The Nuclear Option!
PUBLIC LAW 110–289—JULY 30, 2008
HOUSING AND ECONOMIC RECOVERY ACT OF 2008 or HERA is the laws passed by Congress to create the FHFA and the position of Director to oversee operations of the agency in compliance with the statutes of HERA. The Director was given powers to put FnF into conservatorship or receivership, “to ensure that the purposes of “HERA”, the authorizing statutes, and any other applicable law are carried out.” The Director must make sure “each regulated entity carries out its statutory mission only through activities that are authorized under and consistent with this title and the authorizing statutes”.
HERA, in SEC. 1313A. created the FHFA Oversight Board to “advise the Director with respect to overall strategies and policies in carrying out the duties of the Director under this title.” The Board was to be comprised of 4 members, including the Sec. of the Treasury, the HUD Secretary, the Chairman of the SEC, and one would be the Director of the FHFA.
HERA established limitations the Board. It states “The Board may not exercise any executive authority, and the Director may not delegate to the Board any of the functions, powers, or duties of the Director.” Also, in HERA (Subtitle C ‘‘(7))(FHFA) Agency Not Subject To Any Federal Agency. When acting as conservator or receiver, the Agency shall not be subject to the direction or supervision of any other agency of the United States or any State in the exercise of the rights, powers, and privileges of the Agency.
Elsewhere in HERA, the Director is given the powers to create new statutes and rules but only to the extent they comply with the authorizing statues, portions of which are stated above.
Simple enough.
Now, lets consider the original restated SPSPA signed on Sept 27, 2008. In this Agreement, under section 5.3:
5.3. Conservatorship. Seller (FnF) shall not (and Conservator (FHFA Director), by its signature below, agrees that it shall not), without the prior written consent of Purchaser (Treasury), terminate, seek termination of or permit to be terminated the conservatorship of Seller pursuant to Section 1367 of the FHE Act, other than in connection with a receivership pursuant to Section 1367 of the FHE Act.
HERA authorizing statues state that FHFA is not subject to any other Federal Agency and FHFA Director may not allow any Oversight Board Members to be delegated powers of the Directior, while this section of the SPSPA requires that the FHFA Director surrender the powers to end a conservatorship to the Secretary of the Treasury.
This is a breach of HERA.
A Contract requiring that a statue or law be broken in order to validate the Contract is unlawful and unenforceable. This renders the SPSPA invalid and all actions subsequent to the signing of the SPSPA Contract must be unwound.