Fannie Mae-No Politics (FNMA)

[FOFreddie]

Hi Kthomp,

UST could potentially make the most money and settle the derivative claims if they agreed to make a large derivative settlement with FNF.

Step one:

Agree to a $ 100 bn settlement of derivate suit. This settles the derivative litigation and capitalizes FNF for risk based capital rules.

Step Two: Keep the SPS in place and require FNF to sell common, convertible preferred, new JPS and possible COCO debt to redeem SPS equal to $ 100 bn

Step Three: As sales proceeds come in and SPS redeemed pay off $ 100 bn settlement

Step Four: Exercise warrants and sell shares

Net effect - 0 cash outlay, Capital levels are reached with the SPS remaining in place until redeemed and UST makes money of its 80% warrant stake.