Fannie Mae-No Politics (FNMA)

[FOFreddie]

Great Points Rodney - If the Lamberth Decision is upheld it seems likely that the breech of the implied covenant of good faith could be used to challenge the conversion of the SPS if that happens. Right now, the SPS is not convertible so an amendment to the terms of the SPS could be seen as an overt act which could be deemed an unconstitutional taking without reasonable compensation and a breach of the implied covenant of good faith. Now we are considering 10s of billions of dollars - this is why I think the Lamberth litigation would be a perfect mechanism to settle with FMCC common and the JPS for past and prospective potential claims.

Of course, this is low probability outcomes and expensive but there will be a lot of money at stake