Replies to post #562792 on Fannie Mae-No Politics (FNMA)

[TRCPA]

Well, I reread the ACG twitter review, and it could be interpreted both ways.

Agreement to end the C-Ship is the most important thing. A couple of billion dollars now, in this case, is less important in grand scheme of things.

[obiterdictum]

I agree. I don’t know where this partial payment talk is coming from

"Partial payment talk" comes from the following:

1. The Fifth Circuit en banc majority did not invalidate the net worth sweep. There is no legal reason or authority that says the net worth sweep must stop now. FHFA and Treasury can do as they like until the net worth sweep is legally invalidated and vacated. FHFA and Treasury can end the sweep, do a partial sweep, or sweep the entire 2nd quarter net worth. Time will tell.

2. The Treasury Housing Reform plan clearly states that an administrative step to take in recapitalizing the GSEs and ending the conservatorship is to increase the capital reserve buffer beyond the current $3 billion while paying Treasury an unknown amount of monetary compensation.

Pending that recapitalization plan, and as an interim step toward the eventual PSPA amendment contemplated by this plan, Treasury and FHFA should consider permitting each GSE to retain earnings in excess of the $3 billion capital reserve currently permitted, with appropriate compensation to Treasury for any deferred or forgone dividends. See: pp. 28 and A-3 - https://home.treasury.gov/system/files/136/Treasury-Housing-Finance-Reform-Plan.pdf

3. Calabria echoed Treasury's housing reform statement in a CNBC interview. See: 0:00 to 0:40 sec.

00:03
Diana Olick: Do you agree with him
00:05
on the timeline for ending that Treasury
00:07
sweep. Will you get done by the end of
00:09
the month.

Mark Calabria: So, let me add a little more color
00:10
than what the secretary said. So by the
00:12
end of the month we're hoping to
00:13
increase the current number in the
00:16
letter agreement. You may remember in
00:17
December 2017 Fannie and Freddie were
00:19
allowed to retain three billion in
00:21
capital each so what we want to do by
00:23
the end of the month is raise that
00:24
number significantly and then after that
00:26
we want to agree to make a change to the
00:29
underlying share agreement that would
00:30
hold a whole other host of issues and
00:32
that would set us on the path to ending
00:33
conservatorship which again I said we've
00:36
talked about the past process-driven not
00:37
calendar driven. Have a number of things
00:39
we need to put in place to get there.

[navycmdr]

listen to EVERY WORD he says ... retain earnings for several months

so NO DILUTION NO IPO until they reach some Earnings Milestone to be

established in the LOA - HE DOESN'T SAY STOP the SWEEP -

" What We Want to Do by the END of the MONTH is RAISE

THAT NUMBER SIGNIFICANTLY and then AFTER THAT we want

to AGREE to make a CHANGE to the UNDERLYING SHARE agreement

that would hold a whole other host of issues and that would set us

on the PATH to ending the Conservatorship ... blah blah blah

Process driven NOT Calendar driven

SEPT 12th CNBC VIDEO: