Replies to post #745715 on Fannie Mae-No Politics (FNMA)

[kthomp19]

Please inform all of us where the case is located for the bankruptcy of the GSE's???

It's called conservatorship. I'm sure you have heard of it.

The judge in charge?

The FHFA Director. Currently that's Sandra Thompson.

The lawyers involved and also the creditors standing inline for their piece of the pie?

This is an administrative bankruptcy, not one in a bankruptcy court, so there are no lawyers.

The creditors are FnF's bondholders, Treasury, junior preferred shareholders, and common shareholders. FnF have enough positive net worth that all bondholders are money good and won't be part of the restructuring.

Management continues to run the day-to-day business operations but all significant business decisions must be approved by a bankruptcy court.

That sounds exactly like conservatorship, with the FHFA Director acting as the bankruptcy judge. Just as Calabria said. HERA gives FHFA as conservator exactly the powers described in your quote (and a whole lot more besides).

Last I looked, FHFA did not stand for court and is in charge, we have zero say.

That last part in both is especially important and should be understood by anyone claiming to have legal knowledge, unless you're a charlatan. Both refer to COURTS having last say.

Once again, you don't seem to have actually read Calabria's quote. I'll repeat it with emphasis:

A conservatorship is essentially an administrative bankruptcy.

So just like a company, like look at Hertz, that's going through a number of problems today, not surprisingly because of a weakness in tourism. You know, Hertz is in a bankruptcy. There is a government-appointed official, a judge, who is overseeing that process. Essentially what I am doing is playing the role of a bankruptcy judge in rehabilitating Fannie and Freddie. They maintain as private companies. My job is how do you prepare and restructure them so that they can leave this process and get back on their feet again.

Conservatorship not being an actual Chapter 11 in a court does not at all mean that it can't be handled as one. That's what Calabria was saying. You're getting wrapped up in semantics.

Bottom line: conservatorship functions just like a bankruptcy. That includes the restructuring needed to exit.

Huge differences between this conservatorship and bankruptcy, Calabria knew this, but was good at muddying the waters for the lemmings.

Calabria said "conservatorship is essentially an administrative bankruptcy." That means there are huge similarities, not differences.

Mnuchin said they'd get us out....what happened? Watt said numerous things that never transpired also.

You're confusing predictions and projections and opinions with facts. Calabria's words are facts, supported by HERA and the very bankruptcy code that you yourself quoted.

FnF have been in de facto bankruptcy for over 14 years. It's not the entry we need to be worried about, it's the exit.