Fannie Mae-No Politics (FNMA)

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Somebody please tell me I'm wrong...

Looking at Fannie's 2012 annual report, it seems as if the previous payments to the Treasury in the form of dividends are not counted as repayment on their Treasury draw, please see below:

"Fannie Mae has operated under the conservatorship of the Federal Housing Finance Agency (“FHFA”) since September 6, 2008. The funding the company has received under the senior preferred stock purchase agreement with the U.S. Treasury has provided the company with the capital and liquidity needed to maintain its ability to fulfill its mission of providing liquidity and support to the nation’s housing finance markets and to avoid a trigger of mandatory receivership under the Federal Housing Finance Regulatory Reform Act of 2008. Through March 31, 2013, Fannie Mae has requested cumulative draws totaling $116.1 billion. Under the senior preferred stock purchase agreement, the payment of dividends cannot be used to offset prior Treasury draws. Accordingly, while Fannie Mae has paid $35.6 billion in dividends to Treasury, Treasury still maintains a liquidation preference of $117.1 billion on the company’s senior preferred stock. "

http://www.fanniemae.com/resources/file/ir/pdf/quarterly-annual-results/2012/q42012_release.pdf_page2

So, my question is, are all profits (aside from the yearly $3B in capital) swept to the Treasury as dividend payments? This seems duly unjust, as how in the hell would Fannie ever pay back their debt to the Treasury? It's almost as if the rules of repayment were made in expectation of failure... I understand that the government needs to make some money off of the bailout, but this is ridiculous.

Another question, what happens to the money captured from DTA and big bank lawsuits? Would these also be swept to the Treasury in the form of dividends? Somebody please tell me I'm misinterpreting the facts.

This could very well explain why Fannie decided to defer the DTA. Perhaps they are hoping for a structured deal with Congress for their release from conservatorship or at least a solvent repayment plan. Makes a lot more sense to have those LARGE paydays count towards repayment as opposed to governmental cash-cow dividends.

I'm a long on FNMA with a decent amount of shares. I'm rooting for big success as we all are, just trying to understand the reality of the situation better...