The DOJ via Chad Readler recently filed an Amicus Brief against the structure of the CFBP, which has the same structure as the FHFA.
Collins has Count IV Constitutional Claims that get fully briefed Monday, which are against FHFA's identical structure, where Chad Readler has been defending as Acting Assistant Attorney General.
I own preferred shares and think that the net worth sweep may stop as early as this month, but that's me speculating. It might take a while longer.
Fannie Mae (OTCQB:FNMA) and Freddie Mac (OTCQB:FMCC) are two companies that are privately owned, but are run by a government agency that has handed all their money over to another government agency for nearly a decade. The agency that has been set to regulate Fannie and Freddie is the Federal Housing Finance Agency (FHFA). On Friday, the DOJ went after the CFPB in an Amicus Brief:
FHFA is structured similar to the CFPB. It's worth noting that Chad R. Readler is defending FHFA while simultaneously attacking the CFPB for what are in effect the same claims.
Investment Thesis: Companies that make money are not usually forced out of business and the incoming administration is rapidly approaching its first crossroads where it must show its hand. The sweep is scheduled for later this month, and in the middle of next month, investors get to learn if Trump's administration is going to continue Obama's tactics of making plaintiffs fight tooth and nail to get access to discovery documents that have been withheld. More recently, the DOJ has charted a new course, and in a recent Amicus Brief has suggested that the CFPB was improperly structured. FHFA is structured the same way and plaintiffs in the Collins lawsuit are saying that is a reason to vacate the sweep. The Collins motion becomes fully briefed Monday and a ruling can be expected in ~3 months. If the net worth sweep is stopped by law or by the administration, my preferred shares will likely soar in value as the market would begin anticipating a conservatorship that ends via recapitalization instead of decapitation.
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