Fannie Mae-No Politics (FNMA)

[Wise Man]

The SPS can't be cancelled. They were repaid.
Our negotiator is opposed to a resolution today by two guys seated at a table, because the current Balance Sheets have nothing to do with the reality, instead of as a result of an ongoing Conservatorship that began in 2008 and in accordance with the law, that is, unwinding the Separate Account plan.
The key, in compliance with the FHFA-C's Rehab power: Put FnF in a sound and solvent condition. A statutory provision covered up in court by the plaintiffs, along with all others mentioned next.
You are negotiating with the government here, because the SPS can't be cancelled without a statutory provision backing it up and the Warrant can't be exercised. You are paid by the hedge funds, Glen Bradford, disregarding the laws and regulations, besides basic financial concepts:

I would be very happy if it was due to a release where the SPS were cancelled and only the warrants were exercised.

$191 billion worth of SPS were repaid through the exception to the Restriction on Capital Distribution in the FHEFSSA (U.S. Code §4614(e)). Freddie Mac through the end of 2013 (see my signature image below) and Fannie Mae one year later.




Assessments in the form of capital distribution, not an actual dividend (restricted and unavailable earnings for distribution as dividend, out of an Accumulated Deficit Retained Earnings accounts)
Dividends aren't interest payments.
FnF had two UST backups in the Charter Act. The original at rates similar to Treasury that is what will prevail in the cumulative dividend SPS (1.8% dividend rate with a 0.5% spread over Treasuries vs 0.299% spread by the FHLBanks -GAO report- in their 1989 bailout by the Congress explained below)
The second UST backup, temporary purchase at infinite rates and in an infinite amount, was inserted by HERA instead of simply updating the obsolete $2.25 billion limit in the original backup, with the clear purpose to replicate the SEPARATE ACCOUNT wording in the FHLBanks' 1989 bailout by the Congress.

The remainder, $121.1 billion SPS, are the SPS increased for free and for no reason. A breach of the conservator's Rehab power, as they carry an offset that reduces the Core Capital. It's considered a joke thanks to the FHFA-C's Incidental Power, as another way to hold the Common Equity in escrow.

For the rest of cash payment to UST, the $110 billion SPS overpayment ($301 billion in total), DeMarco had already prepared the July 20, 2011, Final Rule "for the transparency of the conservatorships", where he surprisingly snuck the CFR 1237.12 for this case when the SPS had already been fully repaid, as it allowed to continue the capital distributions to UST, now applied towards their Recapitalization (exceptions 1, 2, 3 and 4). Deplete capital in FnF with the objective to recapitalize them outside their Balance Sheets. This is absolute shenanigans and a Separate Account wording right there. So, here again, they were assessments in the form of capital distribution, under the guise of dividends.
Notice that this Final Rule had an effective date 15 days before the famous FHFA press release that, not only unveiled a proper Recapitalization plan for the FHLBanks (inside their Balance Sheets), but also it informed that

the FHLBanks have fulfilled their obligation to pay interests

, when, their assessments into a Separate Account were meant to pay interests and the excess was reinvested in zero coupon Treasury notes for the repayment of the RefCorp obligation at maturity. So, the FHLBanks still have to pay the $30 billion principal of the RefCorp obligation issued by Funding Corp, likely purchased by UST (repayment of principal is clearly stated in the 1989 statutory provision entitled SEPARATE ACCOUNT, because they were the shareholders (Equity). Funds reinvested in RTC for Public-Private Partnerships with Wall Street. And the UST also likely lost $18.8 billion invested directly in RTC.

The same officials back then with RefCorp, Sandra Thompson and DeMarco and the same institutions, FHFA and UST, are now in Fanniegate in an attempt to make up for the losses.
Everything will be adjusted.