August 2018

Friday August 31 2018

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

Peter Chapman writes, “FHFA filed a rehearing petition in the Fifth Circuit yesterday asking a larger panel of judges to take another look at whether the Collins Plaintiffs have Article III standing to bring their separation-of-powers claim and whether FHFA’s structure violates Article II of the Constitution.”

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

Peter Chapman writes, “Judge Sweeney placed her stamp of approval on the parties’ request to delay briefing on class certification.”

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

Peter Chapman writes, “The government responded to Fairholme’s request. The government wants Judge Sweeney to bring an end to the filing of amended complaints and asks her to set Sept. 12 as that deadline.  The government says it will file a fresh omnibus motion to dismiss amended complaints filed on or before Sept. 12 by Oct. 1.  Fairholme, in turn, respond by Oct. 23, and the government will file its reply by Jan. 22.”

Thursday August 30 2018

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

Peter Chapman writes, “FHFA notified the Third Circuit about the Saxton decision in a letter dated yesterday.”

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

Peter Chapman writes, “The parties want Judge Sweeney to place her stamp of approval on their agreement to delay further briefing about class certification until after she’s ruled on the government’s omnibus motion to dismiss.”

Curbed: 10 years after the financial crisis, is the housing market still at risk?

Wall Street Journal: Banks Looking for Growth Not Helped by Housing

Wednesday August 29 2018

DS News: The Impact of Privatizing the GSEs

Tuesday August 28 2018

American Banker: GSE reform could increase costs to borrowers: CBO

Seeking Alpha: GSE Judges Aren’t Superheroes, But I Am

Scotsman Guide: Experts: GSEs serve vital role in multifamily

Monday August 27 2018

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

Peter Chapman writes, “The parties want Judge Lamberth to place his stamp of approval on their agreement to delay further briefing about class certification until after he’s on FHFA’s motion to dismiss.”

Courthouse News Service: Investors Lose Fight Over Fannie, Freddie Profits

Scotsman Guide: The GSEs dominate in multifamily, but for how long?

Bill Maloni’s GSE Blog: Stirring the ashes in the GSE world

Friday August 24 2018

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

Peter Chapman writes, “The Fifth Circuit granted the government’s request. The government’s response to the Collins Plaintiffs’ rehearing request is due Sept. 13, 2018. ”

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

Peter Chapman writes, “The Eight Circuit issued its opinion today that Saxton v. FHFA was properly dismissed.”

Breitbart: Hedge Funds Suffer Another Stinging Loss in Lawsuit Seeking Profits of Fannie and Freddie

Seeking Alpha: Fannie, Freddie falls after appeals court rejects investors’ argument

Mortgage Professional America: Congress should force Watt to testify on sexual harassment allegations, lawyer says

Housing Wire: Ex-FHFA employee files lawsuit against agency for $1 million

CNBC: The housing recovery isn’t over, it just feels like it is

Thursday August 23 2018

Politico: Watt accuser asks Congress to compel him to testify on harassment suit

The Financial: National Association of Realtors Commends FHFA Decision

Market Watch: Fannie, Freddie will stop backing single-family rentals

Wednesday August 22 2018

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

Peter Chapman writes, “Judge Sweeney entered a Third Amended Protective Order yesterday.”

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

Peter Chapman writes, “Oral argument before Circuit Judges Hardiman, Krause and Bibas in the Third Circuit will be held at at 9:00 a.m. on Friday, Sept. 7, in Philadelphia. The Court has asked the parties to be prepared to discuss this question at oral argument: Whether the amount of or other consequences to an award of compensatory damages (and restitution, if not considered equitable relief) could be deemed to “restrain or affect the exercise of powers or functions of the Agency as a conservator” and thus be barred by 12 U.S.C. sec. 4617(f) in a given case, and, if so, whether the allegations of the complaint establish that Appellants’ claims for compensatory damages and restitution would have that effect here.”

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

Peter Chapman writes, “FHFA and Treasury want 17 additional days to respond to the Collins Plaintiffs’ rehearing request, and hint they’re considering submitting a rehearing request by the Aug. 30 deadline to make that move.”

The Hill: Federal housing agency employee secretly recorded director’s sexual advances toward her: report

WRAL: North Carolina’s Watt, now at FHFA, accused of sexual harassment

Bloomberg: Fannie-Freddie Overseer Scraps Program for Rental-Home Investors

Reuters: U.S. ends government foray into Wall Street’s rental home bonds

National Mortgage News: FHFA halts program expanding GSEs’ role in rental market

Globest: FHFA Ends Fannie, Freddie’s Single-Family Rental Pilots

Housing Wire: Fannie Mae, Freddie Mac ending expansion into single-family rentals

Tuesday August 21 2018

A new lawsuit has been filed in the U.S. Court of Federal Claims, click here to view the complaint.

Peter Chapman writes, “Quinn Opportunities Master LP and Quinn Select Opportunities LP Series A, which own more than $119 million of junior preferred stock in the GSEs, filed a lawsuit in the U.S. Court of Federal Claims late last week. Paragraph 45 of the Quinn Complaint details that the GSEs were past the trough in their financial performance prior to the imposition of the Net Worth Sweep, and the complaint goes on to explain how the government nationalized the GSEs and expropriate stockholders’ interests in the Enterprises without just compensation.  Quinn is represented by Nancie G. Marzulla and Roger J. Marzulla at Marzulla Law, LLC, in Washington, D.C.”

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

Peter Chapman writes, “The Fifth Circuit has directed FHFA and Treasury to respond to the Collins Plaintiffs’ rehearing request by Aug. 27.”

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

Peter Chapman writes, “Judge Sweeney granted the government’s motion for more time to respond to Fairholme’s motion to amend its complaint.  The government has until Fri., Aug. 31, to file its response.”

Politico: Mel Watt sexual harassment accuser files federal pay discrimination suit

Bloomberg: Top U.S. Housing Regulator Denies Harassment Charge (Radio)

NPR: Federal Housing Agency Employee Secretly Taped Director’s Sexual Advances Toward Her

National Mortgage News: FHFA’s Watt fights harassment claims as accuser goes public

Housing Wire: Ex-FHFA employee speaks out on Mel Watt harassment charges

Pennsylvania Record: Class action lawsuit filed against Federal Housing Finance Agency and Treasury Department

Monday August 20 2018

A new lawsuit has been filed in the U.S. Court of Claims, click here to view the complaint.

Peter Chapman writes, “Perry Capital LLC, which owns both junior preferred stock and common shares in the GSEs, filed a lawsuit in the U.S. Court of Claims.  “The Net Worth Sweep has resulted in a massive and unprecedented expropriation of private property,” Perry tells Judge Sweeney.  “To the extent this ongoing expropriation is authorized by law, the Fifth Amendment compels the government to pay just compensation to Plaintiff and the Companies for the taking.  To the extent it is not authorized, the Fifth Amendment compels the government to pay damages to Plaintiff and the Companies for the illegal exaction.  Indeed, in addition to exceeding FHFA’s powers under statute, FHFA itself is . . . unconstitutional.  The extraordinary control exercised by FHFA as conservator over Fannie and Freddie also created a fiduciary relationship between FHFA, on the one hand, and the Companies and their shareholders, on the other.  The Net Worth Sweep violated FHFA’s fiduciary duties.  The Net Worth Sweep also breached implied-in-fact contracts the government and the Companies entered into when the Companies were placed into conservatorship.  Accordingly, Plaintiff and the Companies are entitled to just compensation and damages.”  Perry Capital is represented by the same team of lawyers led by Matthew D. McGill at Gibson, Dunn & Crutcher LLP representing it before Judge Lamberth.”

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

Peter Chapman writes, “The Cacciapalle Plaintiffs delivered a request to Judge Sweeney asking her to certify their lawsuit pending in the U.S. Court of Federal Claims as a class action proceeding; identifying all holders of GSE junior preferred shares on Aug. 17, 2012, as the members of that class; and designating the law firms of Boies Schiller Flexner LLP and Kessler Topaz Meltzer & Check LLP as Co-Lead Class Counsel. A copy of the request and memorandum in support maybe be viewed here, and here.

A new class action lawsuit has been filed, Wazee vs. FHFA

Peter Chapman writes, “Wazee Street Opportunities Fund IV LP, Douglas Whitley, and Lisa Brown, owning more than 1.6 million shares of GSE common stock, filed a class action lawsuit Thursday, August 16, in the U.S. District Court for the Eastern District of Pennsylvania in Philadelphia.  Kessler Topaz and Boies Schiller represent the Wazee Plaintiffs’ counsel. The Wazee Plaintiffs define their class as all holders of GSE common stock on Aug. 17, 2012, and their successors in interest (meaning current shareholders). Click here to view the filing.

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

Peter Chapman writes, “The government says it needs 14 more days to respond to Fairholme’s motion to amend its complaint that added an illegal exaction claim.”

Class Plaintiffs’ in the Fannie and Freddie consolidated class action lawsuit have filed a corrected version of their motion for class certification today changing one of the lawyers’ names. This comes after Class Plaintiffs delivered a request to Judge Lamberth asking him to certify their lawsuit pending in the U.S. Court of Federal Claims as a class action proceeding; identifying all holders of GSE junior preferred shares and common stock on Aug. 17, 2012, as the members of that class; and designating the law firms of Boies Schiller Flexner LLP, Kessler Topaz Meltzer & Check LLP, Grant & Eisenhofer, P.A., and Bernstein Litowitz Berger & Grossmann LLP as Co-Lead Class Counsel.

A copy of the corrected motion for class certification can be viewed here.

A copy of the motion for class certification and memorandum of law in support can be viewed here.

New filing in Appaloosa vs. U.S.

Peter Chapman writes, “Appaloosa and other Jones Day clients filed second amended complaints in the U.S. Court of Federal Claims. The amended complaints amend their illegal exaction claims to include the theory that the imposition of the Net Worth Sweep was unauthorized because FHFA, according to the Fifth Circuit, was unconstitutionally structured. The filing can be viewed here.

Appaloosa and other Jones Day clients also ask Judge Sweeney to modify the briefing schedule in the U.S. Court of Federal Claims. The filing can be viewed here.

Appaloosa and other Jones Day clients suggest that the government file a standalone motion to dismiss their illegal exaction claims by Oct. 1, that the Jones Day clients respond by Oct. 23, and that the existing briefing schedule be preserved in all other respects.”

Seeking Alpha: Why Do People Own Fannie And Freddie?

Bloomberg: Defiant Mel Watt Fights Harassment Claims as Accuser Goes Public

American Action Forum: Eakinomics: Is Housing The Achilles Heel (Again)?

Wall Street Journal: U.S. Pursues One of the Biggest Mortgage-Fraud Probes Since the Financial Crisis

Housing Wire: Inside the scandal that could explode multifamily real estate

Bill Maloni’s GSE Blog: GSE Skeptics and Liars—need a fact-suppository, two, or more!

Friday August 17 2018

Wall Street Journal: How HUD Can Help the Housing Market

Thursday August 16 2018

National Law Review: All American Check Cashing seeks initial en banc hearing in Fifth Circuit

Wednesday August 15 2018

New filing in 683 Capital vs. U.S., click here to view.

Peter Chapman writes, “683 Capital amended its complaint pending before Judge Sweeney to add The Mangrove Partners Master Fund, Ltd., CVI Opportunities Fund I, LLLP, Capital Ventures International, CVI Opportunities Fund II, LLLP, G1 Execution Services, LLC, Susquehanna Securities, SAL Equity Trading, GP, and Susquehanna Financial Group, LLLP, as shareholder-plaintiffs.  683 Capital adds eighth and tenth counts to its complaint alleging a breach and anticipatory repudiation of the GSEs’ contracts with their common shareholders as well as ninth and eleventh counts claiming a breach of the implied covenant of good faith and fair dealing with the GSEs’ common shareholders.  683 Capital also mentions that FHFA’s structure violates Article II of the U.S. Constitution, making the Net Worth Sweep illegal.”

American Banker: How next FHFA chief can reform Fannie, Freddie without Congress’ help

Monday August 13 2018

Bill Maloni’s GSE Blog: Are things looking Up? Mostly Fannie and Freddie…and very little Trump

Benzinga: Fannie, Freddie’s Fate Could Rest On Potential Trump Nominee

Politico: Housing finance system roiled by maze of investigations: Here’s a guide

Housing Wire: Fannie Mae CEO in hot water months before he steps down

Friday August 10 2018

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

Peter Chapman writes, “Judge Sweeney granted the Jones Day client’s request to amend the protective order in Fairholme v. U.S.”

A new lawsuit has been filed, Cyrus vs. U.S.

Peter Chapman writes, “CRS Master Fund, L.P., Cyrus Opportunities Master Fund II, Ltd., Cyrus Select Opportunities Master Fund, Ltd., and Crescent 1, L.P., owning more than $230 million of junior preferred stock at the time the Net Worth Sweep was imposed, filed a lawsuit in the U.S. Court of Claims.  “At the time of purchase, Cyrus had no reasonable ground to expect that, while the Companies were in conservatorship, the United States instead would expropriate its investment and force shareholders into years of litigation to recoup their investments,” Cyrus tells Judge Sweeney in its complaint modeled on Owl Creek’s.  Cyrus is represented by a team of lawyers led by Bruce S. Bennett at Jones Day.” Click here to view the court filing.

Guru Focus: The Fate of Fannie and Freddie

Politico: Romantic relationship triggers second rebuke for Fannie Mae CEO

Thursday August 9 2018

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

Peter Chapman writes, “Owl Creek, Appaloosa, Akanthos, CSS, and Mason Capital want Judge Sweeney to enter a Third Amended Protective Order that will include them in the definition of “Parties” to ensure that Protected Information is treated consistently among all of related cases through the filing of Mason Capital’s complaint.  The government does not object to this request. You’ll recall — see Doc. 400 filed Feb. 27, 2018 — that the Jones Day lawyers representing these shareholders have access to all sealed discovery documents.”

Seeking Alpha: Differences Between FHFA’s Rule And Moelis GSE Blueprint Are Minor

American Banker: House panel plans FHFA oversight hearing, invites Watt to testify

Wednesday August 8 2018

A new lawsuit has been filed, Highfields vs. U.S.

Peter Chapman writes, “Three Highfields Capital partnerships, which own both junior preferred and common shares in both GSEs, filed a lawsuit in the U.S. Court of Federal Claims yesterday. At pages 29-31, Highfields raises a “breach of implied-in-fact contract between the United States and the enterprises” that I don’t believe we’ve seen previously.  Highlands is represented by Mark T. Stancil at Robbins, Russell, Englert, Orseck, Untereiner & Sauber LLP in Washington, D.C., and now we know why Ms. Chase Carpino ordered a copy of the transcript in Bhatti v. FHFA before Judge Schiltz.” Click here to view the complaint.

National Mortgage News: What FHFA scandals mean for agency’s future, GSE reform

American Banker: Fannie, Freddie could need $78B in crisis: FHFA

Housing Wire: Fannie, Freddie stress test results improve significantly from last year

The M Report: Testing the GSEs’ Performance in Adverse Conditions

Tuesday August 7 2018

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

Peter Chapman writes, “The Collins Plaintiffs have asked the Fifth Circuit for a larger number of judges to review the three-judge panel’s decision finding that FHFA is unconstitutionally structured and upholding the Net Worth Sweep.”

Housing Wire: FHFA caves to industry requests, extends comment period for proposed GSE capital rule

Monday August 6 2018

Bill Maloni’s GSE Blog: They Lied about Fannie and Freddie and the two prevailed despite the propaganda–could it be the excellent business model?

American Banker: The crisis isn’t over

Housing Wire: FHFA watchdog faces investigation for misconduct

Friday August 3 2018

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

Peter Chapman writes, “Fairholme filed a motion to amend its complaint pending in the U.S. Court of Federal Claims today. Fairholme wants to amend its illegal exaction claims to include the theory that the imposition of the Net Worth Sweep and quarterly Net Worth Sweep dividend payments were unauthorized because at all relevant times FHFA has, as the Fifth Circuit recently held, been operating in violation of constitutional separation of powers principles.  Fairholme notes that the Wazee Plaintiffs’ complaint raises this claim.  Fairholme tells Judge Sweeney the government opposes this request.”

DS News: Fannie Mae Earnings Increase in Q2

Housing Wire: Fannie Mae reports income of $4.5B in Q2

The M Report: Solid Fundamentals Drive Fannie Mae’s Q2 Growth

Mortgage News Daily: Fannie and Freddie Extend Strong Earning Streak

Politico: Investigating the investigator: Fannie-Freddie watchdog under scrutiny

Thursday August 2 2018

A class action lawsuit has been filed, Wazee vs. U.S. Click here to view the filing.

Peter Chapman writes, “Wazee Street Opportunities Fund IV LP, which owns about 1.6 million shares of common stock in Fannie Mae, filed a class action lawsuit in the U.S. Court of Federal Claims yesterday. The Wazee Plaintiffs are represented by Hamish P.M. Hume at Boies Schiller Flexner LLP, who also represents the Class Plaintiffs in the litigation pending before Judge Lamberth.”

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

Peter Chapman writes, “The government filed its omnibus motion to dismiss GSE shareholder cases pending before Judge Sweeney. The government says the lawsuits should be dismissed because Judge Sweeney lacks jurisdiction to entertain them for a variety of reasons we’ve mostly heard before.  At pages 46-47 (PDF pages 69-70) the government presses it’s distinction between GSE shareholders acquiring their interests before and after the Net Worth Sweep was imposed.  At page 58 (PDF page 81) the government explains that shareholders’ lawsuits pending before Judge Lamberth demonstrate that the government didn’t take or appropriate shareholders’ contractual rights.  At page 80 (PDF page 103) the government says Washington Federal had a 30-day window in 2008 to challenge FHFA’s appointment as the GSEs’ conservator that closed long ago.”

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

Peter Chapman writes, “The Bhatti Plaintiffs filed their statement of issues in the Eighth Circuit yesterday.”

New filings in Saxton vs. FHFA

Peter Chapman writes, “The Saxton Plaintiffs notified the Eighth Circuit about the recent Collins decision and urges the Court to follow Judge Willet’s dissent.  FHFA thinks that’s a very bad idea.” View the plaintiffs’ notification here, and FHFA’s response here.

Fannie Mae: Fannie Mae Reports Net Income of $4.5 Billion and Comprehensive Income of $4.5 Billion for Second Quarter 2018

Markets Insider: Fannie Mae Reports Net Income of $4.5 Billion and Comprehensive Income of $4.5 Billion for Second Quarter 2018

Bloomberg: Berkowitz’s Fairholme Fund Reduces Fannie Mae-Freddie Mac Stakes

Guru Focus: Bruce Berkowitz Comments on Fannie Mae and Freddie Mac

Wednesday August 1 2018

Bill Maloni’s GSE Blog: Some GSE thoughts and a few Presidential ones….

Reuters: Freddie Mac’s second-quarter income rises vs. year ago

National Mortgage News: Freddie Mac posts ‘boring’ second quarter, and that’s OK, CEO says

DS News: Freddie Mac Announces Q2 Results

Scotsman Guide: Freddie posts solid Q2 earnings

American Banker: FHFA extends comment period on GSE capital proposal