Fannie Mae-No Politics (FNMA)

[obiterdictum]

How can the En Banc panel rule FHFA exceeded its statutory conservator authority implementing the net worth sweep, but then that same net worth sweep not be held illegal?

It is a common procedure for an Appeals Courts to reverse a lower court's ruling while providing reasons for doing so and then to remand the allegation back to the lower court for further proceedings under the direction/guidance given in those reasonings.

Or could/would it be declared illegal once the District Court rules with the plaintiffs?

In civil cases like these, "illegal" is not the applicable term to use. "Illegal" involves criminal offenses, violations of criminal law, that lead to prison time, etc.

In civil cases like this one, it is administrative and statutory laws that are violated (i.e. APA, HERA). So, when the final adjudication occurs in District Court, "illegal" will not be used in the decision. Rather, what will be written and publicly stated is that an agency or its representatives (officers, employees, etc.) acted or failed to act appropriately in an official capacity or within the limits of statutory authority governing their behavior and actions. Relief or compensation may or may not be given.

To my knowledge, none of the existing FNMA/FMCC court cases are criminal cases. They are all civil cases seeking declaratory and injunctive relief and monetary compensation.