Replies to post #771638 on Fannie Mae-No Politics (FNMA)

[imbellish]

Pag's call to me was totally disgusting. As you well know there's no "creativity" with accounting properly.

[Wise Man]

This is Mel Watt calling the CRTs "innovation".

Notice that Watt is also co-sponsor of the 2012 TCCA along with Pelosi and Waters, that funnels to UST 10 bps guarantee fee in the form of TCCA fees.
So, it seems that he just came up with another scheme to siphon more funds off to UST and override the Charter's Fee Limitation of United States posted before.
But, unlike the TCCA fees pursuant to the TCCA, these CRT expenses are illegal. It's not one of the 3 credit enhancement operations authorized in the Charter Act.

This is why we are requesting a cash refund worth $17.3 billion, the amount of CRT expenses, net (turned into Retained Earnings. They now pay taxes as they were deductible expenses), and a posting on the Retained Earnings account (Core Capital) to protect FnF against unexpected losses (Capital ratio -Basel framework-)

Notice that the PLMBS were also barred in this Credit Enhancement clause (lack thereof). This is why with the CRT expenses, we have drawn the line regardless whether the recipient is the UST or Wall Street.

[LuLeVan]

Even Tim Howard would be 100% content if the government only exercises the warrants (and writes off the SPS).

Unfortunately it is much more likely that the government will convert the SPS into commons (and probably skip the exercise of the warrants). This is the worst-case scenario for common shareholders. That's why Howard wants only the warrants exercised (as does Bill Ackman, by the way). In that case, the price of commons would go up to about $7 and they would "get off lightly."

He [Pagliara] says "Let's be creative" when talking about the monetization of the Warrants ... what is a simple scam to syphon capital off to, presumably, the UST

[jeddiemack]

Pags ... unfortunately... he's a turncoat.

Wish him well, but he's not on my team or any team for Fannie and Freddie. He's literally willing to give away 400Billion dollars and accept pennies in return.

No thank you... I'll pass.

[bradford86]

Yes. Exercise the warrants because they are valid and belong to the govt and even ackman expects them to be.