Replies to post #13866 on Fannie Mae Preferred S (FNMAS)

[rosen62]

What would the motivation for Watt to end the conservatorship? As it is, he is in the shoes of shareholders, management and the BOD. *He* is the GSEs. If it only comes to politics now or soon -and I agree- Watt may continue the conservatorship under some excuse.

We could still be paid our dividends though. The right thing to do if the funding commitment is terminated.

[5bagger]

"The FHFA and Watt can't just end c-ship on their own"

You should re-read the c-ship agreement. Great power is given to the FHFA head, and he has the power to place them in r-ship, if the situation "requires it". Also, he has the power to remove from c-ship when in a "sound and solvent" condition.

Problem: They can't be sound or solvent if they have no money, as all profits go to Tsy. Therefore, perhaps your statement is correct... but, but, but... the FHFA director could state they ARE in a financially sound and solvent position, even under PSPA, as they are not unsound and insolvent - are they?

Resolution: As proven by Corker and Obama official last week, they have taken r-ship "language" out of the Bill (C-W) and there also won't be any future bill with r-ship in the language. They must have checked with the lawyers on this one.

Corker even realizes that limbo land and zombie is not good and they need to come up with an agreement.