Although most housing advocates applauded the Supreme Court’s Collins decision, shareholders argue the justices ignored key points. Nevertheless, legal experts say there’s little chance the plaintiffs will prevail when the case returns to circuit court.
Craig Phillips, senior counselor to Treasury Secretary Steven Mnuchin, recounts the Trump administration’s difficulties in ending the net worth sweep and the conservatorships.
Variation margins will reduce counterparty risk in to-be-announced MBS transactions by requiring buyers and sellers to post margins for any change in prices before settlement.
A district court in Louisiana granted a motion to dismiss claims against some defendants in an antitrust case involving bonds issued by Fannie Mae and Freddie Mac.
Anxiety builds over when and what the Supreme Court rules on the constitutionality of FHFA and whether investors should be recompensed for the net worth sweep.
Justice Breyer characterized the net worth sweep as the nationalization of the GSEs. The government and the court-appointed amicus curiae disagreed, describing it as a simple renegotiation of a contract.
The Fifth Circuit found FHFA’s structure unconstitutional but decided the remedy was to simply toss the structure and leave the net worth sweep standing. The Supreme Court will now grapple with the two issues.
The new rule provides clarity about how much and what kind of capital Fannie and Freddie will need in order to exit conservatorships. But the likelihood of that kind of capital raise seems remote.
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