Fannie Mae-No Politics (FNMA)

[Rodney5]

Kthomp19 said Quote: “ I get it, the way the Supreme Court ruled makes no damn sense to any of us. But it's the reality we have to deal with. Contradicting the Supreme Court is not going to get you very far.” End of Quote

As you also said, Quote: “While this is correct, according to the Supreme Court it doesn't matter.” End of Quote

The Lawyers brought the wrong argument the lawyers focused on the contract FHFA and Treasury signed.

The Senior Preferred Stock Purchase Agreement, Optional Pay Down of Liquidation Preference Following termination of the Commitment. The Senior Preferred Stock Purchase Agreement is a contract not the law.

Bryndon, gave us the calculation of the pay down of the liquidation preference . Now if he will apply the LAW written in HERA.

https://drive.google.com/file/d/15978NWfDcTtuClMBnwgWFmoPnwK94vWn/view

THE LAW


HOUSING AND ECONOMIC RECOVERY ACT OF 2008

Quote: “Page 2732

EXCEPTION.—Notwithstanding paragraph (1), the Director may permit a regulated entity, to the extent appropriate or applicable, to repurchase, redeem, retire, or otherwise acquire shares or ownership interests if the repurchase, redemption, retirement, or other acquisition— ‘‘(A) is made in connection with the issuance of additional shares or obligations of the regulated entity in at least an equivalent amount; and ‘‘(B) will reduce the financial obligations of the regulated entity or otherwise improve the financial condition of the entity.’’.

NOTE: REPURCHASE, REDEEM, RETIRE...

WILL REDUCE THE FINANCIAL OBLIGATIONS OF THE REGULATED ENTITY.

Link: https://www.congress.gov/110/plaws/publ289/PLAW-110publ289.pdf

In essence allows the trustees of Fannie and Freddie to go to the market at any time to raise new capital, including new capital with lower dividend coupons, to buy back the Treasury’s senior preferred. Any loyal conservator of Fannie and Freddie would take advantage of this refinancing option to end the bailout arrangement, by paying off the senior preferred in full.