Fannie Mae-No Politics (FNMA)

[kthomp19]

The minimal capital rules has everything to do with Ginnie, the same 1.25% makes it an industry standard

Calabria is in no way bound by any "industry standard".

the minimal capital level is hard to re-propose as in other documentation (CCF) they argue 2.5% is sufficient, and since that was in 2018, it would be serious flip flopping to re-propose it now on the same details

I agree here, I think Calabria's minimum capital standard will be around $140B (2.5% of FnF's total assets).

The problem is that FnF have negative $170B in core capital right now, and cancelling or converting the seniors only makes up $193B of that $310B gap. The rest will have to come from retained earnings and an SPO, and if the SPO is to happen in 12 months then retained earnings will be around $20B of that. This means a $100B equity raise, in line with Calabria's comment of "does anyone have $100B lying around?"

The contracts the companies have are under severe dispute in dozens of lawsuits and nowhere legal even if they think they are

The only part of the SPSPAs under dispute by any plaintiff other than Washington Federal is the NWS. FHFA and Treasury are also allowed to proceed as if everything is legal until and unless a court says it isn't.

FHFA conservator power vanishes after the 1.25% critical capital is surpassed, as 4617(a)(1) says “Notwithstanding any other provision of Federal or State law, the Director may appoint the Agency as conservator or receiver for a regulated entity”
(However it still needs to submit a capital restoration plan)
So after Fannie has 42B in the books the conservatorship will end as the law is obeyed

Completely wrong. There is nothing in HERA that says FHFA must release FnF upon meeting any particular capital level, let alone the one you specify. To prove this wrong you can quote the relevant part of HERA. Please do, if able.

MC more than ones said he wants bank like capital and that is Basel III with a max of 3.75%

That would be terrible news for current common shareholders because it means much more of FnF's capital will come from the sale of new common shares as opposed to retained earnings. Basel III also puts requirements on CET1 equity (that can only be met with common equity, even non-cumulative preferred equity doesn't count). If Calabria decides to impose Basel III requirements on FnF, we're looking at several hundred billion dollars of common shares being sold. The existing commons would be lucky to stay above $0.25 per share.

when declared illegal because it is unconstitutional

Once again you are making the completely unjustified assumption that all of HERA is going to be wiped out. obiterdictum made two great posts showing that not only does the Supreme Court not have to strike down all of HERA if it finds part of it unconstitutional, even though HERA does not have a severability clause, it is unlikely that it will happen anyway.

This is clearly outside the scope of 2)Executive Power and cannot be challenged in 3) Judicial Power I do not see any reason why it would be legal, please explain

At this point, legal is what the Supreme Court says it is. The Fifth Circuit only changed the removal clause, leaving the rest of HERA intact. That en banc panel clearly believes that such an action was legal, so if you want an explanation I recommend you read their opinions again.