Fannie Mae-No Politics (FNMA)

[kthomp19]

So once we reach the capital threshold, the GSEs will need to pay the lessor of 10% of the $300B+ SPS liquidation preference (and still growing with every retained dollar), or their entire net worth. Unless the GSEs are clearing over $30B in profit, the sweep continues.

The bolded part is incorrect, as shown by the passage you quoted.

Once FnF reach full capitalization, with full buffers, the quarterly dividend is the lesser of 2.5% of the liquidation preference (10% annual) or the increase in net worth from the prior quarter.

Yes, FnF will have to pay all their earnings to Treasury once full with-buffers capitalization is met since the liquidation preference is so massive, but the dividend won't be their entire net worth as was the case with the original NWS from 2012. Under the current agreement, once FnF hit full capitalization with full buffers, the dividend to Treasury can never take them below that threshold.

When people say "the NWS ended" they are grossly over-simplifying the situation.

I agree. What happened was that the situation changed from "the companies can never build capital and the juniors/commons have no path to economic value" to "the companies can build capital but the juniors/commons still have no path to economic value".

IMO - This will still be a violation of the good faith and fair dealing of the shareholder agreement now that we have the jury victory officially entered, and barring any successful appeal.

That will require a new lawsuit. What makes you so confident that such a lawsuit will be filed? Especially since it has been over 3 years since the January 2021 letter agreement was signed and almost 6 months since the jury handed down their verdict? What on earth are these putative plaintiffs waiting for?

Wait, do you have a crystal ball? Have you been holding out on me this whole time?