Fannie Mae-No Politics (FNMA)

[FOFreddie]

Yes - like any other Amendment like the NWS for example - does not mean it would be Constitutional and lead to more litigation. If the SPS is converted it is an overt act removing the explicit restriction against conversion and therefore could reasonably be considered a Takings by the UST/FHFA. If it is a Takings - there needs to be compensation so then the question is what are the damages? If the common prices rally because it is not as bad as expected, then it probably is hard to prove damages. It is my understanding that the reason the judgement in the Lamberth case was only $ 600 million was because it mostly was based on the decline in stock prices. In this case if there is a conversion and the upside of common is reduced from $ 100 to $ 40 - and the stocks rally $5/10/15 dollars after an announcement - it would seem that there are no damages even though the upside has been capped at $ 40 rather than $ 100 because the market reaction to the overt act by the USG was an increase in the value of the shares owned by shareholders.