Fannie Mae-No Politics (FNMA)

[familymang]

Ackman comments on GSEs in annual letter today. O look, he confirmed what I have been telling this board for weeks now but my comments keep getting removed because apparently "you cant handle the truth". Sweeney/takings case is dead unless SCOTUS decides to take it. All that's left for her to do is rubberstamp the court of appeals ruling dismissing the case in totality.

"Fannie Mae (“FNMA” or “Fannie”) and Freddie Mac (“FMCC or “Freddie”) (together “the GSEs”)

Fannie and Freddie suffered large stock price declines of 66% and 64%, respectively, in 2021, primarily driven by a Supreme Court ruling in June that was adverse to shareholders, as we previously discussed in detail in our Semi-Annual report. Shareholders suffered another legal blow in February 2022, when the Court of Appeals for the Federal Circuit ruled decisively against the plaintiffs in the takings cases filed in the Court of Federal Claims, which will end this litigation unless the Supreme Court decides to review the decision.

Despite these disappointing outcomes in the courts, we believe that the GSEs’ exit from conservatorship remains a question of when and not if, as their role as the irreplaceable core of the U.S. housing finance system is now broadly acknowledged across the political spectrum. Privatization of Fannie and Freddie will ensure that private capital bears the first loss in any future real estate dislocation, rather than having Treasury or U.S. taxpayers bear the risk. As common shareholders, we own valuable perpetual options on both entities that we believe will be worth many multiples of today’s prices once re-privatization occurs. The perpetual nature of these options protects our investment even if Fannie and Freddie do not exit conservatorship for years. In the meantime, both entities continue to build capital through retained earnings and now have combined capital of $75 billion.