Author Topic: FNMA and FMCC preferreds. In search of the elusive 10 bagger.  (Read 4278303 times)

Midas79

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #13820 on: September 19, 2019, 06:56:09 AM »
A few of the cases in front of Sweeney seek to be certified as class actions. Does anyone know if Sweeney ever actually certified them? If not it should make settlements easier, right?

Were there any other class actions in other courts?


cherzeca

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #13821 on: September 19, 2019, 07:15:17 AM »
A few of the cases in front of Sweeney seek to be certified as class actions. Does anyone know if Sweeney ever actually certified them? If not it should make settlements easier, right?

Were there any other class actions in other courts?

as I recall none of the Sweeney cases have been certified yet since they are the subject of motions to dismiss, to be argued November. the Lamberth case is styled as a class action and since it is on a trial schedule I would think it has been certified, but dont know for sure.

but the larger point is whether the collective action problem posed by having many different Ps is a good thing or a bad thing for investors.  It may inhibit settlement, but also may inhibit settlement on less than the most advantageous terms for investors. 

then again, I dont know how many investors are funding the litigation. if there is only a few funders then the multiplicity of Ps is really an illusion.
« Last Edit: September 19, 2019, 07:17:43 AM by cherzeca »

investorG

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #13822 on: September 19, 2019, 09:02:45 AM »
settling the damages cases in lamberth and Sweeney sounds quite hard.   is the Sweeney case similar to the lamberth one where any damages are paid by the companies, or is the target the Tsy?  if it's the latter, I don't see why the Sweeney cases need settlement as part of this process.  thank you.

SnarkyPuppy

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #13823 on: September 19, 2019, 09:59:28 AM »
On the Investorsunite call the lawyer said that in the event of a plaintiff win, the companies (not the government) is liable for paying the remedy. 

Is there not a risk that the government converts its $200bn in preference to convertible debt (above junior prefs) to recapitalize (in addition to exercising warrants) and if the Collins case is won by P's the companies have to deal with it (issue more equity).  No longer govt problem?

Obviously inconsistent w IPO comments from Calabria and would be weird to do relative to the easy  solution.  But basically couldn't the govt just push the contingent liability to the companies? 

allnatural

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #13824 on: September 19, 2019, 10:03:43 AM »
You're taking that investors unite call comment out of context. Specifically the Lamberth contracts case would require the damages to be paid by the GSEs themselves to the shareholders. But if the NWS were ever reversed (APA claim + constitutional remedy claim), the government (not the companies) would be on the hook. Also as per the original PSPA terms, the government is not allowed to get new securities of the GSEs past 2009 other than the warrants and the original senior pfds they already own so I doubt they are even allowed to swap out for debt bc that would be a new security.


On the Investorsunite call the lawyer said that in the event of a plaintiff win, the companies (not the government) is liable for paying the remedy. 

Is there not a risk that the government converts its $200bn in preference to convertible debt (above junior prefs) to recapitalize (in addition to exercising warrants) and if the Collins case is won by P's the companies have to deal with it (issue more equity).  No longer govt problem?

Obviously inconsistent w IPO comments from Calabria and would be weird to do relative to the easy  solution.  But basically couldn't the govt just push the contingent liability to the companies?

Luke 5:32

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #13825 on: September 19, 2019, 10:04:17 AM »
"The settlement will allow..." Typo? Freudian slip?

https://www.insidemortgagefinance.com/articles/215848-fhfa-the-end-of-the-net-worth-profit-sweep-is-imminent

The Federal Housing Finance Agency and the Treasury Department are close to signing a letter agreement that will eliminate the net worth sweep by the end of September, FHFA Director Mark Calabria told Inside Mortgage Finance this week.

The settlement will allow Fannie Mae and Freddie Mac to retain most of their earnings beginning with the third quarter.

The letter agreement is not a complete replacement of the preferred stock purchase agreement, Calabria said. It’s a temporary expedient to end the sweep as quickly as possible.

The FHFA director pointed to the December 2017 agreement between his predecessor, Mel Watt, and Treasury Secretary Steven Mnuchin, which created the GSEs’ modest capital buffers. “There were no broader policy changes,” he said. “It was just, ‘Okay, you get to have a $3 billion capital buffer.’” For more details, see the new edition of Inside Mortgage Finance, now available online.
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SnarkyPuppy

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #13826 on: September 19, 2019, 10:08:52 AM »
"The settlement will allow..." Typo? Freudian slip?

https://www.insidemortgagefinance.com/articles/215848-fhfa-the-end-of-the-net-worth-profit-sweep-is-imminent

The Federal Housing Finance Agency and the Treasury Department are close to signing a letter agreement that will eliminate the net worth sweep by the end of September, FHFA Director Mark Calabria told Inside Mortgage Finance this week.

The settlement will allow Fannie Mae and Freddie Mac to retain most of their earnings beginning with the third quarter.

The letter agreement is not a complete replacement of the preferred stock purchase agreement, Calabria said. It’s a temporary expedient to end the sweep as quickly as possible.

The FHFA director pointed to the December 2017 agreement between his predecessor, Mel Watt, and Treasury Secretary Steven Mnuchin, which created the GSEs’ modest capital buffers. “There were no broader policy changes,” he said. “It was just, ‘Okay, you get to have a $3 billion capital buffer.’” For more details, see the new edition of Inside Mortgage Finance, now available online.


No because plaintiffs wouldn't settle w a new letter agreement similar to dec 2017

investorG

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #13827 on: September 19, 2019, 10:11:32 AM »
"The settlement will allow..." Typo? Freudian slip?

https://www.insidemortgagefinance.com/articles/215848-fhfa-the-end-of-the-net-worth-profit-sweep-is-imminent

The Federal Housing Finance Agency and the Treasury Department are close to signing a letter agreement that will eliminate the net worth sweep by the end of September, FHFA Director Mark Calabria told Inside Mortgage Finance this week.

The settlement will allow Fannie Mae and Freddie Mac to retain most of their earnings beginning with the third quarter.

The letter agreement is not a complete replacement of the preferred stock purchase agreement, Calabria said. It’s a temporary expedient to end the sweep as quickly as possible.

The FHFA director pointed to the December 2017 agreement between his predecessor, Mel Watt, and Treasury Secretary Steven Mnuchin, which created the GSEs’ modest capital buffers. “There were no broader policy changes,” he said. “It was just, ‘Okay, you get to have a $3 billion capital buffer.’” For more details, see the new edition of Inside Mortgage Finance, now available online.


at this point it's head-spinning to follow calabria's public commentary.  it's unfortunate because his potential is so high given his skills.  there is some chance however all the misdirection is on purpose with them either trying to manage the stock prices on a short term basis or buy time to adjust their potential plan. 

investorG

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #13828 on: September 19, 2019, 10:15:46 AM »
You're taking that investors unite call comment out of context. Specifically the Lamberth contracts case would require the damages to be paid by the GSEs themselves to the shareholders. But if the NWS were ever reversed (APA claim + constitutional remedy claim), the government (not the companies) would be on the hook. Also as per the original PSPA terms, the government is not allowed to get new securities of the GSEs past 2009 other than the warrants and the original senior pfds they already own so I doubt they are even allowed to swap out for debt bc that would be a new security.


On the Investorsunite call the lawyer said that in the event of a plaintiff win, the companies (not the government) is liable for paying the remedy. 

Is there not a risk that the government converts its $200bn in preference to convertible debt (above junior prefs) to recapitalize (in addition to exercising warrants) and if the Collins case is won by P's the companies have to deal with it (issue more equity).  No longer govt problem?

Obviously inconsistent w IPO comments from Calabria and would be weird to do relative to the easy  solution.  But basically couldn't the govt just push the contingent liability to the companies?

the lawyer mentioned the lamberth case legal $ liability fell to the companies.  he did not clarify on the sweeney cases.  perhaps the liability to those are to the Tsy/govt? 

allnatural

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #13829 on: September 19, 2019, 10:23:08 AM »
Sweeney liability would fall to the government, we are literally sueing the government for TAKING our private property (the GSEs private shares).


You're taking that investors unite call comment out of context. Specifically the Lamberth contracts case would require the damages to be paid by the GSEs themselves to the shareholders. But if the NWS were ever reversed (APA claim + constitutional remedy claim), the government (not the companies) would be on the hook. Also as per the original PSPA terms, the government is not allowed to get new securities of the GSEs past 2009 other than the warrants and the original senior pfds they already own so I doubt they are even allowed to swap out for debt bc that would be a new security.


On the Investorsunite call the lawyer said that in the event of a plaintiff win, the companies (not the government) is liable for paying the remedy. 

Is there not a risk that the government converts its $200bn in preference to convertible debt (above junior prefs) to recapitalize (in addition to exercising warrants) and if the Collins case is won by P's the companies have to deal with it (issue more equity).  No longer govt problem?

Obviously inconsistent w IPO comments from Calabria and would be weird to do relative to the easy  solution.  But basically couldn't the govt just push the contingent liability to the companies?

the lawyer mentioned the lamberth case legal $ liability fell to the companies.  he did not clarify on the sweeney cases.  perhaps the liability to those are to the Tsy/govt?