Replies to post #727401 on Fannie Mae (FNMA)

[JOoa0ky]

Do you have an estimated tipping point for when FnF have retained enough capital that it just makes it too hard for the govt to pass up recapitalizing?

Without any political prejudice... just from a numbers perspective.

[Robert from yahoo bd]

2) The Supreme Court said the NWS was perfectly fine, meaning an administration (now or in the future) could choose to just turn the cash sweep back on and not fear legal repercussions.

I appreciate your responses to my posts!

But I'm not sure this is a bulletproof legal conclusion that we can reach from the Collins opinion. Why?

1). No lawsuit has been filed yet as to whether or not HERA is Unconstitutional under the Void for Vagueness Legal Doctrine as FHFA'S STATUTORY POWER IN HERA "TO DO WHATEVER THEY BELIEVE IS IN ITS OR THE PUBLIC INTERESTS IT SERVES" is a virtually unlimited grant of power to any federal agency by the US Congress.

2). No lawsuit has been filed yet as to whether or not the 3rd Amendment was invalid as it runs afoul of the Major Question Doctrine as articulated by the Supremes last month in West Virginia v EPA. Here, we have UNELECTED FEDERAL AGENCY OFFICIALS deciding on the future direction of the Secondary Mortgage Market Structure in the US and that it would no longer include a private capital in a 1st Loss Position as the UST under the 3rd Amendment swept ALL of the private capital to itself and making sure, "the gses would NEVER be pretend private again."

3). Still undecided is what if anything the Supremes will do about the 3 Judge CAFC Writ of Certerorri.

Neither you nor anyone else has articulated a reason as to why launching lawsuits on 1. and 2. above after the 2 to 5 years the current Litigation has exhausted all possible appeals, will fail to succeed.

[Robert from yahoo bd]

From the Syllabus in Collins:"(a) The Recovery Act grants the FHFA expansive authority in its
role as a conservator and permits the Agency to act in what it deter-
mines is “in the best interests of the regulated entity or the Agency.”
§4617(b)(2)(J)(ii) (emphasis added). So when the FHFA acts as a con-
servator, it may aim to rehabilitate the regulated entity in a way that,
while not in the best interests of the regulated entity, is beneficial to
the Agency and, by extension, the public it serves. This feature of an
FHFA conservatorship is fatal to the shareholders’ statutory claim.
The third amendment was adopted at a time when the companies had
repeatedly been unable to make their fixed quarterly dividend pay-
ments without drawing on Treasury’s capital commitment. If things
had proceeded as they had in the past, there was a possibility that the
companies would have consumed some or all of the remaining capital
commitment in order to pay their dividend obligations. The third
amendment’s variable dividend formula eliminated that risk, and in
turn ensured that all of Treasury’s capital was available to backstop
the companies’ operations during difficult quarters. Although the
third amendment required the companies to relinquish nearly all of
their net worth, the FHFA could have reasonably concluded that this
course of action was in the best interests of members of the public who
rely on a stable secondary mortgage market. Pp. 13–15."