NEW YORK, NY / ACCESSWIRE / June 12, 2017 / Traders News Source, a leading independent equity research and corporate access firm focused on small and mid-cap public companies is issuing a comprehensive report with no obligation on Federal National Mortgage Association (OTCQB: FNMA), also known as Fannie Mae. The rapid deterioration of the housing market in 2008 significantly affected the company's financial condition and left it unable to fulfill its mission without government intervention. Therefore, on September 6, 2008, the Federal Housing Finance Authority (FHFA) placed Fannie Mae into conservatorship. As conservator, the FHFA holds all rights, titles, powers, and privileges of the company, and of any shareholder, officer, or director with respect to the company and its assets.
As conservator, the FHFA entered Fannie Mae into a senior preferred stock purchase agreement (SPSPA) with the U.S. Treasury. In exchange for proceeds of $116.1 billion, the Treasury received one million shares of Variable Liquidation Preference Senior Preferred Stock, Series 2008-2 and a warrant to purchase (for a nominal price) shares of common stock equal to 79.9 percent of the total number of Fannie Mae's common shares on a fully diluted basis.
Where do FNMA shareholders stand, Q1 financial review in our full report READ MORE
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FNMA pays the US Treasury a quarterly dividend; specifically, the quarterly dividend is equal to the amount by which the company's net worth exceeds a reserve amount ($600 million in 2017, $0 as of January 1, 2018). This dividend payment is also known as the net worth sweep.
The SPSPA, especially the net worth sweep provision, transfers essentially all profits and significant shareholder value to the U.S. Treasury. While the government has argued that this is necessary to ensure that taxpayers receive a fair return on their investment, subordinated shareholders have challenged the net worth sweep in court.
The court challenges by shareholders will continue. At issue is the governments complete control over FNMA and its inability to pay a dividend to shareholders other than the US Treasury.
When might the FNMA issue be resolved and what does the Trump team think READ MORE
Copy and paste to your browser may be required to view the report - http://tradersnewssource.com/fannie-mae/
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