Fannie Mae-No Politics (FNMA)

[Wise Man]

The Supreme Court started out with "Rehabilitate FnF" in the interpretation of the FHFA-C's Incidental Power and it's the part where the prior ruling by judge Willett (5th Cir.) over the same case, asserted that, what is set forth in the law: "any action authorized by this section", are actions "within the enumerated powers",


Don't go far away because it's precisely the FHFA-C's Power that we call "Rehab": "Put (restore) FnF in a sound condition" ("...and solvent condition", related to the ability to pay down debentures, that can be used for the reduction of SPS, a debenture with the taxpayer)
When we are talking about the financial condition of a financial company and, specifically, FnF, soundness is measured in their Balance Sheets at a determined date (picture of a company) with the FHEFSSA capital requirements, numbers outlined later in the ERCF tables (February 16, 2021. Image below. The statutory Minimum Capital Level and capital shortfall, have been posted every quarter in their Earnings reports since day one, with the old 0.45% of MBS Trusts. Now, 2.5%. Regulatory Risk). It's not "sound operations" or "safe operations" because that's the FHFA-R's duty:

to ensure that each regulated entity operates in a safe and sound manner,

which relates to their operations (creditworthy borrowers, LTV) as Calabria, Sandra Thompson and many lawmakers repeat, but conveniently omitting the end of the same sentence:

including maintenance of adequate capital.

Does the statutory Adequately Capitalized threshold ring a bell?

Both judge Willett and Justice Alito were synchronized because both coincided with "Rehabilitation" and the latter followed up with the authorization of a Separate Account that, "although not in the best interests of FnF" he claimed, on paper, as we can see in their horrible ERCF tables (adjusted $-194B Core Capital. A whooping $402B capital shortfall over Minimum Leverage capital requirement), "it's beneficial to FHFA", when the law states "in the best interests", which refers to misleading to the public about the true plan of financial rehabilitation of FnF. It doesn't matter if Justice Alito laid it out unconsciously and what he really meant is that the FHFA can steal from the private corporations it oversees. Obviously, a financial analysis isn't his forte. With his "rehabilitate FnF" is enough for us.
What lies behind is that he transmitted the wrong idea of monetary benefit in a Federal Agency, to play the hedge funds' game of stock price manipulation with their Govt theft story. The interests in a Federal Agency, are always those related to the activities of the enterprises it regulates, that, along with the preface "may" in its Power, it allows the FHFA to carry out activities like building the CSP, the preps for a Housing Finance System revamp, launch new products like the UMBS and commingled securities, etc.
Freddie Mac gave an explanation about what can be considered an explanation of this Incidental Power and the word "may" in the Power (more risks or incur in losses if necessary,...)

"May" doesn't mean that it's excused from complying (Legal dictionary). That is, once the capital is generated ($420B during conservatorship), it's kept by FnF or, "in the best interests of FHFA", held in escrow and returned at some point for the rehabilitation of FnF. There is no such thing as a switch ON/OFF button where the FHFA decides when the profit is kept by FnF and when it's syphoned off to Treasury, as they made us believe changing their minimum Net Worth that they were allowed to keep (Applicable Capital Reserve): now $3B. Now, it's reduced $600mll every year. Now, back to $3B. Then, up to $17B/$25B. Now, up to the capital requirements (Hence the January 14, 2021 "Capital Reserve End Date", that is, the capital requirements now are met with the Net Worth, not with the statutory capital metics Core Capital, Total Capital, CET1 and T1. A $118B Net Worth that has been built with gifted SPS handed out to the UST, and thus, it isn't even "Capital Reserve" like the Federal Reserve System's "Capital Surplus" -Amount of Net Worth above the Capital Stocks-. An invalid capital metric in FnF to all effects).

Let alone that capital distributions are restricted (dividends, gifted SPS and the Lamberth rebate), when the exceptions kicked off to legalize those payments that went through (This is the Separate Account for the rehabilitation of FnF that Justice Alito authorized, in the best interests of the FHFA), and unavailable Earnings for distribution as dividend, out of an Accumulated Deficit Retained Earnings accounts. Thus, no actual dividend was ever paid. Assessments sent to Treasury in the form of capital distributions, under the guise of dividend payments, similar to the 1989 SEPARATE ACCOUNT provision in the bailout of the FHLBanks for the repayment of the principal of the obligations with the taxpayer (RefCorp) Source. Starring the same individuals: Sandra Thompson at the FDIC and DeMarco at GAO (in charge of the accounting) and later at the UST. The difference is that, with FnF, the Separate Account has continued for the recapitalization, thanks to the 12 CFR 1237.12 on July 20, 2011 that added up "it supplements and shall not replace" another exception to the Restriction on Capital Distributions "for Recap": Deplete capital is authorized to build capital ("to meet the capital requirements"), a Separate Account wording right there. So, don't tell me that there was no intention when this Final Rule was enacted, precisely, on the date of Time Limitation for the FHFA Acting Director DeMarco.

Finally, Justice Alto added "...and the public it serves" out of the blue. Something not written anywhere and you can't claim that a Federal Agency has a fiduciary duty with the taxpayer, to allow the sacking of the private corporations it oversees. This add-on was tailored for the extortion of FnF, not only with a corporate policy of systematically sell off loans and REO inventory to Goldman Sachs & Co at a deep discount, with the excuse of a debt forgiveness string attached, but also government policies with the sale of minority- and women-owned businesses, Neighborhood Associations, LGTB associations, etc. And also, it would allow the government to keep the estimated $15 billion that the UST owes to FnF for the Making Home Affordable program under TARP that saddled FnF with losses (Source), forcing them to even advance payments to the banks with the promise of being reimbursed for this cost later on, something that didn't happen according to a complaint by the FHFA-IG (Source).

The lack of financial rehabilitation it's not just the ERCF tables. Just look at their Retained Earnings accounts on the balance sheets. Adjusted $-216B Accumulated Deficit Retained Earnings accounts. An account meant to absorb future losses when they are reported on the Income Statements and where the dividends are distributed from. You can't say "rehabilitation" when this account hasn't even been turned around. Let alone later, when it's $0 again, start to build much more for the capital requirements (Core Capital). Capital Stock doesn't absorb losses. It just offsets a negative RE so that the Net Worth remains with positive balance (watch the effect of the SPS in early conservatorship below for a $0 Net Worth. FnF tapped UST for funds -issuance of SPS in the same amount to reflect the debenture with the taxpayers- only upon "Capital Deficiency".)
So, no matter how many stock offerings are, the Retained Earnings will always stand at an adjusted $-216B (adjusted for the offset with the SPS LP increased for free). So much for rehabilitation.
ERCF posted on the Earnings reports (SEC filings)


Are you sure you are not Glen Bradford?