Fannie Mae-No Politics (FNMA)

[kthomp19]

Yes, but again, outside of political fallout, there is no law that the SPS can't be written down. The laws being thrown around referred to debt.

The DOJ must have had some law in mind when they advised Treasury on the (il)legality of writing off the seniors during Treasury's negotiations with FHFA in late 2020. Your idea that since Calabria didn't mention a specific law means that law doesn't exist is just plain faulty logic.

How did the $220B get on the balance sheet to begin with?

There are two ways in which the liquidation preference has increased:

1) $1 for every $1 of cash Treasury sent to FnF. This totals $193B from 2008 to 2017, and this amount is on the balance sheet.
2) $1 for every $1 of net worth FnF have retained starting with the September 2019 letter agreement. That's around $100B right now and is off the balance sheet.

So it's ok for the money to appear from an illegal (or at least bad faith) contract, but it can't be removed once it's uncovered?

You need to stop calling the NWS an illegal contract. The jury verdict did NOT say that the NWS is illegal. Your opinion as to its legality carries no weight in any court or agency decisions.

And yes, it can't be "removed" because the SPSPAs do not allow the seniors to be repaid or redeemed without Treasury's permission.

I fail to see how the remedy for ill-gotten money is not the removal of that money.

Because "ill-gotten" is you talking, not the jury. The jury verdict was about how much money Fannie and Freddie owe to shareholders as a result of violating the implied covenant of good faith and fair dealing when they signed the NWS. Treasury, the recipient of the NWS money, was not part of that lawsuit and bears no liability whatsoever as a result of the verdict.