FNMA and FMCC preferreds. In search of the elusive 10 bagger.

[BeerBBQ]

Does the denial strengthen the Sweeney case? Since the Government has successfully argued that they have the authority to take all the assets, will they be allowed to continue arguing that the FHFA is not part of the government in the Sweeney case?

[orthopa]

this really is waiting for godot.....

[Guest cherzeca]

Supreme Court denied hearing.  ::)

Does this mean Perry case is officially dead, and the only legal pathway forward is the Sweeney case?

 

to the lawyers on the board:  although they are longshots in their own right, would the other outstanding cases in the 3 appeals courts + rop/bhatti be hurt by this supreme court ruling (ie is it viewed as a 'blessing' of the dc ruling)?  thank you.

 

muscleman, i think it's sweeney (which is years away from any potential positive outcome), delaware appeal, and maybe some pennies from the lamberth remand as remaining legal options. plus the longshot perry look-a-like suits mentioned above sprinkled around the country.

 

a denial of cert does not touch the merits.  if a circuit wanted to rule for Ps (big if) then it would know that its case conflicting with  perry would result in a likely grant of cert by scotus.  but generally other circuits are inclined to say hey this is an administrative law case, i'll just decide the way the dc circuit decided cause they handle more such cases

[HalfMeasure]

Supreme Court denied hearing.  ::)

Does this mean Perry case is officially dead, and the only legal pathway forward is the Sweeney case?

 

to the lawyers on the board:  although they are longshots in their own right, would the other outstanding cases in the 3 appeals courts + rop/bhatti be hurt by this supreme court ruling (ie is it viewed as a 'blessing' of the dc ruling)?  thank you.

 

muscleman, i think it's sweeney (which is years away from any potential positive outcome), delaware appeal, and maybe some pennies from the lamberth remand as remaining legal options. plus the longshot perry look-a-like suits mentioned above sprinkled around the country.

 

a denial of cert does not touch the merits.  if a circuit wanted to rule for Ps (big if) then it would know that its case conflicting with  perry would result in a likely grant of cert by scotus.  but generally other circuits are inclined to say hey this is an administrative law case, i'll just decide the way the dc circuit decided cause they handle more such cases

 

Wasn't the cert also rather narrow in its scope anyway?

[Guest cherzeca]

@1/2

not really.  two claims were directed to invalidate NWS.

[Seahug]

So are we screwed and should we sell?

 

Except that seems best time to buy this is when absolutely looks hopeless and NOT when there is good news.

[Seahug]

I intend to hold. I think there's still that RNC resolution to release FNMA and settle.

[Eye4Valu]

My take for a while has been that our best shot legally is in the Court of Claims. It still makes sense to me that Mnuchin will eventually implement reasonable administrative reform that is positive for all stakeholders. If not, Sweeney is not a bad Plan B. 

[orthopa]

This turned from a legal case to an administrative case the day Mnuchin was picked for Secretary. This may have prodded action a little sooner but otherwise was meaningless.

[Midas79]

Tim Howard weighed in on the potential impact of the "quick peek" documents in the amended complaint due tomorrow.

 

https://howardonmortgagefinance.com/2018/02/05/waiting-for-mr-corker/#comment-5907

 

In particular he mentions the Perry remanded case and the Fairholme case as the main beneficiaries:

 

The Perry Capital remand (breach of contract and fiduciary duty) and the Court of Claims case (regulatory takings) are where the government’s bad actions will be of the greatest value: the more blatant and obvious the government’s behavior with respect to Fannie and Freddie, the greater the damages that are likely to be awarded should plaintiffs ultimately prevail in these cases.

 

Apologies if this has been mentioned before, but if the court eventually does award damages would they only go to the plaintiffs, all shareholders who own the same class and series of shares as the plaintiffs, all junior preferred holders, or some other combination? Is that up to the judge or is it specifically requested in the complaint?

[rros]

Tim Howard weighed in on the potential impact of the "quick peek" documents in the amended complaint due tomorrow.

 

https://howardonmortgagefinance.com/2018/02/05/waiting-for-mr-corker/#comment-5907

 

In particular he mentions the Perry remanded case and the Fairholme case as the main beneficiaries:

 

The Perry Capital remand (breach of contract and fiduciary duty) and the Court of Claims case (regulatory takings) are where the government’s bad actions will be of the greatest value: the more blatant and obvious the government’s behavior with respect to Fannie and Freddie, the greater the damages that are likely to be awarded should plaintiffs ultimately prevail in these cases.

 

Apologies if this has been mentioned before, but if the court eventually does award damages would they only go to the plaintiffs, all shareholders who own the same class and series of shares as the plaintiffs, all junior preferred holders, or some other combination? Is that up to the judge or is it specifically requested in the complaint?

I have to double check but I think at least Perry expressly covered all preferred holders. Will get back on this.

 

This is in the ruling by the appeals court. Does this answer your question?

We remand this claim, insofar as it seeks damages, for the district court to evaluate it under the correct legal standard, namely, whether the Third Amendment violated the reasonable expectations of the parties at the various times the class plaintiffs purchased their shares. We note that the class plaintiffs specifically allege that some class members purchased their shares before the Recovery Act was enacted in July 2008 and the FHFA was appointed conservator the following September, while others purchased their shares later, but the class plaintiffs define their class action to include more broadly “all persons and entities who held shares . . . and who were damaged thereby,”

I believe the appeals court later changed a bit their stance regarding subdividing classes. 

[SnarkyPuppy]

"Who held" - what about those of us who bought in 2013+?

[Midas79]

In the past I have mentioned that my understanding of something Craig Phillips had said in his talk last month was that Mnuchin was committed to ending the conservatorships during this presidential term. So I went back and listened to it again, twice, and didn't hear any of that. Was I hallucinating before? Did anyone else hear the same thing I did the first time?

[rros]

On another note... I kind of like that Pimco gets involved.

https://www.pimco.com/en-us/insights/viewpoints/viewpoints/us-housing-finance-reform-why-fix-what-isnt-broken/

 

I spoke too soon. Are they calling for full nationalization?

[investorG]

is the Washington federal request for an extension a couple days before the due date common or suspicious of something else going on?

[investorG]

In the past I have mentioned that my understanding of something Craig Phillips had said in his talk last month was that Mnuchin was committed to ending the conservatorships during this presidential term. So I went back and listened to it again, twice, and didn't hear any of that. Was I hallucinating before? Did anyone else hear the same thing I did the first time?

 

mnuchin has said this before, I believe, last year.  perhaps Calabria said it as well at some point?

[muscleman]

What’s causing the sharp move up yesterday? I can’t see any news. It just seems like the market quickly brushed off the Supreme Court rejection.

[investorG]

if we assume base case a) nothing legislative this year and b) nothing positive judicially this year,

 

what are the odds that some admin action is taken vs waiting for 2019 ---  over or under on 25pct chance of admin action in 2h 2018?

 

[rros]

if we assume base case a) nothing legislative this year and b) nothing positive judicially this year,

 

what are the odds that some admin action is taken vs waiting for 2019 ---  over or under on 25pct chance of admin action in 2h 2018?

My view is that markets might influence decisions one way or another. Most do not feel this way and look at market movements as unrelated. But a big market move might have that power. Not just on the WH but also members of Congress. Specially, if real estate is affected and the potential of losses by FF becomes greater. There is a reason why Watt/Mnuchin used the words "exigent circumstances" in the letter of agreement.

 

In this regard, I believe a whopping move is right ahead. Measures of narrow money peaked mid '17 in Euroland. Softening PMI news came yesterday by markit. Right on schedule. Same for China. By March greater weakness in global economies will be noticeable and by the summer we could see gdp contraction around the world, given a 9 month lag for money measures. The consensus view is of a strong and getting stronger economy both in the US and around the world making securities markets very vulnerable. Poised for a shock.

 

What "exigent circumstances" might lead to, I do not know. But given Watt's stance, one possibility might be administrative action. And I am trying hard not to be biased.

[DocSnowball]

A question for the legal experts here - What does the Supreme Court decision really mean to the legal question that was asked - that it agrees with the lower courts that FHFA can do whatever it wants per HERA? Does it also mean that legally the companies have not paid down a cent of the original bailout amounts yet to Treasury?

 

Feels like I got the legalities completely wrong here...or at least so far. Thanks in advance for sharing your thoughts, much appreciated

[investorG]

Supreme Court denied hearing.  ::)

Does this mean Perry case is officially dead, and the only legal pathway forward is the Sweeney case?

 

to the lawyers on the board:  although they are longshots in their own right, would the other outstanding cases in the 3 appeals courts + rop/bhatti be hurt by this supreme court ruling (ie is it viewed as a 'blessing' of the dc ruling)?  thank you.

 

muscleman, i think it's sweeney (which is years away from any potential positive outcome), delaware appeal, and maybe some pennies from the lamberth remand as remaining legal options. plus the longshot perry look-a-like suits mentioned above sprinkled around the country.

 

a denial of cert does not touch the merits.  if a circuit wanted to rule for Ps (big if) then it would know that its case conflicting with  perry would result in a likely grant of cert by scotus.  but generally other circuits are inclined to say hey this is an administrative law case, i'll just decide the way the dc circuit decided cause they handle more such cases

 

thank you.

 

one more, please:  will the collins appeal (new Orleans), saxton appeal (st louis), and rop lower court case have oral arguments like robinson appeal (failed), Roberts appeal (Chicago, pending), and Bhatti lower court cases have had?

[investorG]

A question for the legal experts here - What does the Supreme Court decision really mean to the legal question that was asked - that it agrees with the lower courts that FHFA can do whatever it wants per HERA? Does it also mean that legally the companies have not paid down a cent of the original bailout amounts yet to Treasury?

 

Feels like I got the legalities completely wrong here...or at least so far. Thanks in advance for sharing your thoughts, much appreciated

 

not a lawyer but it was addressed that the SC choice to not hear the case doesn't validate the lower court rulings, they are separate.  and yes at this moment the original bailout amounts are intact.

[Eye4Valu]

It just means they decided not to hear the case, so the appellate court opinion stands. Nothing more, nothing less.

[Guest cherzeca]

Supreme Court denied hearing.  ::)

Does this mean Perry case is officially dead, and the only legal pathway forward is the Sweeney case?

 

to the lawyers on the board:  although they are longshots in their own right, would the other outstanding cases in the 3 appeals courts + rop/bhatti be hurt by this supreme court ruling (ie is it viewed as a 'blessing' of the dc ruling)?  thank you.

 

muscleman, i think it's sweeney (which is years away from any potential positive outcome), delaware appeal, and maybe some pennies from the lamberth remand as remaining legal options. plus the longshot perry look-a-like suits mentioned above sprinkled around the country.

 

a denial of cert does not touch the merits.  if a circuit wanted to rule for Ps (big if) then it would know that its case conflicting with  perry would result in a likely grant of cert by scotus.  but generally other circuits are inclined to say hey this is an administrative law case, i'll just decide the way the dc circuit decided cause they handle more such cases

 

thank you.

 

one more, please:  will the collins appeal (new Orleans), saxton appeal (st louis), and rop lower court case have oral arguments like robinson appeal (failed), Roberts appeal (Chicago, pending), and Bhatti lower court cases have had?

 

hard to tell.  usually if a judge schedules oral arg quickly, like schlitz in bhatti, that usually means he wants to delve into the claims. in schlitz's case, oral arg lasted almost the entire day

[rros]

Good summary of where we stand.

http://www.washingtonexaminer.com/rising-drumbeat-for-trump-to-deal-with-fannie-and-freddie-himself/article/2649809