The only 2 options are: Charter revoked & Takings.
"Instant" recapitalization. "Spontaneous" recapitalization. "Out of the blue" recapitalization. "As if by magic" recapitalization, are an attempt to discredit the ongoing recapitalization under the Separate Account plan. Now, 3rd phase: SPS increased for free, a joke "in the best interests of the Agency".
Both options start off with a $125.4 billion cash refund and a $183 billion posting as Retained Earnings after retiring the Treasury Stock (the common equity assessed), instead of today's $-122 billion Retained Earnings and $11 billion Treasury Stock, on their balance sheets.
1- Charter, revoked, pursuant to the UST's Feb 2011 3-option plan for a Housing Finance System. Three options that have one thing in common: Privatized System (FnF adequately capitalized with bank-like capital requirements: First Loss position private capital), which is what the UST came out with, when it was required by the Wall Street reform Act (Dodd-Frank law) to prescribe "recommendations on ending the Conservatorships".
Under the Separate Account plan, FnF are adequately capitalized as of end of December 2022, with Fannie Mae meeting its threshold maybe one year earlier. Freddie Mac has its capital concealed with a disproportionate Deferred Income ($53 billion in FMCC vs $23 billion in FNMA, as of end of September 2022)
Likely, the option favored by the UST in its 3-option plan, is number 3: Government reinsurance, not only because we have heard about it from the usual suspects (for instance, the ICBA) many times before, but also because:
-The UST released in September 2019 a report about Housing Reform, that only talked about Government reinsurance.
-Freddie Mac unveiled a pilot program in June 2022, directed to "market participants", with Resecuritizations of commingled securities, that is the financial instrument that can accomplish this reinsurance, both private- and government-reinsurance. Our negotiator on the Fanniegate hashtag forced the FHFA a few days ago, to lower the reinsurance fee to 9.375 basis points from 50 bps, evidence that the FHFA has no idea about financial concepts and obscure motives drive its actions.
2- Taking of our stocks at a fair compensation, as required by the courts. It's been chosen the Book Value, that is, the Common Equity. Under the Separate Account plan that legalizes all the actions, the Common Equity was calculated at $183.3 billion. The BVPS is:
FNMA=$92
FMCC=$118
This represents a PER of just 5.6 times with the adjusted annualized 3Q2022 EPS, under the Privatized System (no TCCA fees, no CRTs, no SPS increased for free, no Warrant,...) and including a 3.5% dividend on the JPSs.
A purchase at Book Value, means that the buyer is using our money to buy us out. A purchase for free. But, because there is Net Worth concealed as Deferred Income (recorded as Debt), it can be amortized into earnings and $76 billion turned into a profit for the UST (it doesn't pay corporate tax on these earnings), besides $7 billion Net Income for the 4Q2022, that hasn't been reported yet.
In the case that the UST wanted to sell the companies out on the market, it could raise $360 billion at a PER 11x, if:
-The accounting standard of the upfront g-fee (Deferred Income) is changed for Revenue Recognition Principle, in order to not affect this PE ratio (same revenue stream as before)
-It needs to wait 2.5 years to build a capital reserve and meet capital requirements, to avoid a capital raise and dilution in EPS.
-A Government reinsurance Housing Finance System across the board, increases the PE ratios mentioned. The redemption of the JPS, reduces them.
A combined FnF, MacMae Inc., could be sold out right away at a Market Capitalization (common stock) of $360 billion, knowing the multiple wrongdoings by the FHLBanks, that have left the taxpayer with a deep hole in their 1989 RefCORP bailout by the Congress (section UST backup on the interests due) and that it's required that the FDIC assesses the amount necessary to fund the losses of Funding Corporation (the company that was capitalized with $1 billion of capital stock bought by the FHLBanks) with funds provided by all the thrift lenders.
Yet, the 2.5 years of building capital (dividend suspended), or 3 years if the JPS are redeemed on day one, is still in place. It would be a penalization. With trillions of dollars deposited at the Federal Reserve earning interests, it's easy to think where the funds necessary to buy the UST's stake in MacMae Inc, will come from.
x 3. The "Dilution solution" has never been an option. That's the Government theft story by the corrupt plaintiffs owned by the hedge funds, the company (Bradford, Pagliara, Howard, Rosner, Ackman, Moelis and sponsors, etc) and their accessories on the internet message boards. All cover-ups and lies. A sect.
For the shareholders, the best option is 1- Charter, revoked. They could trade at a PER of 17 times.
For the JPS holders, they should only be interested in a FnF adequately capitalized and the resumption of dividend payments, that is, a Separate Account plan, so that the stock price fetches their par value. Later, the redemption of their stocks or to continue trading on the stock market, is a non-issue, unless they are worried about the stock overhang with so many people wanting to realize gains, which isn't considered as part of a government policy. A Takings is where FnF could redeem all the series of JPSs on day one.
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