economic recovery.
The truth is that Mr. DeMarco has made a defensible judgment call on a politically polarized question that is, in policy terms, actually very close.
Basically, the Obama administration proposes to write down the loan balances of up to a half-million underwater borrowers, saving them tens of billions of dollars — the equivalent of a middle-class tax cut in both size and stimulative impact.
Who would pay? Partly, Fannie and Freddie’s bondholders, because they would get bought out at par, instead of the premium at which the securities currently trade. Also partly, taxpayers, who would supply a $2.7?billion subsidy from the leftover Treasury Department’s Troubled Assets Relief Program (TARP). But when you factor in the benefit to Fannie and Freddie from fewer defaults, the taxpayer actually comes out almost $1?billion ahead, according to a Treasury analysis.
Not so fast, says Mr. DeMarco. The vast majority — 75 percent — of Fannie and Freddie’s 4.6 million underwater borrowers (fewer than half the national total of 11 million, by the way) are current on their loans. As soon as underwater homeowners get wind of the fact that Fannie and Freddie are offering write-downs to some borrowers who are in default, others who are not in default will try to get in on the action. If there are as few as 3,000 “strategic defaults,” Mr. DeMarco argues, the principal reductions will result in net losses to the taxpayer.
Many of Mr. DeMarco’s critics say that isn’t a legitimate objection for him because his only legal role is to protect the financial soundness of Fannie and Freddie; Treasury is in charge of the federal deficit. Mr. DeMarco’s statutory mandate includes the responsibility to make sure Fannie and Freddie “preserve and conserve” their (taxpayer-supplied) capital, as well as operate “consistent with the public interest.” That can be read to include not only the fiscal impact of two organizations that have already absorbed more than $188 billion in taxpayer aid but also the market repercussions of offering principal reductions to some people who have stopped meeting their contractual obligations while others have sacrificed to keep theirs.
In a letter to Mr. DeMarco lamenting his decision, Treasury Secretary Timothy F. Geithner says that he isn't giving up. That's his right. But with signs multiplying that the housing market may be finally bottoming out without this additional stimulus, perpetuating this particular battle does not strike us as the best use of the secretary's time."
22:30 MM, BO talks about Winding Down the GSES. Then he also immediately pumps up Obamacare as well.
11 years ago, they thought eliminating the GSE'S would start a stampede of private capital into the 30 year prepayable FRM.
The exact opposite has happened.
There was a speech BO gave in Arizona, where he was waiving his finger proclaiming the GSE'S would not be around.
As I recall, the 2011 White Paper focused on reducing the Government's footprint in the Secondary Mortgage Market and increasing the private sector footprint.
11 years later, the exact opposite has happened.
Here's a crazy idea, follow HERA and release the twins!
That's right Louie! Since when has the US Constitution ever stopped a POTUS from spending money on his targeted voting base?
The Courts, via Chevron Deference, Executive Privilege and National Security Exemptions, continue to allow this type of behavior from the Executive Branch to go unchecked.
All the Executive Branch has to do is find a vague and broadly written Statute and have the 4th Branch of Government fulfil the POTUS promise to his targeted voting base.
After spending 6 weeks watching the Lamberth trials, it seems very likely that the POTUS tried to fund a Mortgage Loan Forgiveness program or some other program with the upcoming highly foreseeable profits of the GSES.
Nice! Here, the Government refuses to allow the GSE'S to escape the debtor creditor relationship and continues the defacto Nationalizations into perpetuity.
For the Courts to continue allowing the Status Quo is surreal and absurd.
We'll see what happens.
Pg. 4, In Tyler: "...the Court constrained the government’s ability to redefine property interests to permit it to take private property that it otherwise could not, without
providing just compensation. The Court held that the government cannot “sidestep the Takings
Clause by disavowing traditional property interests in assets it wishes to appropriate.” Id. at 1375
(quotations omitted). In other words, the government cannot make an end-run around the Takings
Clause by redefining property interests in a manner that excludes any expectation that a private
property owner will be able to retain an interest.
As the Supreme Court explained, because the Takings Clause itself does not define property,
courts draw on existing rules and understandings about property rights. Id. Although a government
statute is one important source, it “cannot be the only source.” Id. Indeed, the Takings Clause
“would be a dead letter if a state could simply exclude from its definition of property any interest
that the state wished to take.” Id. (quoting Phillips v. Wash. Legal Foundation, 524 U. S. 156, 165–168
(1998)).2 Rather, under the Tyler framework, courts must also “look to ‘traditional property law
principles,’ plus historical practice and [Supreme Court] precedents.” Id.
The Federal Circuit in Fairholme, however, failed to conduct any such analysis.3 Its discussion
of the relevant property interest under the Takings Clause focused entirely on the effect of HERA
on plaintiffs’ property rights and failed to consider traditional property law principles. Considering the new framework the Supreme Court announced in Tyler, Fairholme’s analysis of what constitutes a
cognizable property interest is now incomplete and inadequate.
Footnote 2 & 3:
2 Although Tyler concerned a state statute, the Fifth Amendment’s Takings Clause likewise
constrains the Government’s ability to redefine property interests under federal law.
3 The Fairholme Plaintiffs also failed to brief traditional property law principles and their application
to the definition of the relevant property interests in these actions. That failure further demonstrates
that Fairholme has no preclusive effect."
Pg. 4, In Tyler: "...the Court constrained the government’s ability to
redefine property interests to permit it to take private property that it otherwise could not, without
providing just compensation. The Court held that the government cannot “sidestep the Takings
Clause by disavowing traditional property interests in assets it wishes to appropriate.” Id. at 1375
(quotations omitted). In other words, the government cannot make an end-run around the Takings
Clause by redefining property interests in a manner that excludes any expectation that a private
property owner will be able to retain an interest.
As the Supreme Court explained, because the Takings Clause itself does not define property,
courts draw on existing rules and understandings about property rights. Id. Although a government
statute is one important source, it “cannot be the only source.” Id. Indeed, the Takings Clause
“would be a dead letter if a state could simply exclude from its definition of property any interest
that the state wished to take.” Id. (quoting Phillips v. Wash. Legal Foundation, 524 U. S. 156, 165–168
(1998)).2 Rather, under the Tyler framework, courts must also “look to ‘traditional property law
principles,’ plus historical practice and [Supreme Court] precedents.” Id.
The Federal Circuit in Fairholme, however, failed to conduct any such analysis.3 Its discussion
of the relevant property interest under the Takings Clause focused entirely on the effect of HERA
on plaintiffs’ property rights and failed to consider traditional property law principles. Considering the new framework the Supreme Court announced in Tyler, Fairholme’s analysis of what constitutes a
cognizable property interest is now incomplete and inadequate.
Footnote 2 & 3:
2 Although Tyler concerned a state statute, the Fifth Amendment’s Takings Clause likewise
constrains the Government’s ability to redefine property interests under federal law.
3 The Fairholme Plaintiffs also failed to brief traditional property law principles and their application
to the definition of the relevant property interests in these actions. That failure further demonstrates
that Fairholme has no preclusive effect."
An enduring principle: Bryndon, page 2-3: "Although HERA conferred broad authority on FHFA as conservator to conduct the business of the Enterprises, including permitting FHFA to consider both the interests of the Enterprises and the interests of the public, that authority is necessarily limited by the Constitution."
This is US Court of Federal Claims (Remember J. Margaret Sweeney?):
Bryndon Fisher, Bruce Reid, and Erick
Shipmon, derivatively on behalf of Federal
National Mortgage Association,
Plaintiffs,
v.
The United States of America,
Defendant,
and Federal National Mortgage Association,
Nominal Defendant.
No. 13-608C
(Judge Sweeney)
Bruce Reid and Bryndon Fisher,
derivatively on behalf of Federal
Home Loan Mortgage Corporation,
Plaintiffs,
v.
The United States of America,
Defendant,
and Federal Home Loan Mortgage
Corporation,
Nominal Defendant.
No. 14-152C
(Judge Sweeney)
Bryndon: "Tyler asked whether the Government can extinguish a property
right through the passage of a statute—the same question at issue in Fairholme. The Tyler Court held
that the Government cannot “sidestep the Takings Clause by disavowing traditional property
interests in assets it wishes to appropriate.” Id. The same is true here."
"First, the Supreme Court’s unanimous decision in Tyler abrogates the Federal Circuit’s
decision in Fairholme concerning the merits of derivative takings claims. It is binding on this Court.
Accordingly, this Court cannot simply dismiss these actions under Fairholme but must reevaluate whether Derivative Plaintiffs have stated a takings claim on the merits under the new analytical
framework the Supreme Court announced in Tyler.
Second, Tyler also constitutes intervening controlling authority that undermines the Federal
Circuit’s decision in Fairholme and negates any basis for claim or issue preclusion. In light of this
change in controlling precedent, neither this Court nor the Court of Appeals is precluded from
considering Derivative Plaintiffs takings claims on the merits.
Third, even if this Court were to conclude that it is bound by Fairholme, that decision does
not have any preclusive effect because the Fairholme plaintiffs did not adequately represent the
Enterprises’ interests. The Fairholme plaintiffs and their counsel faced serious conflicts of interest in
litigating derivative takings claims and instead focused almost exclusively on their direct claims, as
evidenced by the way they prosecuted their case both in this Court and the Federal Circuit. The
Fairholme plaintiffs’ indifference or even hostility to the Enterprises’ derivative claims may have
contributed to the Federal Circuit’s decision on the merits. In fact, the Fairholme plaintiffs did not
even brief the merits of the derivative takings claim on appeal, undermining any notion that the
Federal Circuit’s decision on those issues—which the Government contends should have preclusive
effect—was the product of litigation by parties adequately representing the Enterprises’ interests.
Given the changed legal landscape and the inadequacy of the representatives of the
Enterprises in the related cases, the Court should afford Derivative Plaintiffs a full opportunity to
litigate their derivative takings claim on behalf of the Enterprises."
11 years ago, the August 17, 2012, Net Worth Sweep was to "Wind down" the GSE'S and reduce their footprint in the marketplace.
https://home.treasury.gov/news/press-releases/tg1684
"Treasury Department Announces Further Steps to Expedite Wind Down of Fannie Mae and Freddie Mac"
11 years later, the exact opposite has happened.
Hint: There's many reasons why banks don't want to wait 30 years at a fixed interest rate to get their money back.
Imbellish, I'm on Page 4 of Uncle Suggy's Motion (our tax dollars hard at work !), and was thinking about how the Breach of the Shareholders Implied Contract Verdict of late and the Government's Violation of one of the Shareholders 'straws of rights' could come into play here in this new Taking Complaint of Bryndon's.
Any thoughts or comments?
Gubmint: "The Court acknowledged that “State law is one important source” of
those rules and understandings, but stated that it cannot be the only source, or a State could
““sidestep the Takings Clause by disavowing traditional property interests’ in assets it wishes to
appropriate.” Id. (quoting Phillips, 524 U.S. at 167) (additional citations omitted). The Supreme
Court, therefore, “also look[s] to ‘traditional property law principles,’ plus historical practice and
[the Supreme] Court’s precedents.” Id. (quoting Phillips, 524 U.S., at 165–168) (also citing
United States v. Causby, 328 U.S. 256, 260–267 (1946); Ruckelshaus v. Monsanto Co., 467 U.S.
986, 1001–1004 (1984)). The Supreme Court performed this analysis in Tyler, finding that
“[t]he principle that a government may not take more from a taxpayer than she owes can trace its
origins at least as far back as Runnymeade in 1215.” id. at 1376. Applying that principle, the
Court held that Ms. Tyler possessed a property interest cognizable under the Fifth Amendment.
Id."
Thanks Imbellish! I actually wanted to watch Tyler live at the SCOTUS, but I was booked up that day.
PLF has just been slam dunking the ball at the USSCT lately, and what a perfect Sympathetic Plaintiff that was!
That's interesting, so Bryndon is arguing Tyler applies, could I trouble you for the link to his Pleading?
No I agree, playing both seems like the intelligent and mature thing to do, but it all boils down to ones risk tolerance and position in their overall Portfolio Mix. Plus, what has EVER been logical about this super bizarre fact pattern and 15 year CONservatorships?
I just want my damn companies back from the clutches of my Uncle Suggy !
Thanks for the link and all your contributions!
He'll NEVER convert voluntarily, HeeeeHeeee! That's okay, I could care less what others do with their time or money.
He's finally come to the conclusion that Common is the way to play this and deciding what his new handle will be in postings on ihub....
As I recall, these cases were denied Certerrori (as are the vast majority of petitions for a writ of Certerrori). Thus, the federal circuit appellate court decision that the "Shareholders had no right to Exclude" and therefore no Taking stood.
The Libertarian, Alan Greenspan was convinced that the "Free Markets" know best, but the largely unregulated Private Label MBS, with its subsequent race to the bottom in pricing and risks ushered in the Great Financial Crisis of 2007-8.
Of course Fannie Mae and Freddie Mac were required to provide liquidity to the US Secondary Mortgage Market and bought up the garbage PLS loans (Freddie, as of July 23 still has close to $1B left in their Portfolio). The US TREASURY and Demarco initiated the August 17, 2012, Net Worth Swipe and here we are today, 15 YEARS later, 2 Nationalized.
When the US Treasury AND your federal Regulator/CONservator decide to put you out of business or "Wind down" your business it ain't easy to fix it.
Did I mention that the Plaintiffs are just a "Bunch of Evil Mortgage Banksters/Hedge fund guys" who were responsible, single handedly, for the Great Financial Crisis of 2007-8?
"We're going to Salt the Earth with the Shareholders Carcasses, they'll figure this out real quick." ! Jimmy Parrot Summer of '12
The chicken or egg first problem - "It's up to the US Congress to decide the future of the US Housing Finance Market." - Sandra L Thompson
"I'm from the 4th Branch of Government and I'm here to help!"
§ 1237.13 Payment of Securities Litigation Claims while in conservatorship.
(a) Payment of Securities Litigation Claims while in conservatorship. The Agency, as conservator, will not pay a Securities Litigation Claim against a regulated entity, except to the extent the Director determines is in the interest of the conservatorship.
Q: Wouldn't it be in the interests of the Conservatorships to pay outstanding Securities Litigation Claims?
A: Yes, because it allows for the eventual orderly exit from the Conservatorships by eliminating outstanding liability claims.
Nice find, thanks for the information!
Thanks again for your great work here! After spending weeks upon weeks in the Courtroom watching the trials, it's becoming increasingly clear that the US Treasury and FHFA not only have dirt on their hands but are hiding a tremendous amount of facts and information from the American People.
Not only have hard working Americans and Retirees and their pensions been adversely impacted but also their Community Banks and Insurance Companies.
The costs of the losses from the Nationalizations are borne by all Americans and Businesses and the tripling of Guarantee Fees is a direct tax not only on the American Dream but it's passed through to renters and Multifamily residential dwellings as well.
And the FHFA and UST are as recalcitrant as ever.
Allegedly, the GSE'S will be released one day and the Judgment will remain there to be satisfied. In Virginia, I've had Judgment's paid (with simple interest added) 10 years later after I attached the Judgment to the Defendants real property and they decided to sell.
Eventually they will pay.
Why does a Conservatee have to pay for the damages incurred by the Conservator's arbitrary or unreasonable actions?
Doesn't HERA exclude that type of protection?
If yes, then could the corporations sue the Conservator or does the "Super Powers" of this government conservator render the FHFA immune and shielded?
I thought DeMarco at both trials, enjoyed his grave dancing testimonies too much and was proud of his decision to "wind down" the GSE'S and subsequently salt the earth with the Shareholders Carcasses.
Amazing, that after 11 years of signing off on the Nationalization of 2 great American Corporations, the FHFA and UST are as recalcitrant as ever!
Great letter Van! Only changes I would make are:
(1) Instead of Hank Paulson "threat" (he's an R), I would use "coercion" or a different yet similar word like "pressured". I think HERA was satisfied when the Board of Directors signed the paperwork. If you can quote Hank Paulson from his book when he describes just how he got the GSE's Board of Directors to sign off on the Conservatorships that'd be great. Morgan Stanley's CEO told Ben Bernake, "We'll go down in flames before I agree to these terms!"
(2). I would add the italized underlined part if you want too: "Homeownership for hard working middle class American Families has become more expensive due to inflated commitment fees and a tripling of Guarantee Fees on mortgages, directly impacting citizens seeking to establish stable residences."
Ert, what's the weekend plan? Boat and I are coming by again on Friday afternoon to pick up your Mom and will drop her off on the front lawn Sunday morning.
Can you and the boys come up from the basement and make sure she's sober this time and takes a shower before we pick her up?
I think par for the course in these situations is: trial, 3 Judge Panel, and then a request for EnBanc hearing that will either be granted or denied, then Petition for a Writ of Certerrori that will usually be denied but rarely granted as in Collins.
Multi Billion Dollar Litigation just takes time....
So close, and YET so far in 2019! So is it 3 Judges or EnBanc this time?