Fannie Mae-No Politics (FNMA)

[kthomp19]

This is the crux of the argument. The 3rd amendment seems to allow Watt to withhold payment because he effectively controls the board of directors of Fannie and Freddie. We also have the Hindes/Jacobs case (is that the right one?) that claims the NWS dividends are not legally available for distribution.

The quoted text from HERA below also empowers Watt to withhold dividend payments; they clearly endanger the solvency and safety of the GSEs.

By my reading and interpretation, Watt truly does have legal authority to not pay the NWS.

PSPA 3rd Amendment

Paragraph 2(a) (partial, emphasis added):

(a)For each Dividend Period from the date of the initial issuance of the Senior Preferred Stock through and including December 31, 2012, holders of outstanding shares of Senior Preferred Stock shall be entitled to receive, ratably, when, as and if declared by the Board of Directors, in its sole discretion, out of funds legally available therefor, cumulative cash dividends at the annual rate per share equal to the then-current Dividend Rate on the then-current Liquidation Preference. For each Dividend Period from January 1, 2013, holders of outstanding shares of Senior Preferred Stock shall be entitled to receive, ratably, when, as and if declared by the Board of Directors, in its sole discretion, out of funds legally available therefor, cumulative cash dividends in an amount equal to the then-current Dividend Amount.

HERA text

Sec. 1367(b)(B)(iv):

‘(B) OPERATE THE REGULATED ENTITY- The Agency may, as conservator or receiver--

‘(iv) preserve and conserve the assets and property of the regulated entity; and