Fannie Mae-No Politics (FNMA)

[Barrario]

jtimothyhoward

SEPTEMBER 9, 2016 AT 5:53 PM

I just heard about it. But I’m not shocked. This was a case that originally was before Judge Thapar, who in July recused himself because he discovered that his wife owned 16 shares of Fannie Mae stock. The case then was given to Chief Judge Caldwell.

My strong suspicion is that after (or perhaps even before) Judge Caldwell got the case, she realized that (a) a ruling on the same issue was currently on appeal from the DC District Court, and (b) it’s a hot potato, and she said to herself, “I’m not going to be the one to rule against the government on a $100 billion-plus lawsuit; I’m agreeing with Lamberth” (whose ruling is on appeal).

But the Robinson decision (the Kentucky case) really doesn’t change anything. Lamberth’s interpretation of HERA– that it allows FHFA as conservator to do whatever it wants with Fannie and Freddie–is now before the DC District Court of Appeals. And as I note in my response to the comment below, if the appellate judges were going to uphold Lamberth they would have done so months ago. The fact that haven’t strongly suggests they either will reverse it, or remand it to the lower court for fact finding and subsequent adjudication.

Yes, this is a defeat for Fannie and Freddie, but I don’t believe it is one of any significance.