Fannie Mae-No Politics (FNMA)

[Wise Man]

No where is written that SPS are non-repayable securities.
It must be expressly written in the certificate of designations. The same for the case of conversion to commons, specifying the conversion ratio, which doesn't exist either. The same occurs with the JPS.
The SPSPA only states that the dividend can't be used to repay the SPS, which is obvious. The thing is that no actual dividend existed. No dividend was ever disbursed, because it's forbidden when FnF are undercapitalized in the FHEFSSA Restriction on Capital Distributions. None dividend, zero, nada, nichts. Auchtung!
The SPS have a cumulative dividend, which means that at some point, it'll be suspended and it's accumulated.
Mandatory dividend doesn't exist in this world, which transforms a dividend into interest payments, as the Wall St law firm representing the FHFA has stated in court.
A dividend is a distribution of earnings to the Equity holders after calculating the Net Income with the income and expenses from operations (like interests). Therefore, a dividend appears on the tables Change in Equity or Net Worth Activity in their earnings reports, because earnings are otherwise retained on the Balance Sheets (A Retained Earnings account is Equity and Core Capital). This is why a dividend is considered a distribution of capital (FHEFSSA definition of capital distribution: any dividend). So, it couldn't have been possible paid, out a Retained Earnings account with deficit all along. So, two reasons why they weren't actual dividends.
In fact, the reduction of the SPS is the only exception to this Restriction on Capital Distributions (image below)
Therefore, if the law states that no dividend was ever paid, the capital distributions to UST that have gone through, have been applied towards the reduction of the SPS, as per the exception in the law (Later on, for their Recapitalization in a separate account was added in the CFR 1237.12), under the guise of dividends. This way, the FHFA-UST's actions are legalized, avoiding do-overs.

The fact that the Incidental Power of the conservator allows it to "take any action authorized by this section, in the best interests of the FHFA", this plan of deception with a Separate Account is the first thing that anyone should have come up with, taking into account that we are dealing with the same officials that carried out a similar plan in the 1989 bailout of the FHLBanks by Congress, under a statutory section entitled "Separate Account", for the repayment of the principal of the obligation RefCORP with the taxpayer, with an allowance that was first applied for the payment of interests (there was also a UST backup worth $300 mll, to make sure that they pay the interests on this obligation. Section: "Treasury backup"). By they way, they could skip the allowance if they reported losses in a quarter. But with FnF, these officials were more interested in swelling the SPS and the capital distributions were the reason of the losses, draws from Treasury and more SPS increased for free, increasing the dividend amount the next quarters and an increased public outcry at the time (it occurred in 11 quarters in early conservatorship. Explained here) and, for instance, representative Hensarling calling the SPS "taxpayer's losses" as part of the plan to spook the retail investor as well. He was then hired by UBS.
Currently, the entire allowance disbursed by FnF is applied only for repayment of the obligations SPS (all the preferred stocks are obligations in respect to Capital Stock, that is, fixed-income securities), as the SPS pay dividends, not interests, and they are forbidden.
The same occurs with the current SPS increased for free. Another capital distribution restricted that reduces the core capital and thus, also barred in the FHFA-C's Rehab power like the dividends mentioned before. This is concealed with Financial Statement fraud in FnF (These gifted SPS are missing on the balance sheets in order to evade posting the corresponding offset with reduction of the Retained Earnings account). It's considered a joke "in the FHFA's best interests". In truth, the Common Equity is held in escrow (if there was no Financial Statement fraud) like with the dividends and, at some point, it'd be unwound.

Finally, actually, the SPS are redeemable securities. Because there are 2 UST backups of FnF in the Charter Act with the same name: "Authority of UST to purchase obligations", with the surprising addition by HERA of one that can fetch an infinite rate and in an infinite amount (Subsection (g))
As the UST backup since the Charter's inception is the one that prevails (Charter dynamics), we use the second UST backup to accomodate a resolution of Fanniegate that complies with the original.
The one inserted by HERA was used in the SPSPA for a Separate Account plan (10% and NWS dividends are, thus, legal, although later they weren't actual dividends but capital distributions) and it was also useful for the approval in the SPSPA of a $200B funding commitment that de facto updated the obsolet limit of $2.25B in the original bailout, established more than 50 years ago when Fannie Mae had only $15B in debt outstanding (an update that should have been done by Congress in the first place, instead of enacting HERA)
We also look at the original UST backup to learn that the SPS are redeemable securities, because this subsection (c) states that the UST is authorized to purchase any obligation of the subsection (b), and this subsection (b) specifies that they must be: redeemable obligations.
The Separate Account plan legalizes every action and upholds the original dynamics. For instance, the PROHIBITION of United States to make profits off the securities and assets of FnF, except the rate on redeemable obligations established in the subsection (c). The infinite rate inserted by HERA in the subsection (g), doesn't appear as exception to this prohibition for a reason: it was never meant to be the ultimate rate.

The plotters cling to HERA and the SPSPA to avoid these conundrums when you watch the legislation with all the amendments included, as seen today if you download the FHEFSSA and the Charter Act.
Heavy penalties for those peddling the Govt theft story in formal documents, including Howard who showed up in the SCOTUS as amicus curiae to repeat a dozen times that the SPS are non-repayable securities and now he sends this guy Kthomp19 to repeat the same lie. Kthomp19 also calls the existing shareholder "legacy commons". Another attorney with an evident lack of knowledge in finance that covers up the Restriction on Capital Distributions and its exception, Rehab power, etc.