Fannie Mae-No Politics (FNMA)

[camaro4me]

There's more, imo of course. We have to see what Janet Yellen does.

FHFA was created to oversee FnF. James Lockhart was the director, nominated by President Bush and confirmed by the senate. Not an acting director, Lockhart has to go by the law.


Then spspa was written, containing section 6.7 which states that if any order, injunction, or decree is issued by any court.....the Purchaser
may by written notice to Conservator and Seller declare this Agreement null and void, whereupon all transfers hereunder (including the issuance of the Senior Preferred Stock and the Warrant and any funding of the Commitment) shall be rescinded and unwound and all obligations of the parties (other than to effectuate such rescission and unwind) shall immediately and automatically terminate.

Why SCOTUS opinion is good for common shares:
1. The structure of FHFA is unconstitutional. The decisions for spspa, warrants, treasury preferred are invalid as the decisions were made by a Director (not Acting Director). No more Senior P debt.
“The judgment of the Court of Appeals is affirmed in part, reversed in part, and vacated in part, and the case is remanded for further proceedings consistent with this opinion.
It is so ordered.”
That’s an order. Section 6.7 spspa is in effect.
2. P shareholders win the APA claim, which also helps C holders (someone please remind me what that is)
3. Treasury is not sucking out proceeds from the NWS, but C shares aren’t able to benefit from profits. Directors, not Acting Directors, COULD have corrected the language in the 3rd amendment. Damages started once Director (Watt?) was in place 2014, IF a lower court determines that damages are warranted.
4. SCOTUS remanded to lower courts for P share compensation, which may never come.
5. Calabria’s 4% Capital Rule is dead. Watt’s Capital Rule is 2% (although I have not gone back to verify that) FnF have cash now for 2%. .
6. Accelerated redemption of P shares (per letter put out about a month ago) plus 2% Capital Rule will put FnF in condition to release. No more Junior P share debt. No debt at all.
7. Lamberth’s deadline request for documents is in July. (from Jose yesterday: The parties are asking Judge Lamberth to extend Treasury’s deadline to respond to Fairholme’s sealed discovery motion to July 13. The parties say they’ve resolved one attorney-client privilege dispute and may be able to resolve some more if given more time)
8. The Federal Circuit has scheduled oral argument on the appeals from Judge Sweeney’s decisions for 10:00 a.m. Aug 4.