Fannie Mae-No Politics (FNMA)

[kthomp19]

But to blanket statement that there are NO future lawsuits is ridiculous.

That would be ridiculous, but it's also not what I said. Read my post again. I never said there will be no future lawsuits.

I only said that there is no reason to believe there ever will be future lawsuits, because lawsuits that would seek to prevent dilution would have to be filed in advance, and all others either face such great difficulties that there is no reason to believe they will ever be filed or would at most result in minor, inconsequential victories.

The only way you can know that there will NOT be any lawsuits in the future is if you are a time traveler or psychic. Otherwise it is pure speculation, not something to be stated as fact.

The only way you can know that there WILL be any lawsuits in the future is if you are a time traveler or psychic, or if you plan to file them yourself. You are the one who presented your opinions as facts.

For 1, 2, 3, 4 - trying to craft an injunctive lawsuit for a future damage that may or may not happen based on an action that the govt may or may not take is much more difficult than based on actual FHFA/Treasury actions.

But that's the only way to actually prevent the dilution from warrant exercise or a senior-to-common conversion. Once the shares are issued the genie can't be put back into the bottle. An after-the-fact lawsuit against Treasury could only result in money damages, and if it's a takings or illegal exaction lawsuit that amount would be limited to the drop in share price from one day to the next.

Seniors are repayable once capital thresholds are met per the "Optional Pay Down of Liquidation Preference".

No. The seniors are and have always been non-repayable. The fact that you mention "Optional Pay Down of Liquidation Preference" means you have probably been giving far more credence to Rodney than he deserves. The "Optional Pay Down of Liquidation Preference" prior to the termination of the funding commitment (and it has never terminated) only applies to liquidation preference increases due to partial or missing dividend or commitment fee payments. None of those have ever occurred.

I refer you to Section 3(a) of the senior preferred stock certificates (emphasis added):

rior to termination of the Commitment, and subject to any limitations which may be imposed by law and the provisions below, the Company may pay down the Liquidation Preference of all outstanding shares of the Senior Preferred Stock pro rata, at any time, out of funds legally available therefor, but only to the extent of (i) accrued and unpaid dividends previously added to the Liquidation Preference pursuant to Section 8 below and not repaid by any prior pay down of Liquidation Preference and (ii) Periodic Commitment Fees previously added to the Liquidation Preference pursuant to Section 8 below and not repaid by any prior pay down of Liquidation Preference.

There it is in black and white. FnF cannot repay the senior pref liquidation preference. All increases to it were a result of draws from Treasury and the letter agreements in 2019 and 2021, neither of which are covered by (i) or (ii) above.

FHFA can inflate the capital requirements to whatever they want, come up with any ridiculous rule they please, and refuse to release.

Yes. I already showed you the law that allows them to do that.

This can result in a MQD as why would they have the authority to usurp the intended functions of the Charter?

Highly speculative stuff here. Again, the only way you can even think such a lawsuit might be filed is if you plan to do so yourself. Do you?

Not to mention an Appropriations issue that is still outstanding.

The Appropriations issue has absolutely nothing to do with FHFA's authority, granted by HERA in 12 USC 4612(c), to set capital requirements above the statutory minimum.

Again, anyone who thinks there will not be any lawsuits in the future is free to think that. But don't try to convince the rational world that it's a fact.

What I'm trying to show is that there is no reason to believe that any future lawsuits will matter at all. Treasury clearly didn't fear them when they were negotiating a senior-to-common conversion in late 2020. What's the point of such threats if they will have no effect?

And again, you are the one who stated "[action] = lawsuit" no less than five times in your first post in this thread. If you don't want people stating opinions as facts, start by not doing so yourself.

FHFA paying damages from GSE coffers = lawsuit. Warrants exercised = lawsuit. Attempted SPS cramdown = lawsuit. Having to pay down current LP of SPS based on NWS = lawsuit. GSEs reach capital requirements and not released = lawsuit.