Fannie Mae-No Politics (FNMA)

[YanksGhost]

Maybe I'm not explaining it correctly. Collins is suing co-defendants Treasury and FHFA. No telling how much the amount will be, but the most popular working number is $30 B.

Tresaury is funded by taxpayer dollars via tax revenues and can pay its share out of reserves. FHFA is only funded by assessments they charge the GSEs. Assuming they are ordered by the court to pay their share of a settlemet... say $15 B... the only way they can pay their legal obligation bill would be to CHARGE the GSEs for the cost. Plus any court-awarded legal expenses. That amount would likely exceed the GSEs expected income for one year. That amount is enough to make them insolvent because they are unable to pay their obligations.

There is no certainty on how a court might structure awards in Collins. The much larger potential award would be in the Perry/Lamberth remand which could be substantially larger than $30 B. The Sweeney consolidated cases do not cite FHFA as a defendant so the GSEs would have no cost in any settlement, leaving UST on the hook for the whole enchilada.