Fannie Mae-No Politics (FNMA)

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1) HERA states: Sec. 1117. Temporary authority for purchase of obligations of regulated entities by Secretary of Treasury. “….Treasury is authorized to purchase any obligations and other securities issued by the corporation under any section of this Act, on such terms and conditions as the Secretary may determine and in such amounts as the Secretary may determine…”

‘‘(2) RIGHTS; SALE OF OBLIGATIONS AND SECURITIES.— ‘‘(A) EXERCISE OF RIGHTS.—The Secretary of the Treasury may, at any time, exercise any rights received in connection with such purchases.”

- HERA only gave Treasury the ability to purchase securities and exercise the rights of those securities.

2) SPSPA - “6.12. Non-Severability. In the event that any provision of this Agreement, the Senior Preferred Stock or the Warrant is determined to be illegal or unenforceable, then Purchaser may, in its sole discretion, by written notice to Conservator and Seller, declare this Agreement null and void, whereupon all transfers hereunder…”

- This is a CONTRACT, and contract law applies. Parties are Treasury and Fannie Mae with Conservator as authorized by HERA, agent.

Court, if so inclined, can find any part of the contract unenforceable, in part entirety, whatever, including the "Non-Severability" clause itself. And the law that applies will just depend.

HERA does not say purchaser is the only one that can deem it void.

Fun Fact - Treasury can dispose of the securities as it is a "right" that can be exercised.