Fannie Mae-No Politics (FNMA)

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So The Treasury holds $120,836M in equity, this equity was build up thru the years
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Right. For more clarity, every time FnF took a draw from Treasury there were two accounting entries: add the amount of the draw to both cash and the senior pref stock line. That kept the books balanced.

Then whenever FnF made a dividend payment (either before or after the NWS) they would deduct that amount from both cash and retained earnings. That's why there is such an enormous accumulated deficit, and why its size is in the ballpark of the size of the senior pref balance. It's also why the accounting entries to write off the seniors, were that to happen, would be to deduct that amount from the senior pref line and add it to retained earnings/accumulated deficit. This would have no net effect on overall shareholder equity, but would be necessary to meet regulatory capital requirements (as well as raise capital).

Converting the seniors to common would add that amount to additional paid-in capital rather than retained earnings, but otherwise the effects are the same.

right and because it paid the treasury their entire net worth as dividend, those funds are gone, so now we will just have to wait for SCOTUS, to see exactly how fair or unfair that is

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and on the invested money, treasury wants a 10% annual interest that will come due each quarter(~1.78%) on the outstanding SPS
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Actually it's closer 2.5% per quarter, which makes sense because the annual rate is 10%. Take one of the pre-NWS dividend payments ($2.929B in 2012 Q3) and divide by the senior pref balance at the time ($116.149B); it's just over 2.5%.

Correct per quarter 2.5% if you add it to the outstanding balance, and use it to pay down the SPS you will have to use the 1.78% as that is close to 10% annual 10.03 something

No. The original contract wasn't meant to wind down FnF. That contract was signed in September 2008 while George W. Bush was still president. It's President Obama who wanted FnF wound down, and the NWS was signed on his watch.

The original PSPA was supposed to wind down the company, it does not contain an exit, “With today’s announcement, we are taking the next step toward responsibly winding down Fannie Mae and Freddie Mac, while continuing to support the necessary process of repair and recovery in the housing market,” said Michael Stegman https://www.treasury.gov/press-center/press-releases/Pages/tg1684.aspx

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holding that a conservator can legally duly appoint itself, without any statutory control, and implement a “wind-down” contract “the PSPA”, while at the same time it is protected under a conservatorship statute(courts cannot take action)
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No. Courts can only not take action to review a decision FHFA made as conservator if the court finds that action to not be ultra vires. 4617(f) is not even close to being full blanket protection, as the Fifth Circuit en banc majority and the government's own lawyer in the Collins oral arguments said.

(f)LIMITATION ON COURT ACTION
Except as provided in this section or at the request of the Director, no court may take any action to restrain or affect the exercise of powers or functions of the Agency as a conservator or a receiver.

Incorrect, the FHFA has full blanket protection under FHFA-C statute, the FHFA takes “an action” and the action is dismissed by courts because the FHFA-C took this action while being the FHFA itself, so important here, the powers of the FHFA (Not FHFA-C) must be legal, and that is what is questioned, so 4617(f) is incorrect

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the 3th amendment holds that the dividends fannie paid to treasury $165B during 2012-2019, ($20B 2008-2011) belong to the government because the amendment clearly tells this is the case
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The dividing line is actually after 2012 Q4. The first dividend payment under the NWS in Table 2 is listed as 2013 Q1, for whatever reason.

The breakdown in payments for Fannie is $31.427B pre-NWS and $153.3B post-NWS.

Noted thanks

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so to sum-up:
$117,149 Fannie received from Treasury
$165,910 Fannie paid in dividends from 2012-2019
$19,813 Fannie paid in dividends from 2008-2011
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Actually it's $119.836B (see Table 1), $153.5B (see above), and $31.427B (see above).

The 3,687 CECL draw (119,836-117,149) would not have been needed if the 3th is void-ab-initio

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on “for cause” Collins and Treasury agree so we know $19,813 is not legal
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No. Your conclusion does not logically follow from your premise. You are assuming that the Supreme Court will unwind the entire SPSPAs (which would be disastrous for the housing finance market and the economy as a whole) when nobody is asking them to.

If the FHFA did not have the power to enact, anything they did is void (“for cause”) as at the time the power to do so was missing, it follows the payments made under this structure are void too, not voidable, but just void, it doesn’t necessarily mean it will undo everything the FHFA ever did, but it is a difficult negotiation process for the FHFA
Then the PSPA itself will also be void, not voidable, as it could not have been performed under the law, to keep such a contract will be a bridge too far imo, as the foundation is taken away, the disastrous outcome you and others predict is however Illogical based on nothing, as we had quite of couple of decades with the same regulation, with even less capital, the facts surrounding the presumption are absent

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Then we have the 3th amendment, this is illegal no question about it, under this agreement fannie gave $165,91M to treasury, if it is void the funds will have to come back, Collins suggest to pay down the SPS, so that would be 165,910 – 117,149 = surplus $48,761M and there would be no SPS outstanding
No. If the seniors are voided, some of FnF's past payments would be recharacterized as paying the 2.5% quarterly dividend before the seniors were counterfactually (and contrary to the original contract) paid down. The amount of Fannie's total overpayment, taking that into account, is actually $14.209B, not $48.761B.
David Thompson quoted $29.5B on page 69 of the Collins Supreme Court oral argument transcript, and that was for both Fannie and Freddie combined. My calculations came up with $14.2B for Fannie and $14.9B for Freddie; rounding errors probably account for the $0.4B difference.

MR. THOMPSON: Thank you, Your Honor. Our preferred remedy that we articulated to the Fifth Circuit Court of Appeals en banc is that the overpayments measured against the
18.9 billion dollars of dividends that were being paid, that anything above that be treated as a paydown of principal on the government's liquidation preference. And if you do the math, the government's been paid back in toto plus 10 percent interest, and there's 29.5 billion dollars left over.

It first scratched my head too, my guess is Thompson is taking about payments Q4 2008 – Q4 2011 = 19,81 not 18.9, (could be a slip of the tong), the 29.5 he is talking about is the payment made from Q1 2012 – Q3 2019 then if you deduct the amount from the outstanding balance and add 10% annually (or1.78% a quarter) you have the amount for Fannie of $29.5B left over (0.5% rounding difference) (Freddie $24.5)

1) The warrants are legal until and unless a court rules them to be otherwise.

Correct if Collins loses on both counts they are legal from the beginning

2) The redactions in the documents have nothing to do with the Collins case because they are not challenging the conservatorships.

Correct Collins is only asking are the black sheets allowed legal or not, we will see the outcome soon

3) 12 USC 4617(a)(6) specifically shields the boards from liability over fiduciary duties to shareholders when acquiescing to conservatorship:

Correct, they only have to show the documents and terms on which they gave the shareholder rights away

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(6) Directors not liable for acquiescing in appointment of conservator or receiver

The members of the board of directors of a regulated entity shall not be liable to the shareholders or creditors of the regulated entity for acquiescing in or consenting in good faith to the appointment of the Agency as conservator or receiver for that regulated entity.
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So there can be no lawsuit over your supposed breach of duty. Well, not one that would get anywhere; it would be immediately dismissed in light of the part of HERA I just quoted.

Then if the 3th is void (not voidable), the FHFA-C breached the BOD’s good faith, the optics a very important, this will be perceived as wrongdoing by the government

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So it logically follows when the government sold its share in Fannie Mae the explicit became an implicit guarantee
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There never was an explicit guarantee on FnF's MBS or debt at any point. Section 6.6 just spells that out.

You misunderstood fannie in 1968 onward had implicit before 1968 it was explicit, same for Freddie in 1989

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but for sure we know the 3th is illegal and the PSPA is illegal because it cannot be paid down, given those 2 facts, the easiest way out is to declare the SPS paid and void the amendments and contract
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Neither of those two things is a fact. Both are speculation. The Supreme Court has not made their ruling yet.

It is the world’s view the 3th is illegal, (at least by people understanding the matter) those opinions are expressed, that doesn’t necessarily mean the SCOTUS or any other court will also think the worlds opinion or view is correct and it does not have to take anything into account, but most likely if “everybody” thinks it is illegal, most likely (so not for sure!) the court will also think it is illegal, if persons express something it is an opinion, mine, yours, everybody, so it is all opinions combined who most likely will predict the outcome on all this

You can make a very strong case that the NWS is illegal. The case that the original SPSPAs are illegal is much, much weaker and no current plaintiff has ever tried to have them overturned.

Voiding the entire agreement might be simple in theory, but in practice it would be enormously complicated and could be catastrophic to the economy. No Treasury backstop could mean panic selling of MBS and the companies themselves could very well go under. Be very, very careful what you wish for.

As stated above the $400B explicit guarantees compared to the $6.4T market is negligible (6.3% compared to 100%) is not enough to shake up the markets, facts surrounding the presumptions are not known anywhere, and the current implicit guarantee will stay, and nobody makes a fuss about it, it just stays the way it always has been implicit for $6.4T