Replies to post #510492 on Fannie Mae-No Politics (FNMA)

[amelia43]

Exactly how I feel. Not just court cases but with any reform or admin action. What is different this time?

[RickNagra]

Great question which equally deserves a great answer.

We lost the initial 5th circuit court case 2-1. The one judge that stood behind us was Judge Ron D. Willett. He ripped the government apart regarding the conservatorship and the net worth sweep in his dissent. But we still lost. However Willett did not give up. He obviously talked about this case with the other judges on the 5th circuit. He convinced them to rehear the case en banc. This is a French term meaning in bench. It is extremely rare to be granted an en banc trial. Lower court verdicts are overturned 90% of the time during en banc. Right there alone we have a 90% chance of winning. Just the fact we were granted en banc was nothing short of a miracle. Keep in mind that the en banc hearing was entirely about the conservators duty to preserve and conserve which the net worth sweep does not. Listen to the en banc audio hearing which is available above with the yellow sticky. Most if not all would agree the FHFA attorneys and DOJ from the Treasury did a horrible job. The en banc judges ripped them apart. The judges were well prepared and went for the jugular. Judge Edith Jones said in all her years since the 80's she had never seen a conservatorship run like this. The role of the conservator is to place the company in a sound and solvent condition. The net worth sweep violates this. In fact one of the DOJ attorneys compared the net worth sweep to an interest only loan AKA predatory loan. Boy is he wishing he did not say that. It is hard to believe the defendants could win this case. The probability of us winning this case is 90% if not more. It just did not go well for the government.

The government jolly well knows it did not go well for them. This is precisely why they are fast tracking the Calabria nomination process. Once confirmed Calabria will swiftly stop the net worth sweep before the en banc delivers their scathing verdict. Watt confirmation took 7 months. Calabria confirmation 2 months maximum.

Others are welcome to add here. This is my understanding. I may have missed a few points here and there but overall I think I covered the nut and bolts.

Rick, like you, I've been here and invested here a very long time - too long. You also know then that we have lost EVERY SINGLE court case. There have been MANY where I believe we had the legal high ground and should have won. Clearly the deck has been stacked against us.

Why will the En Banc be different? Why do we win this one?

Don't get me wrong. I absolutely think we should win this one, as we should have won others. Why is this one different?