Replies to post #790793 on Fannie Mae-No Politics (FNMA)

[MRJ25]

All these rules can be changed with the stroke of a pen. Just as the rules were created.

[Crodawg]

Where does it say that?

[Wise Man]

"Fully capitalized".... "NWS resumes". A bunch of lies.

Fully capitalized.

It's the infamous "Capital Reserve End Date" by Calabria/Mnuchin in the January 14, 2021 SPSPA 6th amendment: when the Capital Reserve meets the capital requirements.
A FHEFSSA invalid capital metric, badly assessed and a fraudulent threshold.JACKPOT!
It's core capital, Total Capital, CET1 or Tier 1 Capital the ones that meet the capital requirements.
Adjusted $402B core capital shortfall over minimum Leverage capital ratio.
With the same adjustment (offset absent from the Balance Sheets, explained below) that makes the Capital Reserve be $0.

NWS resumes.

And the NWS doesn't resume, because it's been an ongoing NWS.
The same Common Equity Sweep as before. Instead of through a dividend payment (NWS dividend), through the offset (reduction of Retained Earnings. Core Capital) attached to the ongoing SPS LP increased for free, equal to the Net Worth increase in the period.
This is why now it's called NWS 2.0.

What would resume is the NWS dividend.
Both are capital distributions restricted, and it's being used the exceptions to legalize this payment. Currently, pointing out that the Common Equity is held in escrow with the aforementioned offset, despite that it's been concealed when these SPS LP increased for free and its offset, are missing on the Balance Sheets (Financial Statement fraud).
So, we are safe. We just need to get rid of the rogue litigants that cover up this fact in frivolous lawsuits.

Please, refrain from talking about what you don't understand, FnF.

[kthomp19]

When fully capitalized NWS resumes!!!

Wrong. Under the original NWS, Treasury was sweeping not only every dollar of profit FnF made but also every dollar of net worth they had on the balance sheet. It was impossible for FnF to ever build any capital.

Under the January 2021 letter agreement, FnF can build and retain capital all the way up to their full capital requirements, including full PCCBA and PLBA buffers, before ever having to pay Treasury anything.

Another difference is that under the original NWS, Treasury got all of FnF's net worth every quarter no matter what the liquidation preference was on the senior prefs. Under the current agreement they only get either 2.5% per quarter (10% annual) of the liquidation preference or all of FnF's profit for the quarter, whichever is LESS. That means the current agreement can never lead to FnF having to pay Treasury so much that it even dips into the buffers, let alone the base capital requirements.

Why stop the lawsuits?

1) Because the January 2021 letter agreement is a fundamentally different animal than the August 2012 NWS.
2) Lawsuits cannot last forever. Under the current agreement, FnF won't have to pay a cent to Treasury until around 2040. The current lawsuits cannot last that long; even maximal delay tactics by the plaintiffs and/or defendants would still have all current lawsuits fully resolved by 2034 at the latest.