Fannie Mae-No Politics (FNMA)

[FOFreddie]

Good Morning Rodney,

This is clearly the risk and unfairness of the SPS Liquidation Preference. We need a litigation win or a perceived win to get a good resolution for the Compromise of Debt Reg so that UST is forced to or agrees to wipe out most of the Liquidation Pref.

Table 3 of the GSE Restructuring Paper lays out the SPS Cramdown scenario well:

https://www.cbo.gov/publication/56511

We need a new Admin or a litigation win at some point but not necessarily the existing litigation. A major shareholder could bring new litigation to challenge a cram down and would have a lot of financial incentive to do so. Perhaps it will take new litigation to fully flush out the Charter Act issues you have so adeptly highlighted.

Thanks again for your efforts.