Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Carlos Quote: "The outcome is that the Common Equity is held in escrow and no SPS remains outstanding." End of Quote
If NO SPS remains outstanding, why are we held in conservatorship?
Thanks Barron,
I don’t understand why the Plaintiffs haven’t changed the strategy by incorporating the Charter Act into the argument.
Paulson said it best himself, when he told the Financial Crisis Inquiry Commission, “[Fannie and Freddie], more than anyone, were the engine we needed to get through the problem.” Treasury needed Fannie and Freddie to help keep the financial system afloat, and it simply took them, under pretense of a rescue. (nationalized)
The Federal Reserve’s program purchased MBS issued by the GSEs. Putting aside toxic or not the Treasury / Federal Reserve freely admitted the GSE's were used to help prop up the housing market.
It’s been argued the GSEs did not purchase toxic securities, (worded toxic or not), will not void the fact the GSEs were used to funnel purchases made by the companies to the fed.
Evidence
From Board of Governors of the Federal Reserve System
95th Annual Report 2008
Quote: "since the November 25 announcement of the Federal Reserve’s program to purchase MBS issued by the housing GSEs and Ginnie Mae, and they currently stand at 5 percent." End of Quote page 19
Link: https://www.federalreserve.gov/boarddocs/rptcongress/annual08/pdf/AR08.pdf
Quote: "It's a big event that the Federal Reserve is offering to buy up nearly 10% of the agency mortgage market," said Art Frank, a mortgage strategist with Deutsche Bank Tuesday morning, the Federal Reserve announced that it would buy up to $500 billion of mortgage bonds guaranteed by Fannie, Freddie and Ginnie Mae, providing the ultimate support to prop up the $4.8 trillion market of these securities. The central bank also will buy $100 billion of the mortgage finance companies' debt securities, including that of the Federal Home Loan Bank, through reverse auctions starting next week. So far, other initiatives to prop up the market including a plan to have both the government-sponsored enterprises buy nearly $200 billion of these bonds and the U.S. Treasury's unlimited purchase of these bonds have done little to stop the weakening of risk premiums on mortgage bonds. As a result, mortgage rates have remained at elevated levels with little relief to consumers." End of Quote
Link: https://investorshub.advfn.com/boards/read_msg.aspx?message_id=33791597
Did DeMarco violate the law by implementing the Net Worth Sweep without public disclosure?
RULEMAKING & FEDERAL REGISTER
Rulemaking is the process we use to create regulations. It is designed to ensure the public is informed of proposed rules, has the opportunity to comment on them, and have access to the rulemaking record.
Rulemaking Process
Public Comment.
After publication in the Federal Register, a public comment period begins. Depending on the complexity of the rule, comment periods could be for 30 to 60 days, or even as much as 180 days.
https://www.fhfa.gov/SupervisionRegulation/RegulationFederalRegister
Thanks Barron,
Appreciate your efforts.
You asked, “ Has your top line argument been argued in any court.”
No, the expert lawyers never mention the Charter Act. I’m hoping Barron’s efforts will reach a Judge that will rule the SPSPA void. Barron has brought to our attention the statutes of limitations has not run out by reason of the letter agreement that modified the SPSPA.
Barron Quote:
“I posit that the variable liquidation preference outlined in the SPSPA and all amendments are an illegal commitment fee/charge attached to the purchase of the senior preferred shares. Prohibited by the Charter Act. The warrants are also a fee in consideration for access to the commitment. Prohibited by the Charter Act.
I posit that the senior preferred shares with their variable liquidation preference as outlined in the SPSPA constitute a new product for the purpose of the secondary mortgage market outlined in the charter act at sec 1719.
I posit that under the safety and soundness act as modified by HERA, the sale of SPS with a variable liquidation preference to Treasury under authority of sec 1719(g) of the Charter Act required notice in the federal register, opportunity for public comment, and official rule making by the plain language of the safety and soundness act.
I posit that the above statutory violations necessarily violate the warranties on behalf of the FHFA-C contained in the SPSPA.
301 Billion to be returned to the corporation. LP and warrants canceled. Future of 191 billion of taxpayer debt illegally given to corps to be determined.” End of Quote
https://www.freddiemac.com/investors/financials/pdf/2023er-2q23_release.pdf
The problem is not that the Treasury Swept the Net Worth of the companies. THE PROBLEM: The FHFA appointed CEOs failed by sending the NWS payments to the Treasury without the Pay Down of the Liquidation Preference applied.
WRITTEN AS CLEAR A DAY,
HERA Page 2732
These expert lawyers never mentioned the Charter Act!
The Senior Preferred Stock Purchase Agreement is not a law. The SPSPA is an illegal contract, The Charter Act is the Law.
A) issuance of additional shares or obligations
(B) reduce the financial obligations
Pay Down of the Treasury’s Liquidation Preference Permitted by HERA Page 2732
In essence allows the trustees of Fannie and Freddie to go to the market at any time to raise new capital, including new capital with lower dividend coupons, to buy back the Treasury’s senior preferred. Any loyal conservator of Fannie and Freddie would take advantage of this refinancing option to end the bailout arrangement, by paying off the senior preferred in full.
The FHFA appointed CEOs failed by sending the NWS payments to the Treasury without the terms of the Pay Down of the Liquidation Preference applied.
HOUSING AND ECONOMIC RECOVERY ACT OF 2008
Quote: “Page 2732
EXCEPTION.—Notwithstanding paragraph (1), the Director may permit a regulated entity, to the extent appropriate or applicable, to repurchase, redeem, retire, or otherwise acquire shares or ownership interests if the repurchase, redemption, retirement, or other acquisition— ‘‘(A) is made in connection with the issuance of additional shares or obligations of the regulated entity in at least an equivalent amount; and ‘‘(B) will reduce the financial obligations of the regulated entity or otherwise improve the financial condition of the entity.’’.
NOTE: REPURCHASE, REDEEM, RETIRE...
WILL REDUCE THE FINANCIAL OBLIGATIONS OF THE REGULATED ENTITY.
Link: https://www.congress.gov/110/plaws/publ289/PLAW-110publ289.pdf
HappyAlways Asked:
“ Rodney, noted that there is an "and" between (A) and (B). (A) is a bit confusing.”
(A) issuance of additional shares or obligations
(B) reduce the financial obligations
Pay Down of the Treasury’s Liquidation Preference Permitted by HERA Page 2732
In essence allows the trustees of Fannie and Freddie to go to the market at any time to raise new capital, including new capital with lower dividend coupons, to buy back the Treasury’s senior preferred. Any loyal conservator of Fannie and Freddie would take advantage of this refinancing option to end the bailout arrangement, by paying off the senior preferred in full.
The FHFA appointed CEOs failed by sending the NWS payments to the Treasury without the terms of the Pay Down of the Liquidation Preference applied.
HOUSING AND ECONOMIC RECOVERY ACT OF 2008
Quote: “Page 2732
EXCEPTION.—Notwithstanding paragraph (1), the Director may permit a regulated entity, to the extent appropriate or applicable, to repurchase, redeem, retire, or otherwise acquire shares or ownership interests if the repurchase, redemption, retirement, or other acquisition— ‘‘(A) is made in connection with the issuance of additional shares or obligations of the regulated entity in at least an equivalent amount; and ‘‘(B) will reduce the financial obligations of the regulated entity or otherwise improve the financial condition of the entity.’’.
NOTE: REPURCHASE, REDEEM, RETIRE...
WILL REDUCE THE FINANCIAL OBLIGATIONS OF THE REGULATED ENTITY.
Link: https://www.congress.gov/110/plaws/publ289/PLAW-110publ289.pdf
Let’s simplify this…
HERA Page 2732
The FHFA appointed CEOs failed by sending the NWS payments to the Treasury without the terms of the Pay Down of the Liquidation Preference applied.
Any loyal conservator of Fannie and Freddie would take advantage of the refinancing option to end the bailout arrangement, by paying off the senior preferred in full.
The liquidation preference has be paid and the Senior Preferred Stock should be canceled.
The FHFA Director can at any time, REPURCHASE, REDEEM, RETIRE... First the Senior Preferred Stock and second the Junior Preferred Stock.
HOUSING AND ECONOMIC RECOVERY ACT OF 2008
Quote: “Page 2732
EXCEPTION.—Notwithstanding paragraph (1), the Director may permit a regulated entity, to the extent appropriate or applicable, to repurchase, redeem, retire, or otherwise acquire shares or ownership interests if the repurchase, redemption, retirement, or other acquisition— ‘‘(A) is made in connection with the issuance of additional shares or obligations of the regulated entity in at least an equivalent amount; and ‘‘(B) will reduce the financial obligations of the regulated entity or otherwise improve the financial condition of the entity.’’.
NOTE: REPURCHASE, REDEEM, RETIRE...
WILL REDUCE THE FINANCIAL OBLIGATIONS OF THE REGULATED ENTITY.
Link: https://www.congress.gov/110/plaws/publ289/PLAW-110publ289.pdf
Not sure about Freddie, but Fannie issuing money-losing credit-risk transfers.
Tim Howard said, "FHFA’s mandate that they keep issuing money-losing credit-risk transfer securities that its own consultant reported cost the companies $30 dollars in interest payments for every $1 of credit losses transferred in a normal environment, and $3 in interest for every $1 dollar transfer during an environment of severe stress."
https://howardonmortgagefinance.com/2023/06/05/response-to-fhfa-pricing-rfi/#comments
Instead of saying " Separate Account plan" why not just say return the stolen money?
The Separate Account is located in the dark hole of the Treasury.
Apology to FFFacts, Robert and the board. You guys are right I had it wrong. I would never intentionally post wrong information on purpose. I do understand the case is not about challenging the conservator or the SPSPA. It's about good faith and dealings. I have never heard the statement of an “Implicit Contract.” So, I said,
"There was NO VERBAL agreement therefore there is no “Implicit Contract.”
Barron helped me understand.
"Implied good faith and dealings."
Quote: "The case is about common law contracts between the buyer and seller of share certificates. An intrinsic property of that contract is the implied good faith and dealings. Lamberth originally dismissed this claim due to HERA, but was overruled by the appeals court. HERA cannot override common law contract claims such as this." End of Quote
Robert Asked
Quote: “Okay, give me an exact dollar damage fee as a result of the August 17, 2012, Net Worth Swipe, NOT BASED ON SPECULATION OR ASSUMPTIONS. Break it down further and tell me the exact dollar damages for Fannie Mae and Freddie Mac, then exactly how to split it between each individual class of JPS and then Common.” End of Quote.
Fannie Mae reported yesterday.
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=172485482
Freddie Mac
JPS are due $14.1 billion (par value) and the common shares own the company.
Common Shareholders $214.08 per share Intrinsic Value.
Freddie Mac
June 30, 2023
Freddie Mac Reports Net Income of $2.9 Billion for Second Quarter 2023
Earnings Power of the Business
A multiple of 12 is not unreasonable
EARNINGS POWER OF THE BUSINESS
Freddie Mac common stock outstanding 650,059,553
$2.9 billion net income for the second quarter of 2023.
Freddie Mac net earnings $2.9 billion per quarter, a projection of $11.6 billion net per year.
$11.6 billion net / 650,059,553 = $17.84 per share of earnings
Price to Earnings Ratio of 12 x $17.84 = $214.08 per share Intrinsic Value
Barron Quote:
“I posit that the variable liquidation preference outlined in the SPSPA and all amendments are an illegal commitment fee/charge attached to the purchase of the senior preferred shares. Prohibited by the Charter Act. The warrants are also a fee in consideration for access to the commitment. Prohibited by the Charter Act.
I posit that the senior preferred shares with their variable liquidation preference as outlined in the SPSPA constitute a new product for the purpose of the secondary mortgage market outlined in the charter act at sec 1719.
I posit that under the safety and soundness act as modified by HERA, the sale of SPS with a variable liquidation preference to Treasury under authority of sec 1719(g) of the Charter Act required notice in the federal register, opportunity for public comment, and official rule making by the plain language of the safety and soundness act.
I posit that the above statutory violations necessarily violate the warranties on behalf of the FHFA-C contained in the SPSPA.
301 Billion to be returned to the corporation. LP and warrants canceled. Future of 191 billion of taxpayer debt illegally given to corps to be determined.” End of Quote
https://www.freddiemac.com/investors/financials/pdf/2023er-2q23_release.pdf
There was NO VERBAL agreement therefore there is no “Implicit Contract”
THE CONTRACT WAS WRITTEN DOWN AND FORCED ON THE COMPANIES EVERYONE CAN READ IT.
Stop with the playing with words.
SENIOR PREFERRED STOCK PURCHASE AGREEMENT
Dated September 7, 2008.
link: https://www.fhfa.gov/Conservatorship/Documents/Senior-Preferred-Stock-Agree/FNM/SPSPA-amends/FNM-SPSPA_09-07-2008.pdf
Robert Asked
Quote: “Okay, give me an exact dollar damage fee as a result of the August 17, 2012 Net Worth Swipe, NOT BASED ON SPECULATION OR ASSUMPTIONS. Break it down further and tell me the exact dollar damages for Fannie Mae and Freddie Mac, then exactly how to split it between each individual class of JPS and then Common.” End of Quote.
Fannie Mae
JPS are due $19.1 billion (par value) and the common shares own the company.
Common Shareholders $207.24 per share Intrinsic Value.
Fannie Mae
June 30, 2023
Fannie Mae Reports Net Income of $5.0 Billion for Second Quarter 2023
Earnings Power of the Business
A multiple of 12 is not unreasonable
EARNINGS POWER OF THE BUSINESS
Fannie Mae’s common stock outstanding 1,158,087,567
$5.0 billion net income for the second quarter of 2023.
Fannie Mae’s net earnings $5.0 billion per quarter, a projection of $20 billion net per year.
$20 billion net / 1,158,087,567 = $17.27 per share of earnings
Price to Earnings Ratio of 12 x $17.27 = $207.24 per share Intrinsic Value
Can do Freddie Mac when earnings are reported for the Second Quarter 2023.
Barron Quote:
“I posit that the variable liquidation preference outlined in the SPSPA and all amendments are an illegal commitment fee/charge attached to the purchase of the senior preferred shares. Prohibited by the Charter Act. The warrants are also a fee in consideration for access to the commitment. Prohibited by the Charter Act.
I posit that the senior preferred shares with their variable liquidation preference as outlined in the SPSPA constitute a new product for the purpose of the secondary mortgage market outlined in the charter act at sec 1719.
I posit that under the safety and soundness act as modified by HERA, the sale of SPS with a variable liquidation preference to Treasury under authority of sec 1719(g) of the Charter Act required notice in the federal register, opportunity for public comment, and official rule making by the plain language of the safety and soundness act.
I posit that the above statutory violations necessarily violate the warranties on behalf of the FHFA-C contained in the SPSPA.
301 Billion to be returned to the corporation. LP and warrants canceled. Future of 191 billion of taxpayer debt illegally given to corps to be determined.” End of Quote
https://www.fanniemae.com/media/48556/display
That's the problem, “The Scope of Evidence in this case is limited to that sole issue only... “Breach of Contract” That's laughable. The government with this unjust judge has limited the evidence down to practically nothing. The courts are putting the lawyers through and endless maze that leads to no where.
First off there is no “Implicit Contract”
THE CONTRACT FORCED ON THE COMPAINES EVERYONE CAN READ IT.
SENIOR PREFERRED STOCK PURCHASE AGREEMENT
Dated September 7, 2008.
link: https://www.fhfa.gov/Conservatorship/Documents/Senior-Preferred-Stock-Agree/FNM/SPSPA-amends/FNM-SPSPA_09-07-2008.pdf
MISTAKE
The lawyers are focused on the third amendment net worth sweep; IT IS NOT WORKING! By Public Law the whole contract is illegal, the contract is illegal based on the United States is not permitted to charge a commitment fee to be paid by the enterprises. The Senior Preferred Stock Purchase Agreement is not a law: The SPSPA is an illegal contract.
THE CHARTER ACT IS THE LAW
Shareholders have an Implicit Contract ?? Robert were did this term come from did you make it up? The Shareholders are Stockholders Owners of the Company. There is no implied contract.
I appreciate all you have done for our cause but please man, keep it real.
"The Jury needs to see ALL these examples of total Govt Corruption ..
"every dollar of profit they make" ... "they will NOT BE ALLOWED to return to profitable entities " ...
Even More Corruption...
Tim Howard Quote: "FHFA’s mandate that they keep issuing money-losing credit-risk transfer securities that its own consultant reported cost the companies $30 dollars in interest payments for every $1 of credit losses transferred in a normal environment, and $3 in interest for every $1 dollar transfer during an environment of severe stress." End of Quote...
https://howardonmortgagefinance.com/2023/06/05/response-to-fhfa-pricing-rfi/#comments
Where is "maximize profits for taxpayers" written in the Charter Act? Specifically, in this provision entitled Fee Limitation of the United States:
These expert lawyers never mentioned the Charter Act!
Barron said it best. Introduce this into the courtroom.
Quote: “ I posit that the variable liquidation preference outlined in the SPSPA and all amendments are an illegal commitment fee/charge attached to the purchase of the senior preferred shares. Prohibited by the Charter Act. The warrants are also a fee in consideration for access to the commitment. Prohibited by the Charter Act.
I posit that the senior preferred shares with their variable liquidation preference as outlined in the SPSPA constitute a new product for the purpose of the secondary mortgage market outlined in the charter act at sec 1719.
I posit that under the safety and soundness act as modified by HERA, the sale of SPS with a variable liquidation preference to Treasury under authority of sec 1719(g) of the Charter Act required notice in the federal register, opportunity for public comment, and official rule making by the plain language of the safety and soundness act.
I posit that the above statutory violations necessarily violate the warranties on behalf of the FHFA-C contained in the SPSPA.
301 Billion to be returned to the corporation. LP and warrants canceled. Future of 191 billion of taxpayer debt illegally given to corps to be determined.” End of Quote
Guido, thank you for explaining.
Amazing, shareholders are required to pay our enemy’s lawyers to fight us! FHFA’s expenses are funded by Fannie and Freddie!
I’ve never understood why the Plaintiffs are asking for 1.6B + interest,… Makes no sense! Someone please explain??
Lost Value It’s simple, with the NWS, the US government took away 100% of the companies value.
Grand Theft Treasury
By: Richard A. Epstein
Quote: "To call that money a “dividend” relies on a profound public misunderstanding of the complex transactions that generated this ill-begotten Treasury bonanza." End of Quote.
Quote: "It takes no special acumen to realize that the 2012 transaction was completely one-sided; FHFA and Treasury used a fancy set of legal maneuvers to strip both corporations of their assets for the sole benefit of the government. Generally, senior preferred shareholders are entitled to recover their principal and interest in full, after which their shares are cancelled. In this case, the government did precisely the opposite. It treated Fannie and Freddie as gifts that keep on giving, wiping out all shareholder profits." End of Quote
Link: https://www.hoover.org/research/grand-theft-treasury#:~:text=Grand%20Theft%20Treasury%20The%20U.S.%20government%20has%20unconstitutionally,full%20of%20good%20news%20for%20the%20body%20politic.
The Shareholders have lost both companies to the Treasury. ALL THE CASH THAT CAN BE TAKEN OUT OF THE BUSINESS DURING ITS REMAINING LIFE.
Barron, I understand what you have pointed out the Director broke the law on the public notice violation.
Question, did sec 1719 (g) "new products offered" under this section of the Charter Act allow the Treasury to charge a fee? (If the New Product was approved after the public notice.)
Charter Act: Fee Limitation “(f) PROHIBITION ON ASSESSMENT OR COLLECTION OF FEE OR CHARGE BY UNITED STATES.
In the court case before Judge Lamberth if the junior preferred holders of Fannie and Freddie, and the common holders of Freddie receive a settlement the holders of the shares will have to be in the count. What happens when the shareholders find out their shares possibly do not exist? I will tell you what will happen...
THE COUNTERFEIT SHARES OUTSTANDING WILL COME TO LIGHT.
The U.S. Securities and Exchange Commission knew about this, it's reported on their website.
COUNTERFEITING
INFORMATION FROM: U.S. Securities and Exchange Commission web site.
The counterfeiting of U.S. assets. Theft from pension funds, State employee retirement accounts, and U.S. Citizens. The counterfeiting of shares of Fannie Mae and Freddie Mac. Where are our regulators and who are they protecting?
https://www.sec.gov/comments/s7-08-09/s70809-407a.pdf#:~:text=Fannie%20Mae%20and%20Freddie%20Mac%20are%20publicly%20traded,was%20occurring%20in%20the%20trading%20of%20the%20GSEs.
Kthomp19: Conversation on the White Paper
Quote: “And, more importantly, so what? Even if FnF didn't "need" the treatment they got, it happened anyway. Being "right" about this, which again is a matter of opinion, doesn't change anything.” End of Quote... You are right it doesn't change anything.
Kthomp19 Quote: “The laws matter. The Supreme Court said the NWS was legal, which means FHFA and Treasury have been following the law all along. Maybe not your interpretation of it, but too bad.” End of Quote
Yes, The law does matter. The FHFA / Treasury have not been following the Law.
THE LAW CHARTER ACT
The United States prohibition on assessment or collection of fee or charge to Fannie Mae, (section 304 Fee Limitation). Only Federal Reserve Banks are authorized to be reimbursed of fees, (section 309).
SEC. 304. SECONDARY MARKET OPERATION
Fee Limitation
Quote: “(f) PROHIBITION ON ASSESSMENT OR COLLECTION OF FEE OR CHARGE BY UNITED STATES.—Except for fees paid pursuant to section 309(g) of this Act and assessments pursuant to section 1316 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, no fee or charge may be assessed or collected by the United States (including any executive department, agency, or independent establishment of the United States) on or with regard to the purchase, acquisition, sale, pledge, issuance, guarantee, or redemption of any mortgage, asset, obligation, trust certificate of beneficial interest, or other security by the corporation. No provision of this subsection shall affect the purchase of any obligation by the Secretary of the Treasury pursuant to subsection (c) of this section.” End of Quote. Page 16
Only Federal Reserve Banks are authorized to be reimbursed of fees, (section 309).
SEC. 309. GENERAL POWERS OF GOVERNMENT NATIONAL MORTGAGE ASSOCIATION AND FEDERAL NATIONAL MORTGAGE ASSOCIATION
Federal Reserve Banks to Act as Fiscal Agents (Fannie Mae and GNMA)
Quote: “(g) DEPOSITARIES, CUSTODIANS, AND FISCAL AGENTS.—The Federal Reserve banks are authorized and directed to act as depositaries, custodians, and fiscal agents for each of the bodies corporate named in section 302(a)(2), for its own account or as fiduciary, and such banks shall be reimbursed for such services in such manner as may be agreed upon; and each of such bodies corporate may itself act in such capacities, for its own account or as fiduciary, and for the account of others.” End of Quote. Page 29
https://www.fanniemae.com/sites/g/files/koqyhd191/files/migrated-files/resources/file/aboutus/pdf/fm-amended-charter.pdf
https://www.congress.gov/110/plaws/publ289/PLAW-110publ289.pdf
You said it yourself...
Rodney5
Re: Rodney5 post# 753488
Sunday, 04/23/2023 9:01:48 PM
Barron Quote: “They are only true if the illegal actions of Treasury and its subservient FHFA are not eventually overturned.”
Kthomp19 Quote: “Overturned by whom? I don't see how any existing lawsuit can have that result, and anyone wanting to file a new lawsuit had better hurry the hell up.”
Link: https://investorshub.advfn.com/boards/read_msg.aspx?message_id=171706295
Donotunderstand, Asked "how does this evidence F and F buying PLMBS paper"...
Paulson said it best himself, when he told the Financial Crisis Inquiry Commission, “[Fannie and Freddie], more than anyone, were the engine we needed to get through the problem.” Treasury needed Fannie and Freddie to help keep the financial system afloat, and it simply took them, under pretense of a rescue.
The Federal Reserve’s program purchased MBS issued by the GSEs. Putting aside toxic or not the Treasury / Federal Reserve freely admitted the GSE's were used to help prop up the housing market.
I am not a Forensic Accountant, nor a CFO. I can easily understand what both the White Paper has stated and Mr Howard's rebuttal. Who is right? I do not know. NOTE: Both have concluded Fannie Mae did not need the Treasury's intervention of a cash infusion.
Adam Spittler CPA, MS
Certified Public Accountant
Master of Accountancy
Mike Ciklin JD, MBA, MRE
Master of Business Administration
G. Stevenson Smith, Ph.D., CPA, CMA
PH.D. highest academic degree you can obtain in accounting.
Certified Public Accountant
Certified management accountant
Timothy Howard was a senior executive at Fannie Mae for 23 years, chief financial officer, and became vice chairman of the board.
White Paper
Link: https://www.housingwire.com/wp-content/uploads/media/files/Editorial/Trey-Files/White-Paper_Treasury-Fannie-Mae-FINAL.pdf
Comments on Spittler, Ciklin and Smith “White Paper”
Link: https://howardonmortgagefinance.com/2015/09/30/comments-on-spittler-ciklin-and-smith-white-paper/
Here’s the numbers, numbers don’t lie. You can try to explain it away in defense of the government but we all know the truth.
These two items are “Purchases of Loans Held for Sale” and “Purchases of Available-for-Sale Securities.” In millions, the outflows were $109,684 and $165,103, respectively. Part of the $165,103 outflow was due to “advances to lenders.” Without these outflows, Fannie Mae would have not had a deficit in its 2009 cash position. It is also important to note that during 2009 and 2010, Fannie Mae continued to purchase loans from originating institutions that exceeded the sale of mortgage backed securities (MBS). For Fannie Mae, 2009 was an anomaly as the Treasury created a significant outflow of cash resources into the accounts of private investment bankers who had liquidity problems and were able to sell their toxic mortgages to Fannie Mae as ordered by the Treasury. Page 6
Paulson said it best himself, when he told the Financial Crisis Inquiry Commission, “[Fannie and Freddie], more than anyone, were the engine we needed to get through the problem.” Treasury needed Fannie and Freddie to help keep the financial system afloat, and it simply took them, under pretense of a rescue.
The Federal Reserve’s program purchased MBS issued by the GSEs. Putting aside toxic or not the Treasury / Federal Reserve freely admitted the GSE's were used to help prop up the housing market.
The Writer of the White Paper
These two items are “Purchases of Loans Held for Sale” and “Purchases of Available-for-Sale Securities.” In millions, the outflows were $109,684 and $165,103, respectively. Part of the $165,103 outflow was due to “advances to lenders.” Without these outflows, Fannie Mae would have not had a deficit in its 2009 cash position. It is also important to note that during 2009 and 2010, Fannie Mae continued to purchase loans from originating institutions that exceeded the sale of mortgage backed securities (MBS). For Fannie Mae, 2009 was an anomaly as the Treasury created a significant outflow of cash resources into the accounts of private investment bankers who had liquidity problems and were able to sell their toxic mortgages to Fannie Mae as ordered by the Treasury. Page 6
I did post the evidence you did not read it. Mr. Howard apparently did not dig deep enough.
Evidence
From Board of Governors of the Federal Reserve System
95th Annual Report 2008
Quote: "since the November 25 announcement of the Federal Reserve’s program to purchase MBS issued by the housing GSEs and Ginnie Mae, and they currently stand at 5 percent." End of Quote page 19
Link: https://www.federalreserve.gov/boarddocs/rptcongress/annual08/pdf/AR08.pdf
Quote: "It's a big event that the Federal Reserve is offering to buy up nearly 10% of the agency mortgage market," said Art Frank, a mortgage strategist with Deutsche Bank Tuesday morning, the Federal Reserve announced that it would buy up to $500 billion of mortgage bonds guaranteed by Fannie, Freddie and Ginnie Mae, providing the ultimate support to prop up the $4.8 trillion market of these securities. The central bank also will buy $100 billion of the mortgage finance companies' debt securities, including that of the Federal Home Loan Bank, through reverse auctions starting next week. So far, other initiatives to prop up the market including a plan to have both the government-sponsored enterprises buy nearly $200 billion of these bonds and the U.S. Treasury's unlimited purchase of these bonds have done little to stop the weakening of risk premiums on mortgage bonds. As a result, mortgage rates have remained at elevated levels with little relief to consumers." End of Quote
Link: https://investorshub.advfn.com/boards/read_msg.aspx?message_id=33791597
R&R: A Commonsense Approach to Recapitalizing and Releasing
Fannie Mae and Freddie Mac
Bryndon D. Fisher
Quote: "All the calculations have been done and supported, so no one will be caught off guard if a judge (like Justice Thomas did during oral arguments in Collins) asks “How will we unscramble this egg?” It’s simply math your Honor, science will have nothing to do with it." End of Quote
https://drive.google.com/file/d/1LNWzb9QhI1GiOk8W_2MYgERyE4yNRU04/view
Thank you Bryndon
The Toxic Waste funneled through Fannie and Freddie to the Fed.
White Paper
“It should be noted in Figure 2 that the only years when Fannie Mae showed negative cash generation was 2009 and 2010 and not in 2008 when it was taken over by the Treasury. In reviewing the Statement of Cash Flows for 2009, it can be seen that there were two cash outflows that were extremely large and both decreased by more than $100B in 2010. These two items are “Purchases of Loans Held for Sale” and “Purchases of Available-for-Sale Securities.” In millions, the outflows were $109,684 and $165,103, respectively. Part of the $165,103 outflow was due to “advances to lenders.” Without these outflows, Fannie Mae would have not had a deficit in its 2009 cash position. It is also important to note that during 2009 and 2010, Fannie Mae continued to purchase loans from originating institutions that exceeded the sale of mortgage backed securities (MBS). For Fannie Mae, 2009 was an anomaly as the Treasury created a significant outflow of cash resources into the accounts of private investment bankers who had liquidity problems and were able to sell their toxic mortgages to Fannie Mae as ordered by the Treasury. Page 6
NOTE 11: 2008 Blog Report from MyBudget360: “There is a report out by Bloomberg and now being reported by CBS MarketWatch that Federal regulators are going to order Fannie Mae and Freddie Mac to start buying $40 billion a month in troubled mortgages each month.” Page 6
Link: https://www.housingwire.com/wp-content/uploads/media/files/Editorial/Trey-Files/White-Paper_Treasury-Fannie-Mae-FINAL.pdf
Evidence
From Board of Governors of the Federal Reserve System
95th Annual Report 2008
Quote: "since the November 25 announcement of the Federal Reserve’s program to purchase MBS issued by the housing GSEs and Ginnie Mae, and they currently stand at 5 percent." End of Quote page 19
Link: https://www.federalreserve.gov/boarddocs/rptcongress/annual08/pdf/AR08.pdf
Quote: "It's a big event that the Federal Reserve is offering to buy up nearly 10% of the agency mortgage market," said Art Frank, a mortgage strategist with Deutsche Bank Tuesday morning, the Federal Reserve announced that it would buy up to $500 billion of mortgage bonds guaranteed by Fannie, Freddie and Ginnie Mae, providing the ultimate support to prop up the $4.8 trillion market of these securities. The central bank also will buy $100 billion of the mortgage finance companies' debt securities, including that of the Federal Home Loan Bank, through reverse auctions starting next week. So far, other initiatives to prop up the market including a plan to have both the government-sponsored enterprises buy nearly $200 billion of these bonds and the U.S. Treasury's unlimited purchase of these bonds have done little to stop the weakening of risk premiums on mortgage bonds. As a result, mortgage rates have remained at elevated levels with little relief to consumers." End of Quote
Link: https://investorshub.advfn.com/boards/read_msg.aspx?message_id=33791597
As we have seen Fannie Mae was able to pay back the entire amount of funding from the US Treasury because it never burned or needed the cash in the first place... as proven, strangely enough, via the Company's own disclosures.
Link: https://www.housingwire.com/wp-content/uploads/media/files/Editorial/Trey-Files/White-Paper_Treasury-Fannie-Mae-FINAL.pdf
The GSEs did not need a bailout. The
‘Astronomical’ non-cash accounting losses put on the companies’ books by FHFA forced them to draw $187 billion in senior preferred stock, which, at a dividend rate of 10 percent, required them to pay $18.7 billion per year to Treasury.
The FHFA created an emergency when no emergency existed.
Mr. Howard Quote:” At the time Fannie and Freddie were taken over, the serious delinquency rate on their residential mortgages was about one-third that of prime mortgage lenders, and less than one-tenth that of subprime lenders. Treasury took the companies over not because they were weak, but because they were strong. Paulson said it best himself, when he told the Financial Crisis Inquiry Commission, “[Fannie and Freddie], more than anyone, were the engine we needed to get through the problem.” Treasury needed Fannie and Freddie to help keep the financial system afloat, and it simply took them, under pretense of a rescue. That should be evident to judge Sweeney.“ End of Quote
Link: https://howardonmortgagefinance.com/2016/02/
There was no 'Emergency.'
FHFA freely admitted the companies were adequately capitalized, evidence the companies exceeded capital requirements absolutely no need for emergency funding.
SECOND QUARTER CAPITAL RESULTS
Minimum Capital
Fannie Mae’s FHFA-directed capital requirement on June 30, 2008 was $37.5 billion and its statutory minimum capital requirement was $32.6 billion. Fannie Mae’s core capital of $47.0 billion exceeded the FHFA-directed capital requirement by $9.4 billion.
Freddie Mac’s FHFA-directed capital requirement on June 30, 2008 was $34.5 billion and its statutory minimum capital requirement was $28.7 billion. Freddie Mac’s core capital of $37.1 billion exceeded the FHFA-directed minimum capital requirement by $2.7 billion.
Link:https://www.fhfa.gov/mobile/Pages/public-affairs-detail.aspx?PageName=FHFA-Announces-Suspension-of-Capital-Classifications-During-Conservatorship-and-Discloses-Minimum-and-RiskBased-Cap.aspx
https://www.fanniemae.com/sites/g/files/koqyhd191/files/migrated-files/resources/file/aboutus/pdf/fm-amended-charter.pdf
Excellent Barron, “They bought the GSEs but don’t want to back up the MBS.”
Take all the profits with no liabilities! That’s a fact.
Form 10K 2022
Part 1 page 1
“The U.S. Government does not guarantee our securities or other obligations.”
https://www.fanniemae.com/media/46276/display
The Treasury did not purchase OBLIGATIONS! BOTH COMPANIES WERE ADEQUATELY CAPITALIZED! 'Deferred Tax Assets' the Treasury forced the companies to write down and record these non-cash expenses made the companies appear bankrupted. Fannie Mae and Freddie Mac were no where near bankrupted. THE TREASURY HAS STOLEN THE COMPANIES! WHAT DID THE $200 BILLION LINE OF CREDIT BUY MR. PRO_SE ?? NOTHING!
And NO the Charter Act only allowed the increase of purchase obligations for a limited amount of time. Expired December 31, 2009. Page 18
The HERA legislation granted temporary authority to the Treasury to purchase obligations of the Enterprise, above the limits written in the Charter, (Charter limitation of 2.25 billion).
There was no 'Emergency.'
FHFA freely admitted the companies were adequately capitalized, evidence the companies exceeded capital requirements absolutely no need for emergency funding.
SECOND QUARTER CAPITAL RESULTS
Minimum Capital
Fannie Mae’s FHFA-directed capital requirement on June 30, 2008 was $37.5 billion and its statutory minimum capital requirement was $32.6 billion. Fannie Mae’s core capital of $47.0 billion exceeded the FHFA-directed capital requirement by $9.4 billion.
Freddie Mac’s FHFA-directed capital requirement on June 30, 2008 was $34.5 billion and its statutory minimum capital requirement was $28.7 billion. Freddie Mac’s core capital of $37.1 billion exceeded the FHFA-directed minimum capital requirement by $2.7 billion.
Link:https://www.fhfa.gov/mobile/Pages/public-affairs-detail.aspx?PageName=FHFA-Announces-Suspension-of-Capital-Classifications-During-Conservatorship-and-Discloses-Minimum-and-RiskBased-Cap.aspx
https://www.fanniemae.com/sites/g/files/koqyhd191/files/migrated-files/resources/file/aboutus/pdf/fm-amended-charter.pdf
Wise Man Quote: “Playing the fool daily with "MBS (OBLIGATIONS)", when the SPS are obligations too, or asking "where is allowed a $200B UST backup?" when the Charter Act allows an unlimited amount (UST is using the trick of SPS increased, instead of issued/purchased. A Securities Law violation), etc, isn't a viable defense strategy.” End of Quote
Thank you Guido for all the efforts you put forward.
Quote: “ Bradford isn't making statements. He's lying. First of all, in a restructuring, the JPS are wiped out too,” End of Quote
Tried to explain the same back in June
Rodney5
Re: kthomp19 post# 757330
Saturday, 06/10/2023 8:33:28 AM
Please read what you wrote!
Quote: “Treasury must take a haircut of some kind on its senior prefs in order to ever get any value out of them. Whether that's a full writedown, a full conversion to common, or somewhere in between, Treasury will eventually realize they cannot recover a dollar in cash for every dollar in liquidation preference the senior prefs have.” End of Quote
Eventually realize?? Get any value??
My land man! the Treasury has swept the ENTIRE NET WORTH! Both common and JPS are wiped out history and both will see no value unless the Treasury writes down the LP and cancels the SPS… Your JPS are not safe at all in the capital stack.
The Treasury owns the whole of the companies. And could easily demand payment by placing the companies in receivership and there’s absolutely nothing we could do about it. And some how you think your JPS will be saved!
Charter Act
No were in the Charter Act did Congress give the Treasury permission to provide a LINE OF CREDIT. Congress granted ONLY PURCHASE OF OBLIGATIONS (MBS).
What did the Treasury's funding commitment of $200 billion buy? NOTHING
Quote: “(3) FUNDING.—For the purpose of the authorities granted in this
subsection, the Secretary of the Treasury may use the proceeds of the sale of
any securities issued under chapter 31 of Title 31, and the purposes for
which securities may be issued under chapter 31 of Title 31 are extended to
include such purchases and the exercise of any rights in connection with
such purchases. Any funds expended for the purchase of, or modifications
to, obligations and securities, or the exercise of any rights received in
connection with such purchases under this subsection shall be deemed
appropriated at the time of such purchase, modification, or exercise.” End of Quote
THE ABOVE TAKE NOTE:
PURCHASES,
WITH SUCH PURCHASES,
EXPENDED FOR THE PURCHASE OF,
CONNECTION WITH SUCH PURCHASES,
AT THE TIME OF SUCH PURCHASE.
SEC. 304 Purchase Obligations
Subsection (c)
$200,000,000,000 (two hundred billion dollars): This amount of money is construed as a commitment from the Treasury, a line of credit, backstop, this money was not used to purchase anything. What did the $200 billion buy? NOTHING
This money was not used to purchase obligations of Fannie Mae as permitted in the HERA legislation under terms as defined by the changes of the company's Charter Act by HERA.
The HERA legislation granted temporary authority to the Treasury to purchase obligations of the Enterprise, above the limits written in the Charter, (Charter limitation of 2.25 billion).
Therefore, the FHFA was not given authority by Congress to enter into contract with the United States Treasury in the amount of $200,000,000,000 (two hundred billion dollars): This amount of money is construed as a commitment from the Treasury, a line of credit, backstop.
Neither the Charter Act nor did HERA authorize the Treasury to charge a commitment fee on a line of credit to be paid by the Enterprise. The United States prohibition on assessment or collection of fee or charge to Fannie Mae, (section 304 Fee Limitation). Only Federal Reserve Banks are authorized to be reimbursed of fees, (section 309).
SEC. 304. SECONDARY MARKET OPERATION
Fee Limitation
Quote: “(f) PROHIBITION ON ASSESSMENT OR COLLECTION OF FEE OR CHARGE BY UNITED STATES.—Except for fees paid pursuant to section 309(g) of this Act and assessments pursuant to section 1316 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, no fee or charge may be assessed or collected by the United States (including any executive department, agency, or independent establishment of the United States) on or with regard to the purchase, acquisition, sale, pledge, issuance, guarantee, or redemption of any mortgage, asset, obligation, trust certificate of beneficial interest, or other security by the corporation. No provision of this subsection shall affect the purchase of any obligation by the Secretary of the Treasury pursuant to subsection (c) of this section.” End of Quote. Page 16
Only Federal Reserve Banks are authorized to be reimbursed of fees, (section 309).
SEC. 309. GENERAL POWERS OF GOVERNMENT NATIONAL MORTGAGE ASSOCIATION AND FEDERAL NATIONAL MORTGAGE ASSOCIATION
Federal Reserve Banks to Act as Fiscal Agents (Fannie Mae and GNMA)
Quote: “(g) DEPOSITARIES, CUSTODIANS, AND FISCAL AGENTS.—The Federal Reserve banks are authorized and directed to act as depositaries, custodians, and fiscal agents for each of the bodies corporate named in section 302(a)(2), for its own account or as fiduciary, and such banks shall be reimbursed for such services in such manner as may be agreed upon; and each of such bodies corporate may itself act in such capacities, for its own account or as fiduciary, and for the account of others.” End of Quote. Page 29
https://www.fanniemae.com/sites/g/files/koqyhd191/files/migrated-files/resources/file/aboutus/pdf/fm-amended-charter.pdf
https://www.congress.gov/110/plaws/publ289/PLAW-110publ289.pdf
Wise Man Quote: "Mr.Pro Se, no commitment fee was ever assessed with regard to the annual fee.
The initial Warrant and $1B SPS, both issued for free, are considered a higher return on the SPS authorized in the unlimited rate UST backup of the Charter Act inserted by 2008 HERA," End of Quote...
Wise Man, in the Charter Act were is it written an unlimited rate UST backup? No were in the Charter Act did Congress give the Treasury permission to provide a LINE OF CREDIT. Congress granted ONLY PURCHASE OF OBLIGATIONS (MBS).
I find a limit written in the illegal contract SPSPA, and this illegal contract was between the FHFA and the Treasury.
SECOND AMENDMENT TO AMENDED AND RESTATED
SENIOR PREFERRED STOCK PURCHASE AGREEMENT
"Purchaser increased to $200,000,000,000 the maximum aggregate amount permitted" Page 1
https://www.fhfa.gov/Conservatorship/Documents/Senior-Preferred-Stock-Agree/FNM/SPSPA-amends/FNM-Second-Amend-to-the-Amended-and-Restated-SPSPA_12-24-2009.pdf