Lite
7 hours ago
Ah but yes Congress can help remedy this. All Pulte needs to do I\is work with Congress to void the SPSP Warrants, since they can and will to help right the Conservatorship.
After all, it has been decided that Shareholders have been mistreated by the Government and this has caused financial hardships on Investors. Has it not?
Per GROK..
Yes, Congress has the authority to change or nullify the Senior Preferred Stock Purchase (SPSP) warrants for Government-Sponsored Enterprises (GSEs) like Fannie Mae and Freddie Mac, as these warrants stem from agreements enacted under federal law and oversight. The SPSP warrants were issued as part of the Senior Preferred Stock Purchase Agreements (SPSPAs) in 2008, authorized under the Housing and Economic Recovery Act (HERA) of 2008 (Public Law 110-289). HERA granted the Treasury temporary emergency authority to provide financial support to the GSEs, including the ability to purchase securities and establish terms like the warrants.
Since Congress has legislative power over federal statutes and appropriations, it could pass new legislation to amend HERA, terminate the warrants, or alter the terms of the SPSPAs. For example, Congress could:
- Directly nullify the warrants by enacting a law that voids them or mandates their cancellation.
- Modify the Treasury’s authority under HERA retroactively, affecting the legal basis of the warrants.
- Require the Treasury to divest or relinquish its warrant rights as part of broader GSE reform.
However, any such action would face practical and political hurdles:
- **Legal Challenges**: Nullifying the warrants could be contested by stakeholders (e.g., Treasury, investors) as a breach of contract or a "taking" under the Fifth Amendment, potentially requiring compensation.
- **Market Impact**: The warrants represent a significant portion of the GSEs’ potential ownership (79.9% of common stock). Canceling them could destabilize the GSEs’ capital structure, affect shareholder value, and disrupt housing finance markets.
- **Political Will**: GSE reform has been a contentious issue for years, with competing interests among lawmakers, the Treasury, and private investors. Consensus on altering the warrants would be difficult.
Historically, Congress has debated GSE reform extensively without decisive action on the warrants. For instance, bills like the 2018 Corker-Warner proposal and later discussions under the Trump and Biden administrations have explored recapitalizing and releasing the GSEs from conservatorship, but none have directly nullified the warrants. The Treasury could also voluntarily cancel or renegotiate the warrants under existing authority, but this would likely require Congressional pressure or approval, especially given the fiscal implications.
In short, Congress *can* change or nullify the SPSP warrants through legislation, but doing so would depend on navigating significant legal, economic, and political complexities. As of now, the warrants remain intact, set to expire on September 7, 2028, unless acted upon sooner.
Guido2
7 hours ago
LORD, SEND US NO MORE SAVIORS
You sent us Mnuchin, who acknowledged his predecessors' swindle and then proceeded to loot another $45 billion of our equity.
You sent us Mark Calabria, the author of HERA to free us, but he hid stress test results and wrote capital requirements that assure we'll remain in perpetual slavery.
You now gave us Pulte, a home builder and business man to remedy what's wrong with a rogue government agency. Instead, he is spending his time fixing what ain't broke.
If you stop sending us Saviors, we'll learn to accept that Evil will Prevail.
Spicoli
7 hours ago
Frater thinks the GSEs will become dividend-paying utility-type equities that could grow with the mortgage market.
MBS investors are very important, and we must maintain liquidity in this market.
Further, addressing the senior preferred, the liquidation preference, and the…— Alec Mazo (@Alec_Mazo) March 19, 2025
navycmdr
9 hours ago
Fannie, Freddie board shakeups bring conservatorship exit closer to reality
Bill Pulte now heads both the Federal Housing Finance Agency and the Fannie and Freddie boards
Marty Green, a principal with the law firm Polunsky Beitel Green LLP, thinks that the board shakeups will accelerate Fannie and Freddie’s departure from FHFA conservatorship.
Luke Baynes - March 18, 2025
https://www.scotsmanguide.com/news/fannie-mae-and-freddie-mac-board-shakeups/
Mortgage, Regulations and Compliance
The bombshell report late Monday that Bill Pulte, the new head of the Federal Housing Finance Agency (FHFA), had replaced 14 board members at Fannie Mae and Freddie Mac and installed himself as chairman of both boards came as a shock to many in the mortgage and housing industries. The FHFA oversees those government-sponsored mortgage companies, so Pulte’s new roles give him even more control over the direction of Fannie and Freddie.
What does Pulte’s power play mean for the future of Fannie and Freddie?
Marty Green, a principal with the law firm Polunsky Beitel Green LLP, thinks that the board shakeups will accelerate Fannie and Freddie’s departure from FHFA conservatorship.
“I think it increases the odds fairly significantly that we see Fannie and Freddie exit conservatorship at some point during the next four years,” Green said. He added that he expects the process to start before the 2026 midterm elections.
In addition to Pulte, who is in his late 30s, many of the other newcomers to the Fannie and Freddie boards are relatively young, Green said. One incoming Fannie Mae board member, Christopher Stanley, is an acolyte of Elon Musk who has worked at both X and SpaceX, according to his LinkedIn profile. More recently, he was tapped by Musk for an unspecified role in the Department of Government Efficiency (DOGE), according to The New York Times.
Green said that Stanley is an “unusual person to be appointed” to the Fannie Mae board of directors due to his youth and a lack of experience in the mortgage industry. He noted that Stanley’s appointment may extend DOGE’s influence.
“He may bring a great, fresh perspective. There’s certainly cybersecurity issues when you look at the mortgage data and other things that Fannie and Freddie have that are still going to be important,” Green said. “But the fact that he has such a close connection with Elon Musk and that he works at SpaceX as well, and that he’s on the DOGE team, makes that something that’s going to give them a lot more influence and insight as a result of that appointment.”
The 14 members of the boards who were ousted by Pulte were older and had more experience in the housing and mortgage industries. One member, Simon Johnson, a British-American economist, won a Nobel Prize in economics.
Green acknowledges that the optics of Pulte heading both the FHFA and the Fannie and Freddie boards “probably aren’t perfect” from a corporate governance and oversight standpoint. But he believes that Pulte’s background as a former board member of homebuilding company PulteGroup Inc. will translate well to his new role.
“We think that overall he will be a friend to the housing industry just because of his history with Pulte Homes,” Green
DaJester
11 hours ago
I have already written this post, and this other one as a follow-up, regarding this same stupid argument (that the juniors can be wiped at all, let alone without the commons also going to zero). It's just schadenfreude-fueled wishful thinking.
I can give you an example of Preferred getting screwed relative to Common from my personal experience, if you care to hear it. Cedar Realty Trust(CDR) which got bought by Wheeler Realty (WHLR). They paid $29 per share to retire the CDR common (my cost basis was $5.58 - so great for me ). After liquidating the common, there was not enough residual value to liquidate the preferred. They essentially just skipped over them to pay common off. So the Preferred did not get redeemed, and instead just went under control of the acquiring company. Preferred holders were livid at the premium conversion common was getting in what was essentially a liquidation, and that they were getting nothing - dividends not even being paid. After acquisition, Wheeler struggled to pay dividends to the old CDR preferred, which of course affected the share price. Preferred holders were stuck or sold at a loss, whereas most common holders realized significant gains. I haven't been following for a couple years, but I think the plan was to convert the CDR preferred into Wheeler common, causing massive dilution and paled compared to the CDR common liquidation price.
Now before you get too excited, I'm not saying this is relevant to the GSEs or that common will get paid off and the Preferred stuck with some GSE newco. I'm just saying there are examples of Preferred getting hosed relative to common, and lawsuits and attempted injunctions did not help.
TightCoil
11 hours ago
HOW? RED CLOUD - UGG
To me, it seems that ALL GOVERNMENTAL
Workers Incompetent few exception including federal workers, analysts, managers, secretaries, etc. Including workers, management and most staff in State governments, County people, City workers.
Incompetence Way of Life for Them