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

[merkhet]

Two new motions:

 

Joint Motion to Modify Discovery Schedule:

https://www.dropbox.com/s/st8d9lipwy2gx0b/2015-07-08%20Joint%20Motion%20to%20Modify%20Discovery%20Schedule.pdf?dl=0

 

Plaintiffs' Unopposed Motion for an Enlargement of Time to Respond to Motion to Dismiss:

https://www.dropbox.com/s/a4zpw3cxempsozu/2015-07-08%20Plaintiffs%27%20Motion%20for%20an%20Enlargement%20of%20Time%20on%20Response%20to%20Motion%20to%20Dismiss.pdf?dl=0

[merkhet]

So the two parties have agreed to move the discovery deadline from June 29th, 2015 until September 4th, 2015. (I don't see why Sweeney wouldn't approve a joint motion like this.) The government is also set to hand over the final privilege logs this Friday, July 10th, 2015. The movement of the deadline seems to make sense because Fairholme has indicated that it has outstanding subpoenas to depose former Government officials and third-party witnesses.

 

Additionally, Fairholme was able to file an unopposed motion to get an enlargement of time to respond to the government's motion to dismiss until August 10th, 2015. This also makes sense because of the fact that the court is currently considering a stay on the motion, which, if approved, would obviate the need to respond to the motion to dismiss.

 

Also, it sounds like the decision to postpone the status conference set for yesterday came from Sweeney rather than from the parties, which is unfortunate.

[mateo999]

I apologize for asking such a basic question, and one that's likely been discussed somewhere in the hundreds of thread pages.  The 8.25% prefs are obviously non-cumulative.  But should the NWS be recouped, what claim, if any, do pref holders have for past missed dividends?  Should we expect this to be a separate legal battle should the NWS be overturned?

[Mephistopheles]

I apologize for asking such a basic question, and one that's likely been discussed somewhere in the hundreds of thread pages.  The 8.25% prefs are obviously non-cumulative.  But should the NWS be recouped, what claim, if any, do pref holders have for past missed dividends?  Should we expect this to be a separate legal battle should the NWS be overturned?

 

The conservatorship by law suspends dividends except for the senior preferred, with or without the sweep. So imo, it's not a valid legal argument. And no problem, I actually asked this question last year. :)

 

I have a related question regarding the junior preferred dividends. The 8.25% prefs are obviously selling for a premium to the variable rate ones. I know holders of these are banking on them selling above par if we win.

 

So my question is, have you thought about the chances of them being called in this case? This would make the variable ones a better deal. I assume that they'd want to call the high rate ones asap. Or do you think because of capitalization concerns, they may hold off on calling, which would make the fixed rated ones a better deal?

[merkhet]

My guess is that because of the capitalization concerns, they'd likely just convert the preferred shares to common shares -- but that's just a guess.

 

Government still has to respond to a raft of motions to unseal various documents next week on July 13th & July 16th. And I might be missing some additional dates, but those are the important ones in my mind. This is what will keep the pressure on the government.

 

I hope that settlement is on the table at this point, but it's hard to tell. If I were one of the hedge funds (or Fairholme) running the legal show right now, I'd probably be tempted to make a good deal now so that I can reinvest those funds into a market that is shaking loose some bargains. The question is whether the government is ready to come to the table.

[merkhet]

Sweeney granted Fairholme's motion for an enlargement of time to deal with the motion to dismiss. (Pushed until August 10th, 2015).

 

Sweeney has also rescheduled the status conference.

 

A status conference shall be held in the above-captioned case on Thursday, August 13, 2015 at 1:00 p.m. EDT at the Howard T. Markey National Courts Building, located at 717 W. Madison Pl., NW, Washington, D.C., 20439. During the status conference, protected information will be discussed; therefore, these proceedings will be closed to the public. Only those counsel admitted to the protective order may participate in the hearing. Counsel shall file under seal a joint status report by no later than Tuesday, August 11, 2015 at 5:00 p.m. EDT providing the names of the attorneys who will be participating in the status conference, as well as an agenda outlining issues to be addressed during the status conference.

 

That's a long ways from now.

[mateo999]

I apologize for asking such a basic question, and one that's likely been discussed somewhere in the hundreds of thread pages.  The 8.25% prefs are obviously non-cumulative.  But should the NWS be recouped, what claim, if any, do pref holders have for past missed dividends?  Should we expect this to be a separate legal battle should the NWS be overturned?

 

The conservatorship by law suspends dividends except for the senior preferred, with or without the sweep. So imo, it's not a valid legal argument. And no problem, I actually asked this question last year. :)

 

I have a related question regarding the junior preferred dividends. The 8.25% prefs are obviously selling for a premium to the variable rate ones. I know holders of these are banking on them selling above par if we win.

 

So my question is, have you thought about the chances of them being called in this case? This would make the variable ones a better deal. I assume that they'd want to call the high rate ones asap. Or do you think because of capitalization concerns, they may hold off on calling, which would make the fixed rated ones a better deal?

 

Thanks very much.  Haven't gotten that granular in looking at the different preferred issues but hear what you're saying.  It's a good question.

[merkhet]

Matt McGill states that Perry Capital has not engaged in any settlement talks though they're open to the idea of a settlement.

 

[doughishere]

Just got done with the Investors Unite conference call. Epstein seemed awfully confident.

 

Link: https://investorsunite.org/iu-hosts-teleconference-to-provide-update-on-fannie-freddie-litigation/

[merkhet]

Just got done with the Investors Unite conference call. Epstein seemed awfully confident.

 

Link: https://investorsunite.org/iu-hosts-teleconference-to-provide-update-on-fannie-freddie-litigation/

 

Epstein always sounds confident.

[Mephistopheles]

Just got done with the Investors Unite conference call. Epstein seemed awfully confident.

 

Link: https://investorsunite.org/iu-hosts-teleconference-to-provide-update-on-fannie-freddie-litigation/

 

Epstein always sounds confident.

 

Haven't heard this call, but I remember on one of the previous ones he mentioned how even though Plaintiffs might be morally or even legally correct, the government still has a fair shot simply because Courts tend to give it too much deference. Seemed not too confident imo.

[doughishere]

Bove seems confident. Says settlement in 2016

 

 

http://www.valuewalk.com/2015/07/richard-x-bove-critical-periods-in-fannie-maes-history/

[doughishere]

Just got done with the Investors Unite conference call. Epstein seemed awfully confident.

 

Link: https://investorsunite.org/iu-hosts-teleconference-to-provide-update-on-fannie-freddie-litigation/

The

Epstein always sounds confident.

 

haven't heard this call, but I remember on one of the previous ones he mentioned how even though Plaintiffs might be morally or even legally correct, the government still has a fair shot simply because Courts tend to give it too much deference. Seemed not too confident imo.

 

He also noted what you said...if you have a 100% seals case against the govt it's only 50% winnable

 

Sorry I'm doing this from my phone

H

 

[Mephistopheles]

Just got done with the Investors Unite conference call. Epstein seemed awfully confident.

 

Link: https://investorsunite.org/iu-hosts-teleconference-to-provide-update-on-fannie-freddie-litigation/

The

Epstein always sounds confident.

 

haven't heard this call, but I remember on one of the previous ones he mentioned how even though Plaintiffs might be morally or even legally correct, the government still has a fair shot simply because Courts tend to give it too much deference. Seemed not too confident imo.

 

He also noted what you said...if you have a 100% seals case against the govt it's only 50% winnable

 

Sorry I'm doing this from my phone

H

 

 

Yep that's what I was referring to..so I think him becoming more confident than that, is a great sign

[merkhet]

Epstein didn't seem any more or less confident to me from previous times I've listened to him talk.

[Luke 532]

http://www.marketwatch.com/story/maxine-waters-we-are-a-long-way-from-fannie-freddie-reform-2015-07-09

 

Maxine Waters: "Of course, Fannie and Freddie look pretty good. Not only have they been performing well, but they have paid back all of the money to the Treasury and they continue to earn money. So that makes them look very, very good."

[Luke 532]

Sweeney grants more time for depositions and discovery (until September 4th).

http://gselinks.com/Court_Filings/Fairholme/13-465-0193.pdf

[colinwalt]

Don't think these links were posted:

 

PERRY CAPITAL LLC, for and on behalf of investment funds for which it acts as

investment advisor - BRIEF AMICI CURIAE OF TIMOTHY HOWARD AND THE COALITION

FOR MORTGAGE SECURITY IN SUPPORT OF APPELLANTS

 

http://www.valueplays.net/wp-content/uploads/TIMOTHY-HOWARD-AND-THE-COALITION-FOR-MORTGAGE-SECURITY.pdf

 

Found that linked from this (Glen Bradford):

 

http://seekingalpha.com/article/3311175-involving-securities-law-professionals-with-gse-lawsuits-amplifies-scrutiny

[merkhet]

http://gselinks.com/Court_Filings/Cacciapalle/13-466-0059.pdf

 

Plaintiffs' lawyers granted access to discovery (and most importantly, depositions) for various cases.

[Luke 532]

Larry Kudlow to run Fannie-Gate next week on his radio program. :)  Check his Twitter feed.

[merkhet]

Full docket text for document 186: **SEALED** ORDER granting limited relief as to [162]. Signed by Judge Margaret M. Sweeney. (ta) Copy to parties.

 

Document #162 was the motion for unsealing the DeMarco & Ugoletti depositions.

 

I'm now 100% confident that the Sweeney order above was, at the very least, a motion that allowed for the plaintiffs to file the DeMarco & Ugoletti depositions under seal in the Perry appeal.

 

http://gselinks.com/Court_Filings/Cacciapalle/13-466-0059.pdf

 

Plaintiffs' lawyers granted access to discovery (and most importantly, depositions) for various cases.

 

This is because Sweeney authorized plaintiffs' attorneys in other courts to also access the discovery files under the Protective Order -- so it would be irrational for her not to allow the plaintiffs in the Perry appeal to also access the discovery files.

[Luke 532]

Full docket text for document 186: **SEALED** ORDER granting limited relief as to [162]. Signed by Judge Margaret M. Sweeney. (ta) Copy to parties.

 

Document #162 was the motion for unsealing the DeMarco & Ugoletti depositions.

 

I'm now 100% confident that the Sweeney order above was, at the very least, a motion that allowed for the plaintiffs to file the DeMarco & Ugoletti depositions under seal in the Perry appeal.

 

http://gselinks.com/Court_Filings/Cacciapalle/13-466-0059.pdf

 

Plaintiffs' lawyers granted access to discovery (and most importantly, depositions) for various cases.

 

This is because Sweeney authorized plaintiffs' attorneys in other courts to also access the discovery files under the Protective Order -- so it would be irrational for her not to allow the plaintiffs in the Perry appeal to also access the discovery files.

 

Merkhet, thank you for your continued contributions to the board!  This is good stuff.

[doughishere]

With all the fuss over the  DeMarco & Ugoletti depositions i'd kinda like to see them now.

[merkhet]

I would not. If they come out, the government loses any incentive to settle. At that point, they might as well roll the dice and see if they are vindicated through the legal system.

[Mephistopheles]

I would not. If they come out, the government loses any incentive to settle. At that point, they might as well roll the dice and see if they are vindicated through the legal system.

 

If they don't come out, why does the government have an incentive to settle? I assume you mean the risk of them being released in the future would be the incentive. If the judge doesn't allow them to be made public, wouldn't that be the end of the story of them being released, at least for long enough that it wouldn't matter?