Fannie Mae-No Politics (FNMA)

[DaJester]

Hi Fully Diluted,

The charters establish shareholders, but the ownership can change. In the event of Receivership - you eluded to the creation of the LLREs (Limited-Life Regulated Entities). This is spot-on! Those are the bridge entities which would receive the transfer of GSE assets and liabilities. Per HERA, the Charters get transferred to teh LLREs as the new established GSE owners. The LLREs would then try to sell shares of the new companies to new investors, with the requirement to sell at least 80% of the shares in 5 years, and the remaining shares in 1 year after that.

HERA prevents the FHFA from dissolving the companies or revoking the charters - only Congress can do that. Instead, HERA requires the charters to be sold back into the market upon termination of receivership. This has the net effect of transferring the Charters to the newcos.