Fannie Mae-No Politics (FNMA)

[kthomp19]

If this was a nationalization then the courts would have the authority to rule as such and provide the remedy.

The USCFC only has the authority to award money damages. They can use the de facto nationalization that the SPSPAs and NWS represented to decide whether and how much to award, but their ruling will just be "plaintiffs win $X" or "plaintiffs lose".

If there was no economic value due to the government takings and no compensation provided, isn't that a nationalization? Or are you saying there was a takings but there was still some economic value despite effectively taking 100% of the net worth of the companies.

The latter. The existing commons and juniors technically have no economic value right now because FnF's book equity is less than the liquidation preference of the seniors, and the seniors' dividends, by the time they turn back on, will likely eat up all of FnF's income, leaving none available to pay dividends to the existing shares.

The reason the shares still have some positive value in the market is that those who are willing to buy and hold the shares see a chance that the arrangement could change in a way that restores economic value to those shares.

So which one wins? A constitutional violation or a contractual right?

Two different claims, two different courts. They could both win, both lose, or one of each.

If the CFC court wins I don't see why it is not possible for them to rule on nationalization pay the remedy and wipe out shareholders forever.

See my first sentence above. Extinguishing the existing shares is beyond the USCFC's authority.