Fannie Mae-No Politics (FNMA)

[Wise Man]

Fairholme asked about the existence of the Separate Account plan.
In a question addressed to the Treasury Department, seeking documents that gave response to the question RFP 12:

Whether Treasury dividends were to advance taxpayers interests and/or prioritize Treasury's financial interest.

In other words, whether the dividend payments were in reality assessments sent to UST applied towards the reduction of the SPS, and/or just dividends as we were told.


Obviously, Fairholme's Berkowitz knew that the reduction of SPS is an exception to the Restriction on Capital Distributions (U.S. Code 4614(e)) that he has covered up in court, like all other plaintiffs. This is why he asked about it, in order to legalize the capital distribution (dividend) that went through, despite the restriction, thanks to the FHFA-C's Incidental Power "any action authorized by this section,..."

But in August 2021, his attorney, the controversial David Thompson, withdrew this motion.


The Capital Rule had an effective date February 2021 and, although in the same Capital Rule it's stated that it must be kept secret till January 2022, the companies gave us a broad number of capital requirement with their first quarter 2021 earnings reports.

Not only Fairholme's Berkowitz realized that, even under the Separate Account plan, Fannie Mae won't resume the dividend payments until the end of 2022, and it's when the JPS's fair value fetches its par value (JPS's fair value chart), but also, presumably, he was told by the FHFA that we are going to overtime in the conservatorship, seeking "Membership cleansing", and it would take at least one year more for the public announcement of a Separate Account all along.
Taking into account that the JPS, without a dividend, trade at a discount to par value (estimated at 6% discount rate: a fixed-income security without a "coupon" payment), this was devastating for him.
Then, they agreed to keep the Separate Account plan secret until the end, and, in exchange, not only the FHFA will help the JPS holders to try to get back dividends colluding in the Lamberth court with the fiction of "implied contract" claim (the damage of a one-day share price drop, plus interests), but also they will go full con mode and try the "Equity restructuring" slogan, because it'd be easy to draw the DOJ into their cause, avoiding a backlash with the Separate Account plan.

Judge Lamberth is here to help, and he has already stated that the plaintiffs were certain to receive dividends while FnF remain undercapitalized, disregarding the Restriction on Capital Distribution.

No genuine dispute remains on the fact of harm on the theory of plaintiffs were denied dividends that they otherwise were reasonably certain to receive.