"Rek, I was not criticizing, I appreciate that you think the longer timeline is just the way it is "
Don't worry Potty. Sometimes my typing sounds angry, but its not :) I understand not everyone shares my views, and that's ok. (Unless they are typing without any basis of their claim, then that gets annoying. haha)
"I also appreciate the role of HERA. IF Bush admin had gone the BK route, then we as stakeholders would be toast. OFC they could not go that route cos the Chinese, Japanese etc states were holders of the bonds -- and would have been outraged at a BK. "
Completely agree...part of the original contract that created HERA was that there would be no receivership. This was a huge opportunity for all of us here now, and it would have been fully in their right to institute a receivership back in the day. Thank goodness its now too late for that. A receivership now would never fly.
"On incentives of Trump admin: "
I want to address each of these individually, but wanted to first make the disclosure that some of these thoughts are opinion vs. fact.
"(i) Settling lets them end-run congress to get FnF onto a course to being government-free (my idea is you set them off in that direction through settlement such that Congress just has tidying-up legislation to pass...) and this avoids congressional quagmire;"
There are many ways that they can get FnF out of government control that doesn't involve a settlement. There is no way that Congress will favor ending Watt's power given in HERA to continue the Conservatorship until restructure has occurred though. This could potentially take longer than my 2-5 year court scenario. haha. I don't believe this is an incentive to settle. Instead, I think it is a deterrent. If the government wants to end the Conservatorship, they will have to either a.) End HERA. or b.) Restructure the GSEs.
"(ii) Trump gets credit for "fixing" housing in first 6 months/ 100 days; "
This may be an incentive for Trump...but Trump doesn't have the power to settle all lawsuits on his own. Trump isn't even being sued.
"(iii) Trump allies get payday which pays off campaign commitments; "
Again, Trump isn't even being sued. It may be an incentive to him. But it is not an incentive for Watt or Mnuchin. I will also preempt the replacing of Trump with Mnuchin by saying that Mnuchin can create a "pay day" his allies in ways other than a settlement...and some of them would make him and his allies rich while destroying shareholders.
"(iv) Trump gets deep pocketed backers for next campaign; "
I'm sorry, but this just isn't true. Most people who support Trump for the purpose of his effect on the GSEs will drop him the moment the GSEs are released. For those who would support Trump, they'll support him regardless of whether the GSEs are released. I also don't like the insinuation that money should be buying our presidential elections...but that's just my opinion.
"(v) the availability, and cost, of 30 year mortgages is lowered giving a boost to the Trump voter base. "
The 30 year mortgage is at an all time low right now. If anything, releasing the GSEs will increase the cost of the 30 year mortgage. The current interest rate is less than 4% right now. The 30 year mortgage has never been more available. I remind you that the interest rate in the 1980's reached a peak of 18% interest. There was no Conservatorship then and yet the availability of mortgages was much lower than it is now.
"There are more, but I think Trump has quite a few reasons to get this down fast..."
I actually think there are more reasons for Trump NOT to settle than to settle. Here are a few...
(i) If there is a settlement, it will not cover all lawsuits, so the government will still be getting sued.
(ii) If there is a settlement, it won't stop the potential for future lawsuits.
(iii) If there is a settlement, it won't effectuate restructure which is the cornerstone of the Conservatorship. Since only Watt can release the GSEs, and he has indicated he won't do so until restructuring occurs, Conservatorship can't end thru a settlement.
(iv) The general public would not look favorably on increasing taxpayers cost thru a full settlement (which would need to include the return of the overpayments to the Treasury and cancellation of the warrants and senior preferred shares, all of which would GREATLY cost taxpayers money).
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