Good question... I'm quite unsure about this and have asked a few times.
But that's what I think: Technically FnF are still insolvent as the dividends they pay are not reducing their debt. So they IMO could have done it any time and could still do it.
However doing it now would imply that commons are traded again which they want to avoid. Right? And putting FnF in receivership to do it would have other side effects which they cannot oversee right now
That's why they are working on some kind of migration plan (for/to a new mortgage financing system) which kicks current shareholders in their a$$es...but does more or less the same as FnF does already.
Let's hope that Berkowitz or any of the other suits achieves his goals without destroying the commons.
Can the government exercise its warrants whenever it wants, even if it is disadvantageous to the companies?
Yes. Treasury can exercise its warrant for up to 79.9% of the common stock of each GSE on a fully diluted basis at any time during the 20-year life of the warrant.
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