$FNMA #FANNIEGATE

15-00708-0036 The Delaware Shareholders delivered a letter to Judge Sleet yesterday to alert him that the U.S. Court of Appeals for the Ninth Circuit published an opinion late last month saying that Fannie and Freddie are private companies, not federal instrumentalities, and that the conservatorship placed FHFA "in the shoes of Fannie Mae and Freddie Mac, and gives the FHFA their rights and duties, not the other way around."

"This holding," the Delaware Shareholders say, is contrary to Treasury and FHFA's arguments that federal law, not state law, governs the conservator's power to implement the Net Worth Sweep as a term of preferred stock, and that FHFA has authority under HERA to act as it sees fit without regard to whether Fannie Mae and Freddie Mac themselves have power under state law to issue preferred stock having the terms of the Net Worth Sweep.

A copy of the letter (annexing the 9th Circuit opinion) is attached to this e-mail message.