Fannie Mae-No Politics (FNMA)

[kthomp19]

No where has a Judge ruled that paying down the SPS is not allowed.

WRONG!

On page 16 of Judge Lamberth's ruling on the motion for summary judgment on October 3 2022:

First, before the Third Amendment, the PSPAs and Treasury Stock Certificates prohibited the GSEs from paying down Treasury’s Liquidation Preference absent certain conditions that have never in fact occurred, and the Third Amendment did not change that.

That specifically and directly proves you wrong. The judge in the jury trial that you mention said FnF COULD NOT pay down the SPS liquidation preference.

And if you check footnote 4 just below that quote, you will see that even the plaintiffs admitted that it's true! All they said was that the SPSPAs could have later been amended to allow paydown, thereby implicitly admitting that the SPSPAs (both before and after the NWS) did NOT allow such voluntary paydown.

It’s written in the contract Optional Pay Down of Liquidation Preference.

There are conditions on that optional paydown, and those conditions - as Judge Lamberth correctly pointed out - "have never in fact occurred" (his own words).

The opposite of what you said is actually true: no judge has ever ruled that FnF could have paid down the liquidation preference whenever they wanted to.

The Third Amendment cannot be used to wipe out the 10 and 12 percent dividend rates in the initial stock certificates.

Yes it can, and it did.

THE DAMAGES ARE the extra payments to Treasury must be treated first as though they were a return of capital that calls for a dollar-for-dollar redemption of the senior preferred, thereby reducing the Treasury’s liquidation preference

Wrong again. The jury trial that you're talking about is in Judge Lamberth's court, and what you seem to be missing is that Treasury is NOT a defendant.

The actual defendants are Fannie and Freddie themselves, with FHFA only listed as a defendant because it made the decision to sign the NWS on FnF's behalf as conservator.