Fannie Mae-No Politics (FNMA)

[GAK-]

"In a conservatorship, stakeholders are protected because the company is operating and stakeholders are being paid according to their contractual rights (as modified by any contract changes and resulting payment of damages by the conservator). As a result, all stakeholders including shareholders receive payment in the normal course of business and there is no need to resort to the priority of payment provisions of an insolvency law." (Calabria and Kimminger, p. 43)

"Failure to abide by these principles [including fair treatment of shareholders] will undermine market confidence, and 'uncertainty about the priority of and process for resolving creditors’ claims against Fannie or Freddie could CURTAIL THE FIRM'S ACCESS TO CREDIT and reduce the market value and liquidity of those claims.'"
-(Calabria and Kimminger, p. 47)


https://www.cato.org/publications/working-paper/conservatorships-fannie-mae-freddie-mac-actions-violate-hera-established