October 2018

Monday October 15 2018

New filing in Fannie/Freddie Consolidated Class Action, click here to view.

Peter Chapman writes, “Judge Lamberth placed his stamp of approval on the parties’ scheduling request.  FHFA, Fannie and Freddie’s answers to the litigating shareholders’ complaints are due by Dec. 11, 2018.”

American Banker: An uncompromising Jeb Hensarling is not sorry

Benzinga: C-Suite Shakeups Could Change The Course Of Fannie And Freddie’s Conservatorship

Wall Street Journal: Fannie Mae’s Comeback Captain Reflects on His Tenure

Friday October 12 2018

New filing in Jacobs vs. FHFA, click here to view.

Peter Chapman writes, “In a letter dated October 10, a copy of which is attached to this e-mail message, Messrs. Jacobs and Hindes tell the Third Circuit Judge Lamberth is confused about the applicability of Delaware and Virginia corporate law to the GSEs.  Fannie and Freddie’s charters specify the terms and conditions for issuing preferred stock (e.g., consideration, conditions precedent, vesting) and declarations of discretionary dividends, but applicable state law dictate the rights, powers, and preferences of the preferred stock itself, including mandatory dividends.  And, Messrs. Jacobs and Hindes add, of course Judge Lamberth couldn’t find any case law on this issue; “There is no directly analogous case because the Net Worth Sweep is an absurdity without precedent,” they say.”

New updates in Fairholme vs. U.S.

Peter Chapman writes, “At page 22 (PDF page 45) of its amended omnibus motion to dismiss (Doc. 421) filed in Fairholme v. U.S. on Oct. 1, 2018, the government provides Judge Sweeney with a long list of cases saying Fannie, Freddie and FHFA are not government actors.  As you’ve likely read in the past couple of weeks, that uniform holding was disrupted by a decision in a foreclosure-related lawsuit in Rhode Island in August.

FHFA wants the U.S. Court of Appeals for the First Circuit to review a recent decision by the Honorable John J. McConnell, Jr., in Sisti v. FHFA, ___ F. Supp. 3d ___, 2018 WL 3655578, slip op. https://ecf.rid.uscourts.gov/cgi-bin/show_public_doc?2017cv0005-39 (D. R.I. Aug. 2, 2018), holding that FHFA is a government actor for purposes of evaluating due process rights and claims under the Fifth Amendment of the U.S. Constitution.  Judge McConnell concluded that Fannie Mae, Freddie Mac and FHFA can be found to be government actors for purposes of a due process claim.  Judge McConnell’s analysis and conclusion differs from dozens of other court rulings saying the opposite.

FHFA says immediate appellate review of Judge McConnell’s decision is appropriate because (i) it involves a controlling question of law, (ii) there is substantial ground for difference of opinion, and (iii) an immediate appeal from the order could materially advance the ultimate termination of the litigation.

Opposing FHFA’s request for immediate review of Judge McConnell’s analysis of the law at this early juncture, Mmes. Sisti and Boss say FHFA’s appeal should occur after a trial.  Mmes. Sisti and Boss argue they shouldn’t be forced to engage in burdensome piecemeal litigation.

In a reply filed today, FHFA counters that the question about whether or not the housing finance trio are government actors is a purely legal question, therefore militating in favor of immediate certification to and review by the First Circuit prior to a trial in the District Court.

Thursday October 11 2018

New filing in Cacciapalle vs. U.S., click here to view.

Peter Chapman writes, “Judge Sweeney entered an order today directing that the litigating shareholders’ responses to the government’s omnibus motion to dismiss are due Nov. 2, 2018, and the government has until Feb. 1, 2019, to file its reply. A similar order was entered in each of the cases before Judge Sweeney that contests the Net Worth Sweep.”

New filing in Fannie/Freddie Consolidated Class Action, click here to view.

Peter Chapman writes, “The parties presented a stipulation to Judge Lamberth this afternoon asking him to set Dec. 11, 2018, as the deadline for FHFA, Fannie and Freddie to answer the litigating shareholders’ amended complaints.  The parties advise Judge Lamberth that they intend to meet and confer on Oct. 15, 2018.”

New filing in Fairholme vs. U.S., click here to view.

Peter Chapman writes, “Two lawyers from Boise Schiller Flexner requested access to non-public discovery materials.”

National Legal and Policy Center: Until Mel Watt Resigns, There’s a Cloud Over FHFA

Wednesday October 10 2018

The New Republic: When the Next Recession Hits

Bill Maloni’s GSE Blog: The President’s in a fog and many of us are sad for other reasons

Tuesday October 9 2018

Wall Street Journal: Fannie Mae Names Hugh R. Frater as Interim CEO

Reuters: MOVES-Fannie Mae names Hugh Frater as interim CEO

Bloomberg: Fannie Mae Board Member Frater Selected to Serve as Interim CEO

Market Watch: Fannie Mae appoints interim CEO

Townhall: Why the Investigation of Mel Watt Is Justified

DS News: Is the Housing Market Prepared for the Next Crisis?

Yahoo! News: The housing market is peaking

Monday October 8 2018

Stanford Business: Ten Years after the Financial Meltdown: What Have We Learned?

Friday October 5 2018

New filing in Cacciapalle vs. U.S., click here to view.

Peter Chapman writes, “The Cacciapalle Plaintiffs need ten additional days to respond to the government’s omnibus motion to dismiss and ask Judge Sweeney to modify the current briefing schedule so that responses will be due Nov. 2, 2018, and the government’s reply will be due by Feb. 1, 2019.  Hamish Hume tells Judge Sweeney he doesn’t have enough time on his calendar to do what’s necessary by the current deadlines, and that all of the parties have agreed to the change.”

Seeking Alpha: Fannie Mae, Freddie Mac, Investor Sentiment And The Housing Market

Thursday October 4 2018

New filing in Jacobs vs. FHFA, click here to view.

Peter Chapman writes, “FHFA delivered a copy of Judge Lamberth’s opinion entered Sept. 28, 2018, to the Third Circuit yesterday. FHFA urges the Third Circuit panel to similarly reject Messrs. Jacobs and Hindes’ claims based on Delaware and Virginia corporate law.”

New filing in Angel vs. Fannie Mae, click here to view.

Peter Chapman writes, “FHFA, Fannie and Freddie sought and obtained a 14-day extension to file their reply in support of their motion to dismiss Mr. Angel’s complaint in order to assess and address Jugde Lamberth’s Sept. 28 opinion.  FHFA and the GSEs’ reply is due by Oct. 14, 2018. ”

Novogradac & Co.: FHFA Revises Fannie Mae, Freddie Mac Duty to Serve Plan, Invites Comments

 DS News: FHFA Seeks Input on Fannie’s Underserved Markets Plans

Wednesday October 3 2018

New filing in Fairholme vs. U.S., click here to view.

Peter Chapman writes, “A redacted version of Fairholme’s Second Amended Complaint was filed yesterday morning. The redactions concern the GSEs reversals of their overestimated losses on the eve of the Net Worth Sweep and appear in paragraphs 98, 100, 107, and 133.”

New filing in Wazee vs. FHFA, click here to view.

Peter Chapman writes, “The Honorable Nitza I. Quinones Alejandro placed her stamp of approval on a stipulation among the Wazee Plaintiffs, FHFA and Treasury establishing a briefing schedule for FHFA and Treasury’s motions to dismiss and the Wazee Plaintiffs’ cross-motion for summary judgment that will be completed by Feb. 8, 2019”

New filing in Rop vs. FHFA, click here to view.

Peter Chapman writes, “FHFA delivered two documents to Judge Maloney yesterday, telling him:

(A) the portion of the Collins decision saying that FHFA’s structure is unconstitutional is wrong; and

(B) Judge Schiltz reached the correct conclusion in Bhatti v. FHFA.

Benzinga: Fannie And Freddie Investors Find A Silver Lining Amid Claim Dismissals

Seeking Alpha: Past Motion To Dismiss! GSE Implied Covenant Claims Move Forward

Value Walk: Major Fannie Mae Net Sweep Ruling – But What Does It Mean For Shareholders?

Winston-Salem Journal: Our view: Mel Watt’s disappointing behavior

Tuesday October 2 2018

New filing in Fairholme vs. U.S., click here to view.

Peter Chapman writes, “The government filed its omnibus motion to dismiss in the U.S. Court of Federal Claims.”

Investors Unite: On Second Thought, Lamberth Agrees GSE Shareholders Can Still Press Claims

American Banker: Inside Mel Watt’s #MeToo moment (Podcast)

Forbes: The Economic Disaster of 2008: Why It Can Happen Again

American Enterprise Institute: National Housing Market Indicators release for Q2 2018

The M Report: The Strength of the Housing Market

Bill Maloni’s GSE Blog: Yay Lamberth, Giggles for French Hill???

Monday October 1 2018

New filing in Fannie, Freddie Consolidated Class Action, click here to view.

Peter Chapman writes, “Judge Lamberth released a memorandum opinion this afternoon dismissing shareholders’ claims for 1) Breach of contract 2) Breach of fiduciary duty 3) Violation of Delaware and Virginia law; and ruling that shareholders’ claims for breach of the implied covenant of good faith and fair dealing survive and will go to trial.

New filing in Rop vs FHFA, click here to view.

Peter Chapman writes, “Treasury responded to the Rop Plaintiffs’ submission concerning the Fifth Circuit Collins decision today, making it clear to Judge Maloney that whether FHFA is or isn’t constitutionally structured makes no difference and is not a basis for invalidating the Net Worth Sweep.” Click here to view.

Peter Chapman writes, “Rop plaintiffs supplied Judge Maloney a copy of the Fifth Circuit’s decision [on September 25] saying that decision strongly supports Counts I and II of their complaint pending in the Western District of Michigan.  Click here to view.

New filing in Rafter vs U.S., click here to view.

Peter Chapman writes, “The Rafter Plaintiffs advised Judge Sweeney [September 21] that Roman Asudulayev at Joseph Hage Aaronson LLC has joined their legal team.”

New filings in Bhatti vs. FHFA, click here to view.

Peter Chapman writes, “Treasury and FHFA sought and obtained an additional 30 days to file their responsive briefs with the Eight Circuit.”

The Times of Northwest Indiana: Finding a fix for Fannie and Freddie

American Action Forum: The FHFA And The Future Of Housing Finance Reform

Bloomberg: Fannie, Freddie Investors Maintain Hope in Net Sweep Lawsuit

Law 360: Fannie, Freddie, Feds Can’t Slip 3 ‘Net Worth Sweep’ Suits

Politico: Watt denies sexual harassment charge, defends refusal to aid probe

National Mortgage Professional: FHFA’s Watt Pushes Back on Harassment Charges