Fannie Mae-No Politics (FNMA)

[bcde]

"Why? Was it an investment or a loan?"

If SPS is an equity investment as claimed by the both FHFA, UST and accounted in books by FnF, then SPS is callable at the option of FnF. All dividend payments are unlawful under HERA. So FnF only owe UST the net withdrawals less dividend payments.

IF SPS was a loan, then all loan obligations have been overpaid by about $30B. UST needs to return $30B back to FnF.

Some JPS holders are peddling conversion of SPS in to CS. But there are so many serious problems with this idea.

1. UST does not have any legal authority to convert SPS to anything else but redeem for cash.

2. SPS contracts do not have any option to convert SPS to anything else but redeem for cash..

3. Even when SPS is converted to CS, then FnF lose SPS creditline and that creates big market uncertainty. Under this situation no investor will buy UST Common shares. With the SPS conversion, FnF become Gov undertakings, and all the $5T liabilities go on to US balance sheet. But all these things can not done without Congressional law.

4. So if SPS are converted then there is no way FnF can attract any new capital from private investors.

The path to release FnF and capitalize them is very simple and straight forward. It is 100% safe and there are no risks involved.

1. Release FnF from FHFA conservatorship
2. List FnF shares on big stock exchanges
3. Set SPS LPV to zero as fully paid
4 Continue SPS as creditline similar to Fed discount window
5. Allow FnF to buy back warrants at nominal price.

Let companies be independently managed by shareholder elected BOD for few years and raise capital through retained capital. When FnF are stabilized as independent private companies then FnF can go to markets for raising capital.