Fannie Mae-No Politics (FNMA)

[bcde]

"the SPS certificate actually provides only limited possibilities to buy back the SPS. As long as treasury's commitment exists, a repurchase is excluded:

"Prior to termination of Commitment... the company may pay down the Liquidation Preference... but only to the extend of (i) accrued and unpaid dividends..."
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Fully Diluted,
Thanks, It is a matter of understanding the semantics. So below explanation appears repetitive trying to make it very clear.

SPSPA, SPS, Warrants,NWS are all private agreements and can be canceled by either party as per terms of SPSPA. Laws ban one sided forced perpetual agreements. So there is no meaning to the saying that SPS can not be purchased back if they can be canceled..

SPS remain valid until SPSPA is cancelled as per original SPSPA. But if one goes by original SPSPA the liquidation preference value (LPV) of SPS changes depending on the draws and repayments. More ever SPSPA is a mutual agreement and any party can cancel SPS as per terms of SPSPA.

As per original SPSPA, when FnF keep on paying back more than the 10% dividends they owe, then the LPV will comes down and FnF owe lesser amount of dividends next time. Eventually LPV should become zero. Currently LPV value should be negative because FnF have paid back more than they owe as per original SPSPA.

In 2012 when FnF became profitable, crooks realized that FnF can pay down SPS LPV and get out of conservatorship. So they forced NWS, so that FnF can never pay back LPV. Under NWS, LPV keeps on going up when FnF draw from SPS up to $200B limit but never comes down because of NWS.

The very nature of NWS makes it completely illegal because it amounts to racketeering or loan sharking. If private parties were to use NWS, then Gov would have prosecuted them under RICO.

It is amazing that no plaintiff attorneys have filed complaints for NWS racketeering or loan sharking.