Fannie Mae (FNMA)

[FOFreddie]

Hi No Name,

Why does UST have any claim beyond the original $ 1 bn of SPS under the original deal.

There was no consideration given for the 3rd Amendment and if you look at the 2011 and 2012 10Ks the investors disclosures made it clear that the SPSA advances would be paid down to the $ 1bn level until the UST Funding Commitments ended. All the UST was entitled to was the $ 1 bn and interest at 10%. They could have asked for a Commitment Fee but they waived that.

I know you are an experienced bankruptcy court lawyer so the principles of equity seem clear whereby the 3rd Amendment would be set aside as a fraudulent conveyance or preference. I know this is not a bankruptcy estate but the principles of equity hold.

The summary judgement decision from Lamberth will determine if the implied covenants survive the Collins decisions but the SPSA contract terms were clear and investors relied on the 34 Act disclosures.

Regarding the cramdown - are you saying that new Housing Legislation will enforce a cramdown? It is not clear to me who you think will effect this cramdown?