Replies to post #795632 on Fannie Mae-No Politics (FNMA)

[The Man With No Name]

KT spitting facts.....and no amount of whining will change reality.

[Wise Man]

"LP that is off-balance sheet" DOESN'T EXIST. Financial_Stmnt fraud.
Even if that were the case, FnF publish the Financial Statements on a consolidated basis, and thus, the gifted SPS LP and its offset that reduces the Retained Earnings account (LP handed out for free, like the initial $1B debited from the Additional Paid-In Capital account - CET1-. Source), must show up on the Balance Sheets (like the MBS obligations and underlying mortgage assets held in MBS Trusts -SPEs-)
The lawyer kthomp19 thinks that you can have SPS LP out there, unaccounted for in the Financial Statements - Equity-, and without satisfying the Asset/Liability Matching principle.
Or maybe he thinks that FnF informing about the total SPS LP outstanding in the SEC filings, will do it. No, in this world, it's accounted for in the Financial Statements.

For Fannie the total LP right now is $199.2B (page 49), $120.8B of which is on the balance sheet (page 59).
For Freddie the LP right now is $120.4B (page 2), $72.6B of which is on the balance sheet (page 45).

Finally, another gaffe from kthomp19:

dividends ARE allowed during conservatorship if the conservator decides they are in the public interest,

He is referring to "the supplemental" CFR 1237.12 exception (4), enacted in the July 20, 2011 Final Rule, by DeMarco, for the moment the SPS had been fully redeemed with the exception to the Restriction on Capital Distributions by statute, U.S. Code §4614(e). He needed another exception to this restriction to apply the assessments towards, under the guise of dividend payments or nowadays with another capital distribution: SPS LP increased for free (the Recap is achieved stating that the Common Equity is held in escrow).
The provision (c) states:

This section is intended to supplement and shall not replace or affect any other restriction by statute

And the restriction by the statute mentioned, is meant for the Recapitalization (Retained Earnings account). It's telling you that you can't replace it with "in the public interests", unless you refer to Recap in a Separate Account, in the public interest.
So, this supplemental is for Recap in a separate account (External Position). Deplete capital for Recap.