Fannie Mae-No Politics (FNMA)

[Robert from yahoo bd]

"Dr. Dharan’s PIK analysis in his supplement also falls squarely within opinions he offered
prior to the first trial. Dr. Dharan previously opined in his prior rebuttal report that in lieu of the
Net Worth Sweep, “FHFA could have announced that future dividends that exceeded the GSEs’
net worth in a particular quarter would be paid in kind . . . This would have left the commitment
available to address shortfalls occurring in the ordinary course of business, including in stress
scenarios.” Dharan Rebuttal Rpt. ¶ 32. He further explained that there “is no reason” the payment
in kind option “would not have served the goals claimed by Dr. Attari as effectively in 2012 as the
Net Worth Sweep.” Id. ¶ 34. Dr. Dharan offered the same testimony at trial—i.e., that the
payment-in-kind option was preferable for addressing the alleged problem of circular draws given
that it would have eliminated the need for circular draws without depriving the GSEs of their
capital and forcing them to pay the Deferred Tax Assets in cash. Trial Tr. 1256:14–1257:20.

Relatedly, Dr. Dharan has from the outset opined that the Net Worth Sweep made the GSEs
worse off by depriving them of all of their capital for no good reason. Dharan Rpt. ¶¶ 79–81, 91;
Trial Tr. 1136:9–1137:8; 1270:13–:22. Further, he has opined that it forced them to pay the Deferred Tax Assets out in cash when it was entirely unnecessary to do so. Dharan Rpt. ¶ 113;
Trial. Tr. 1272:17–24; 1274:5–:13."