Fannie Mae-No Politics (FNMA)

[FOFreddie]

If SCOTUS rules against the JB Admin in the CFPB case the open issue is whether the FHFA is just as unconstitutionally structured as the CFPB. Will SCOTUS handle this in the CFPB case or will the 5th Circuit rule on the REMAND of the Collins case leaving SCOTUS the decision to grant Cert or not. Unless SCOTUS definitively decides - the future preferences of the GSE cash flows most likely will be invalid. Congress did not have the power to structure the FHFA in a way to violate the Appropriations clause and the FHFA does not have the power to increase the liquidation preference under the SPSA and possibly a new NWS. This is different from Collins because the issue is the Congressional power of the purse and not the Unitary power of the President. Nothing may happen until it matters but for sure the JB Admin wont be able to pursue an Admin action. Otherwise as time passes - common shareholders will have more incentive to challenge the future operation of the SPSA since there are billions more that should be allocated to shareholders and not the UST.