Fannie Mae-No Politics (FNMA)

[FOFreddie]

The two major holders of FNMA Common will have a seat at the table when negotiations happen. Bill Ackman will most likely be a strong advocate for the common shareholders. Capital Group which is the parent company for The Growth Fund of America has over $1.8 trillion in AUM and has been in business since the 1930s with a headquarters in Los Angeles. Los Angeles is also the residence of the US Treasury Secretary.

The FHFA Director as Conservator will most likely avoid a scenario where there is a perception that the process was unfair for one set of existing public investors. HERA gives the FHFA director wide discretion but it may be unlikely that the current Director would want to perpetuate the legacy of the past Administration.

The future path for current litigation will be materially impacted by how SCOTUS rules on Seila and if they act on the related cases. Perhaps it is waste of time to speculate until SCOTUS rules.