Fannie Mae (FNMA)

[kthomp19]

I honestly think the treasury has to align themselves with shareholders to get these recapped and released.

If you mean junior preferred shareholders, I agree. In late 2020 Treasury was ready to move forward with a senior-to-common conversion that would have happened alongside a junior-to-common conversion. That's alignment right there.

If you mean common shareholders, I disagree. They have no power and no voice whatsoever; there is no reason for FHFA or Treasury to negotiate with them or listen to them at all.

GSEs on their own would have far better success in lawsuits than shareholders filing derivative claims.

Section 5.3(b) of the January 2021 letter agreement says that FnF can't be released from conservatorship until after the Litigation End Date, defined as the point when all lawsuits outstanding against FnF, FHFA, and Treasury with a combined liability of more than $5B are basically dead.

I can't imagine either FHFA or Treasury being okay with the prospect of being sued by anyone post-release, either shareholders or FnF's boards.

As such, I fully expect any release from conservatorship to be paired with full indemnification of FHFA and Treasury for all their actions up to and including release.