Fannie Mae-No Politics (FNMA)

[Chronic The Hemp Hog]

This news although not unexpected is not bad news at all. The GSEs continue to be recapped through retained earnings until the next event which would be the SCOTUS ruling. Future incoming administration for Treasury and FHFA can't change this amendment for them to stop retaining earnings until a SCOTUS ruling on the NWS.
--WHY?--
Because you have already publicly committed to the recapitalizing of the the GSEs. The FHFA is appointed as conservator. If they change course on this and suddenly say no we will continue to take your money after saying no we won't will definitely look bad in the eyes of future litigation if not the current ongoing litigation. How can a conservator by definition allow you to hold on to capital and then suddenly say no and still be considered a conservator. I guess this is the big question in the eyes of the SCOTUS right now.

To me it all points back to the amendment allowing the GSEs to retain capital up to $45 billion combined. That amendment came very shortly after the 5th circuit ruled in favor of the plaintiffs. They had to stop taking money--they had a court ruling against them continuing the practice. The sweep will end once and for all and only if the SCOTUS decide in favor of the shareholders.