Replies to post #790798 on Fannie Mae-No Politics (FNMA)

[Guido2]

Thanks DaJester. You're a better man than me. I wasn't going to bother to dig up the document for those who form opinions but are too lazy to read what it says.

[Wise Man]

You post the 4th amendment to the SPS certificate.
Dated 04/13/2021.
Not the 4th amendment to the SPSPA. Hello?

The SPS certificate is amended a few weeks after a SPSPA amendment (if considered necessary) to simply reflect the changes already approved.
The one that you mention, 4th SPS certificate, occurred in light of the 6th SPSPA amendment, dated 01/14/2021, agreed on by Calabria and Mnuchin, that includes all the known flawed aspects:
-Capital Reserve End Date.
-Release when CET1 > 3% of Total Assets.
-NWS dividend would resume in the future.
-Warrant exercised
-Stock offerings.

It's been denounced that those that call the 4th SPS certificate amendment, "4th SPSPA amendment", like you, attempt to include secretary Yellen in the Fanniegate scandal, because she was sworn in on 01/26/2021 and thus, unrelated to the flawed 6th SPSPA amendment of 01/14/2021.

Justice Alito kick-started this plan of deception aiming to involve secretary Yellen, when he called this 6th amendment of the SPSPA, "4th amendment", and sold as a game changer by the way, tricked by a letter sent by the solicitor general Perdogar "retain capital", when it's the same Common Equity Sweep as before.
He could have called it "3rd Letter Agreement" or "6th SPS amendment", but never "4th amendment" because that was the 4th amendment of the SPS certificate.
Here is a breakdown of all of the above:https://www.fhfa.gov/Conservatorship/Pages/Senior-Preferred-Stock-Purchase-Agreements.aspx

Then, there is Bradford calling the SPS "SPSPA" to the same end, but it's because he lives in a different planet.

spspa conversion.

[Donotunderstand]

DaJester

yup - thank you

the idea --- notion - theory - that there will be some "return of LP" (my quotes) now that the Jury decided in our favor is very interesting

Let us dream a bit for the moment - assume that is correct ---- in my words - some of the LP is declared null and void as a violation of good faith --- when might that start ? With the entire smoke and mirror period that """ so called ended the NWS"" ? Such that F and F keep the cash and write an exact dollar amount IOU to the LP/SP --- but that IOU is tossed out?

Very interesting - Can you elaborate on your thoughts. I just posted how the smoke and mirrors end of NWS can be seriously great for common IF IF IF --- or be worthless of the growth in the LP is never diminished

[kthomp19]

So once we reach the capital threshold, the GSEs will need to pay the lessor of 10% of the $300B+ SPS liquidation preference (and still growing with every retained dollar), or their entire net worth. Unless the GSEs are clearing over $30B in profit, the sweep continues.

The bolded part is incorrect, as shown by the passage you quoted.

Once FnF reach full capitalization, with full buffers, the quarterly dividend is the lesser of 2.5% of the liquidation preference (10% annual) or the increase in net worth from the prior quarter.

Yes, FnF will have to pay all their earnings to Treasury once full with-buffers capitalization is met since the liquidation preference is so massive, but the dividend won't be their entire net worth as was the case with the original NWS from 2012. Under the current agreement, once FnF hit full capitalization with full buffers, the dividend to Treasury can never take them below that threshold.

When people say "the NWS ended" they are grossly over-simplifying the situation.

I agree. What happened was that the situation changed from "the companies can never build capital and the juniors/commons have no path to economic value" to "the companies can build capital but the juniors/commons still have no path to economic value".

IMO - This will still be a violation of the good faith and fair dealing of the shareholder agreement now that we have the jury victory officially entered, and barring any successful appeal.

That will require a new lawsuit. What makes you so confident that such a lawsuit will be filed? Especially since it has been over 3 years since the January 2021 letter agreement was signed and almost 6 months since the jury handed down their verdict? What on earth are these putative plaintiffs waiting for?

Wait, do you have a crystal ball? Have you been holding out on me this whole time?