Fannie Mae-No Politics (FNMA)

[rekcusdo]

"The boards of both GSEs had the opportunity to fight conservatorship and choose to declare insolvency. THEY chose conservatorship, instead. "
The board chose a conservatorship, which is within their right. But instead of a conservatorship, they got this quasi-conservator-receiver-takings-board substituted situation that we are in now. I would argue that the board did not get what they bargained for.

"The government has had the opportunity to put the GSEs in receivership.They chose to maintain conservatorship, instead."

The government could have placed the company into recievership, but it would be ignorant to believe that they didnt do so as some favor to shareholders or America. They COULDNT put the GSEs into recievership for one reason and one reason only. If they did so, they would have destroyed the economy. If they'd enacted a recievership, all assets of the GSEs would have to be liquidated and paid to creditors and shareholders. There would be basically nothing for the Treasury because there would have been no bailout. All securities would need to be offloaded to other banks...and it is unlikely those banks could have maintained so many mortgages at the time of the crash. The government had no realistic plan to replace the GSEs. THAT is why there could be no recievership. And now that the GSEs are profitable and solvent, recievership is impossible as a matter of law.