Fannie Mae-No Politics (FNMA)

[DaJester]

"The SCOTUS has already blessed the legality of the variable dividend rate of the SPS"

The SCOTUS did no such thing. They just said FHFA did not exceed it's power. The Lamberth trial said that the NWS was a breach of the shareholder agreement. Does that mean that the Lamberth verdict is in conflict with the SCOTUS decision? Of course not, because it is not as "blessed" as you think.

As for dividends not paying down equity. Yes, of course that's 100% accurate. We all know what HAS happened. The question is what WILL happen... It would take Treasury to reclassify the dividends it received into something else. Whether that's a separate account so that it doesn't violate the restriction on capital distributions, or whether it gets adjusted to 10% instead of Net Worth to prevent Shareholder agreement breaches, or if it gets reclassified as Return of Capital instead of a Dividend, or who knows what other dispositions Treasury may decide. It would only take the Govt agreeing with itself to make the accounting work. Or it can be an SPS cramdown, and/or Warrants exercised, and/or Congress making a new Charter, and/or the GSEs combining into a new company, and/or full receivership where everyone gets squat. There are lots of possibilities.