Replies to post #543665 on Fannie Mae-No Politics (FNMA)

[YanksGhost]

That "spin" on succession rights bestowed on FHFA by HERA is totally wrong. The Agency as conservator steps in the shoes of shareholders and the board of directors to fulfill its duties as conservator. The agency acted to include warrants in the SPSPA agreement in largely similar form as was imposed in both AIG and Ally bailouts. In the case of Fannie Mae and Freddie Mac, the SPSPA fulfilled the "safety and soundness" objective by providing an additional $200 B Treasury draw provision beyond the $187.5 B in initial bailout funds. No one could argue that the Treasury Draw extended in conservatorship did not help conserve and preserve the enterprises, benefit the Agency (FHFA) in fulfilling its stated mission under HERA or help protect taxpayers from the risk of another massive bailout risk.

The only way ANY of your assertion would be valid would be if HERA were fully overturned as law, an outcome that has never been sought by anyone in any court or before any governance body such as the S.E.C..

Please reread HERA and review the massive amount of concluded FnF case rulings for confirmation. The actions of FHFA under the law's succession rights empowerment clearly give the Agency the authority to do what it did.

And the "severability" excuse often offered for ending the SPSPA is only a contractual feature available to UST to invoke, and only at its election. The Treasury will only EVER invoke this in case of some enormous jury award in some pending litigation... perhaps the most unlikely outcome of many alternative remedies.