Fannie Mae (QB) (FNMAO) News

I am in the same age boat as you but certainly for the wait I have had, and all the rides I missed, I am no way selling it at 10. I want to see where this settles initially and then determine if it has a dividend path, more upward price path (what level of free hand they have in privatization) and of course exit before they take it back again whenever another bubble happens (right now we are into a new bubble like 2008)
But if you ask me to put a price on it as a one line response it may be 45-50 as something between the greedy answer and the low ball answer. But may skip and wait further 

payout per share will be approximately $0.34 for FNMA (Fannie Mae) and $0.76 for FMCC

This is a great example of the superiority of the old fashioned Magic 8 ball over this AI crap.

It looks like the AI crap simple took its bottom line estimate and simply divided it by the number of common shares of the 2 GSEs or something along those lines (it may have counted the preferred shares as common also).

I think the actual is something like .05-.10 FMCC and .50-1.00 per $50 par preferred where it would be slightly different for each of the GSEs.

I am not too bummed for not getting anything for my Fannie commons. You have to look at the big picture. For the JP you are talking a settlement of 1-2% of PAR, whereas, for the Fannie common, for most of us, we are looking at the strong possibility (the Magic 8 ball says its a lock) of multiples.

Nats

What is government dilutes and sells? Any updated thoughts on cap requirements? That will be a huge swing factor in all of this. 2.5% and almost no dilution beyond government. 4.5% and it's ugly. I haven't seen a peep related to this.

Kt, your rhetoric is not funny at all. My Mother passed from this life into eternity. She lived to be 90 years of age a wonderful Christian Woman who loved God with all her heart.

I have not filed anything before a magistrate here on this earth. I encourage you to be careful my friend defending the actions of the wicked. No one will escape judgment.

The companies transferred $301 billion to the treasury and now you are contemplating the common shareholders pay the treasury with their shares. And somehow you think this is right.

KTHOMP19 you are loitering this board with non-sensible garbage ideas that imply stupidty at the highest level of intelligence. Can you stop posting all this trash here. I am sure many would appreciate it if you stop.

Thanks in advance.

GOD bless DJT he is doing everything RIGHT to bring high value to taxpayers, to Fannie and Freddie Cos and their shareholders.
See FNMA & FMCC shares in the TEENS, is the next price movement.
AMEN!

kthomp19 paid user 🤣😅
Nobody pays for this dogmatic nonsense. This is a frustrated user that I pity.
I feel better since I've been ignoring kthomp19.
In retrospect, the user was not right about anything.

Good night, late in LA

kthomp19 is paid common lunatic hater with LOW IQ LEVEL ,HAVING MENTAL RETARDATION .

Why are you so concerned about the pennies coming our way from that ridiculous case? We swing more than that daily. Keep your perspective. The win was the unanimous decision in our favor. That is priceless. Let the admin work their plan. Plan the work, work the plan.

Question is when will we get the compensation ? Anyone ?

Hi Eternal, I know I have explained why I’m out at $10. It doesn’t mean the GSEs are not worth more. Realistically what is your target price to get out?

This week I saw my freshman dorm roommate whom I hadn’t seen in 13 years. I also connected with my sophomore year housemate whom I haven’t seen in 20 years. Tonight I saw my sister in law whom turned 60. Time is a thief. When I met these ladies we were in our 20’s, in the blink of an eye we are all middle aged ladies. Where did time go!?!?

$180 per share is nice but $10 is enough to meet my goals.

It bugs me so much when people post links with no comments. Are you waiting for me to do the leg work? I will. I always do.

The document is a Memorandum Opinion from the U.S. District Court for the District of Columbia, dated March 14, 2025, regarding a lawsuit involving Fannie Mae and Freddie Mac shareholders. The case revolves around the Net Worth Sweep, a provision in the Third Amendment to the Senior Preferred Stock Purchase Agreements (PSPAs) between the Federal Housing Finance Agency (FHFA) and the U.S. Treasury. The Net Worth Sweep, enacted in 2012, required the GSEs to transfer nearly all of their profits to the Treasury, effectively nullifying dividends for other shareholders.

Shareholders sued, claiming this arrangement breached the implied covenant of good faith and fair dealing, harming their investments. In August 2023, a jury found in favor of the shareholders, awarding them $612.4 million in damages. The defendants (FHFA, Fannie Mae, and Freddie Mac) then filed a motion for judgment as a matter of law, arguing that the jury’s verdict should be overturned. The court denied this motion, upholding the jury’s decision and confirming the award. The ruling supports the argument that the Net Worth Sweep unfairly diluted shareholder value and breached contractual obligations.

This decision could have major implications for Fannie Mae and Freddie Mac’s future ownership structure and potential shareholder recovery. The case may still be appealed, but for now, the ruling favors non-Treasury shareholders.

https://storage.courtlistener.com/recap/gov.uscourts.dcd.163155/gov.uscourts.dcd.163155.439.0_1.pdf

Signed 3/14/2025 by
Royce Lamberth
U.S. District Judge

Satisfaction for each individual usually comes from….

When you purchased
How much you purchased
What price you purchased

vs.

Opportunity cost (realized / unrealized)

You didn't get my point. I'm referring to two subjects:1. Treasury:  they can make all different kinds of salads: 79%, 90% and 95%...2. Me: I am happy with $30/shares, below that I am not satisfied.

I think it's because of 13 years of interest

Ok you said a lot. I’ll just respond to what we’re talking about out of the gate. Speculation is that Fannie and Freddie may contribute to the SWF. I’m not saying they should, I’m not saying they will, I’m saying if they do - it will be dilutive to existing common.

A cashless warrant transfer is dilutive…when exercised. Shame on the buyer to the cashless transfer if they can’t exercise - who does that? Nobody.

Someone cannot do maths properly !! For me looks like FMCC, 650M float of commons receive approx $0.05 to $0.08 per share.

Warriors,  what's with this April 2nd date?TIA

Kthomp - you were wrong about the status of the Bryndon Fisher lawsuit. Any comments for being wrong?

Yup, I was wrong about that.

I don't understand how he was able to appeal since his case was dismissed by the CAFC along with Cacciapelle and the other NWS takings cases, and then the Supreme Court denied cert, but at least this is good news for his lawyer team: they have managed to keep their cash cow alive. It's no wonder he won't settle, he probably needs a huge gain on his commons just to avoid bankruptcy from all the legal fees he has paid.

Fisher's case might not be a total corpse but it's a dead man walking. I look forward to the oral arguments so I can laugh at his vain attempts to distinguish his case from all the others that are dead.

Yes, more than 79%. That's what Paulson said the government would take 90% or more of the FNMA & FMCC stocks.

Exactly.

For an individual like me, I am satisfied with PPs at $30 regardless of what and how much they take.

You might have missed the point here. The price won't get to $30 if Treasury ends up with 90%. FnF have 1.8B shares combined, so a share price of $30 requires not only the legacy common to keep the other 10% (and not have the juniors or outside investors eat into it), but also a combined company valuation of $540B. That's a bridge even Ackman wouldn't cross.

Hopefully Barron is ready to go with his lawsuit.

🤣

I'd be surprised if page 1 has been written yet.

If GOV owns more than 80% of the GSEs, their MBS of $5T will be counted as GOV liability. Hence, the national debt will increase immediately by $5T. That's what I heard 10-12 years ago, as to why 79.99% of warrants.

Nope. This is false. Read this post by obiterdictum to understand why.

The true threshold for forced balance sheet consolidation is 95%, not 80%.

Happy to let the government buy my shares at the price i am willing to sell them at.

Otherwise... there would be some theft involved.

It finally comes out. Your definition of "theft" is any action that results in the share price being lower than your exit point. How convenient.

If you bought your shares after the conservatorships started, and especially if you bought after the NWS, you do not have the moral high ground here.

Has anyone substantiated the comment related to required CET1 levels only being satisfied via retained earnings? The comment was supposedly made during the Urban Institute roundtable.

Do you have a quote? I haven't heard about that comment.

Been looking but cannot find anywhere that state regulatory capital can only be built via RE.

The definition of core capital in 12 USC 4502(7) is:

(7) Core capitalThe term “core capital” means, with respect to an enterprise, the sum of the following (as determined in accordance with generally accepted accounting principles):
(A) The par or stated value of outstanding common stock.
(B) The par or stated value of outstanding perpetual, noncumulative preferred stock.
(C) Paid-in capital.
(D) Retained earnings.
The core capital of an enterprise shall not include any amounts that the enterprise could be required to pay, at the option of investors, to retire capital instruments.

Core capital is the only kind that can count towards the minimum (leverage) capital requirement. That means the only ways to directly increase it are to sell new common stock, sell new non-cumulative preferred stock, increase paid-in capital (conversion of the seniors to commons would do this), or retain earnings.

CET1 is even more restrictive because CET1 doesn't include any preferred shares. The only way to increase that is sell new common stock, increase paid-in capital, or retain earnings.

I don't like this precedent. Pulte naming himself chairman is in direct contravention of the law, even though it doesn't functionally matter because he controls the decisions of all FnF employees as FHFA director.

I don't know who would be willing to challenge this in court, though. While FnF are in conservatorship there isn't really any upside to doing so that I can see.

Hmmmm....I wonder what he means by BIG stake.

Just look at the way Treasury values the seniors and the warrants. The former is a huge number (over $200B), the latter a rounding error. Our former FHFA director and current OMB Associate Director for Treasury, Housing, Commerce pointed this out.

It's clear where Treasury places the bulk of the value of its FnF equity stake.

Are you saying that every buyer of common stock is unreasonable?

I'm saying that there is no reasonable expectation for any buyer of FnF stock after the NWS, even now with the jury verdict and subsequent LP ratchet letter agreements, to have any economic rights given the current status of the contract and amendments.

The January 2021 letter agreement, which established the LP ratchet up to the full capital requirements plus buffers,

I would disagree. If someone buys a common share today, clearly after the NWS, they are expecting economic rights.

There's only one thing that could truly settle this disagreement, which is actually filing a lawsuit. Sound familiar?

(Though you should note that your prior accusation that I shut down debate by pointing to my first signature line has been proven incorrect; I have been debating you on the merits of your putative case for quite some time.)

This is reasonable in light of the Conservatorship being temporary, the NWS having been deemed a breach of the implied covenant of good faith and fair dealing, and the Charter Act which creates these as privately owned entities, not government owned. Are you saying that every buyer of common stock is unreasonable?

No, I'm saying that anyone who bought FnF shares (common or junior pref) after the NWS has no reasonable expectation of future economic value. You have already said that you disagree with this, but again this disagreement can only truly be resolved by a court.

In addition to the single day drop in share price, there is a ripple effect that was ongoing, via suppressed share price, lack of dividends, etc. Nothing that could be calculated as damages, because we can't say what would have happened if not for the NWS, but there is implied damage beyond the initial price drop.

Lamberth clearly disagreed with that last part because he didn't allow any damage models other than the price drop one to be used.

But at no point did the court say that the GSE shareholders relinquished their rights, or that the GSEs could not be released and/or recover economic value for shareholders. We get the jury award and KEEP the common and preferred shares and economic rights contained therein.

What economic rights? The NWS removed all of common and juniot pref holders' liquidation and dividend preference, and the letter agreements kept that status quo in place. What remains?

Sure, as a temporary measure to give Treasury time to sell off the shares, and they relinquished any common voting rights in the meantime. But does Treasury own any publicly traded companies in perpetuity? That would be news to me.

The SWF's ownership of FnF wouldn't have to remain greater than 50% in perpetuity. There are tons of ways to structure things so that the SWF gets the economic benefits of owning >90% of FnF common without having to worry about a controlling stake. Giving up voting rights is only one.

Others include partially assignable warrants that exercise on sale and non-cumulative preferred shares that automatically convert to common on sale, and I'm sure there are a whole lot more.

Yes, as far as I recall, they sold off their assets - mostly real estate holdings, and used the proceeds to pay down debt, and buy back all of the common stock. I don't know if they paid off all debtors, or just the ones that required them to do so. There were some assets left over, but not enough to redeem preferred, so they were left untouched. Again, going off memory - I don't believe their balance sheets were consolidated. They used some stock gymnastics - Wheeler "owned" CDR via one remaining common share that they controlled. CDR technically was still it's own entity, but no longer publicly traded with the single stock remaining. That left the preferred in limbo and fully under control of Wheeler.

Thanks for the explanation. That doesn't sound like a technical liquidation, just an "outside" tender offer for the common shares only.

Neither of those things happened, however the lawsuits were dismissed. There were a few of them, this is one that I think summarizes the situation: Kim vs CDR. The allegations were for a breach of the implied covenant of good faith and fair dealing, and breach of fiduciary duty.

It looks like lawsuit threats didn't work there either!

The argument by Preferred holders was that in a liquidation scenario, preferred should have been redeemed before common. Under a change of control scenario, preferred should have been given the option to convert their preferred to common. Neither of those things happened, however the lawsuits were dismissed.

That's understandable. There was no actual liquidation, and I assume that the preferred contracts didn't contain a unilateral conversion option (else they would have exercised it).

I don't believe it's relevant to the GSEs, unless there is some new entity established that FnF get merged into. That would require Congress, so seems highly unlikely to me.

That makes sense. I have long since believed that the only two ways for FnF junior pref holders to get screwed were FnF transferring everything into newcos, which is only possible via receivership or Congress. It looks like WHLR was essentially the newco for CDR.

I think you mean Chairman/men of both Fannie Mae & Freddie Mac, not CEO.

Yes, you're right. Thanks for the correction.

Big difference, right between Chairman & CEO?

Technically but not functionally. Neither the Chairman or CEO of either Fannie or Freddie has any real power while they are in conservatorship. Those powers are held by the FHFA director.

So "Seniors" = SPS + LP and thus you treat SPS + LP as pari passu (i.e. with equal claim/footing, no distinction).

SPS = Senior Preferred Shares
LP = Liquidation Preference

They aren't separate things. The LP of the seniors stands at around $350B for FnF combined.

Isn't there talk of potentially 'honoring' the SPS (original), but not the LP? (i.e. writing just the LP off)

Talk, yes, but it comes almost exclusively from those who currently hold commons. Likely because their only path to making significant money from here requires just such a LP writeoff.

Contrast that to John Paulson and Mark Calabria, people with actual ties to the administration, that treat senior conversion as a foregone conclusion.

Also, looks like Lamberth made Final Judgement & thus the 60-day appeals window is now ticking.

Yes, I believe that's true. We should hear something by mid-May.

First, Treasury and FHFA must agree to cancel the net worth sweep (NWS increase dollar for dollar on retained earnings) eliminate Treasury’s liquidation preference, and cancellation of the Senior Preferred.

"Must"?! Or else what? You're going to tell your mommy?

It's clear that you have no intention of filing your own lawsuit, despite your constant whining over illegal and unconstitutional activity. Hypocrite.

Fannie and Freddie already have repaid their senior preferred stock, to make the companies’ repay their indebtedness to Treasury twice would be fraudulent.

Wrong again. If Treasury converts the seniors to common the second round of payment they receive won't come from the companies, but instead outside investors who buy Treasury's common shares. Saying that the companies will have repaid Treasury twice is just plain false.

FnF do not need any more capital if SPS are used as a backstop.

Wrong. This table is from Fannie's 2024 10-K. Notice the huge negative numbers, which represent how far below their regulatory capital levels they are. If FnF truly did not need any more capital those numbers would be zero or positive, by definition.

Why would any one wants to buy common shares of such companies?

Why would anyone want to buy them now? If people would be stupid to buy commons under those circumstances (post massive dilution), they would be even more stupid to own them right now.

The easy and simple way Gov can make money from FnF is to buy back warrants at good price without creating legal problems.

FnF need to be conserving and building capital, not wasting it buying back warrants that it has no use for. The same goes for redeeming the juniors for cash: converting them to common accomplishes the same capital stack-clearing goal but $33B cheaper.

Then using SPS as a back stop for FnF without Gov explicit guarantee helps to stabilize MBS market..

If the seniors stay in place, FnF can't hit their capital requirements until the late 2030s. The seniors don't count towards any form of regulatory capital.

If you assume the GSEs are worth $ 250 bn - 10% is $ 25 bn - the UST would make more money by cancelling the SPS and exercising the warrants rather than degrading common with a cramdown.

An opinion, not a fact. One I disagree with.

The only way Treasury makes more money by warrant exercise than senior cramdown is if the P/E is significantly lower with cramdown. The AIG precedent (Treasury converted its seniors to 92% of common and the P/E was still in the teens a couple years later) proves that prospect highly suspect.

If the P/E is the same in both scenarios then Treasury makes more money by converting the seniors. 95% > 79.9%, simple math.

You are being disingenuous with your "hundreds of billions" statement.

No I'm not. Treasury voluntarily invoking section 6.12 of the SPSPAs would result in them having to give up the seniors (which they value at over $200B) and warrants as well as pay back the $110B of money they received in dividends over the money they sent to FnF via draws on the funding commitment. My statement is factually true, not disingenuous.

Yes, i think it was a mistake by Grok, in that
possibly Grok interpreted the Federal National Mortgage Association as FNMA - the main thing is that Grok is reporting 76 cents/share for FMCC

Exactly, FNMA commons are not part of the suit. Both companies preferreds and FMCC commons participated in the lawsuit.

I agree, recall clearly that FNMA commons weren't part of the Lamberth 8-0 win. It was thought FNMA may sue separately.

I was under the impression that FNMA commons weren't part of the Lamberth 8-0 win. How can they receive any compensation if they weren't part of the lawsuit.
Anybody else care to chime in, TIA.

FNMA

The shares are preferred but they thought they are preferred and thought the execution will happen as they prefer LOL

Excellent post. 100% agree.

Very Ew Understand the Derivative Market.

In 2008, the Derivative Market Writers couldn’t cover all the paper they had written.

F&F, WMI/WMB, Lehman’s are the recipients of the Derivative Contracts insurance policies.

Yes TBTF FAILED.



Ron

fisher already screwed up shareholders release by years by allowing biden to remove Calabria. He can only screw this up further for shareholders. The judge could rule there was a takings and now the govt owns 100% of the companies and shareholders get pennies fom the takings with no further ownership interest.

Institutions up - will explode w UPLISTING !
Since 12/3/24 v 3/20/25 Institutional Holdings of $FNMA have grown from 132.34M shares to 208.7M shares. This is missing the Transamerica shares reported by @nicosintichakis from 3/19 (another 566K shares). 🇺🇸🚀 expect super bullish fight among institutions competing here for 💰s https://t.co/CFmuwWMWnb pic.twitter.com/BZb517WnfO— Stankonia Capital #MAGA 🇺🇸 (@StankoniaCap) March 21, 2025

From Google Fannie/Freddie Board:
It seems likely that the payout per share will be approximately $0.34 for FNMA (Fannie Mae) and $0.76 for FMCC (Freddie Mac), based on estimates and available data.

https://grok.com/share/bGVnYWN5_b24ad953-3c15-4022-81e0-8f3c0aab2d26

FnF JPS holders are trying to play the JPS conversion game while holding wrong cards.

JPS are mostly owned by individuals and many institutional investors and they do not have any leverage with FnF. But in case of SPS it is the Gov that is the single largest investor and has all the leverages.

When there are only few large investors they play the game of squeezing companies in to liquidity crisis and bankruptcy, then convert their investment in to common shares wiping out existing shareholders. In case of FnF, only Gov has these cards to play this game. In 2008 Tsy/Fed/FHFA played this game and caused worldwide financial meltdown. Now there is no chance that the current administration will play this game once again.

JPS holders need to understand the cards they have and accordingly have the right expectation.

Gov has 80% warrants (commons) and so it has no need to convert SPS. Most likely Gov will use SPS as backstop instead of explicit guarantees.

You have it all wrong.  Do not feel bad.  It is very confusing how this works.  Read my posts and the responses.

BAAAAMMMMM!!!

Fantastic news!