Fannie Mae-No Politics (FNMA)

[MRJ25]

I received a response from Mr. John Cornyn on one of the letters sent to the senators. Below is a copy of my letter, Mr. Cornyn's letter and my counter response.


May 6,2014

Dear Mr.Cornyn, esq.

Thanks for your response; very much appreciated. However, my concerns are not fully addressed.

• The conservator’s duty is to return the companies to sound and solvent condition, not to wind them down. The conservator is independent from the government; there is no reason for the conservator to wait for a resolution of the government. Once the GSE’s are sound and solvent they should be released from conservatorship.
• The 3rd Amendment "net worth" Sweep of all of Fannie Mae’s and Freddie Mac’s profits must be immediately abolished. The GSEs have effectively paid back all the tax payer debt and any net worth profit sweep from now on is an un-constitutional taking.
• In the face of 20+ lawsuits from various parties the government is still making an effort to wind down/replace the GSE’s. As un-constitutional as this act is the government is still pursuing to replace the GSE’s, without just compensation to the owners. How can we ever trust the government? This is an un-constitutional taking.
• I am a shareholder, but also a tax payer. I do not want tax payers to be on the hook for bailouts. This applies to the GSE’s, but also to the TBTF banks. Reform is necessary, but there is no need for abolishing and replacing the GSE’s with another entity. Higher reserves and more transparent accounting should be all that’s required and this applies to the TBTF banks also.


We appreciate you listening to our concerns regarding rule of law and respect for shareholder private property. I hope that my comments are kept in mind with any new legislation towards the GSE’s and the TBTF banks.

Cordially yours,

M. Robert Junier, P.E.


May 2, 2014

Dear Mr. Junier:

Thank you for contacting me regarding Fannie Mae and Freddie Mac. I appreciate having the benefit of your comments on this matter.
Fannie and Freddie are America’s two largest mortgage-finance companies, and their activities played a large role in causing the recent housing bubble and subsequent financial crisis. Prior to September 2008, they were “government-sponsored enterprises” (GSEs). Since then, they have been in federal conservatorship and have effectively become government entities.
As you may know, the leaders of the Senate Committee on Banking, Housing, and Urban Affairs recently released a discussion draft of the Housing Finance Reform and Taxpayer Protection Act. Among other things, the draft legislation would replace Fannie and Freddie with a new government entity called the Federal Mortgage Insurance Corporation (FMIC). The FMIC would act as a new federal regulator of the mortgage industry, designed to monitor the safety and soundness of various financial institutions. Proponents argue that proposal will shift more of the risks of mortgage lending to the private sector. Therefore, the federal government would only serve as a final backstop in the secondary market for mortgage-backed securities, helping to maintain the 30-year fixed mortgage. This proposal is expected to be considered by in the Senate Committee on Banking, Housing, and Urban Affairs in the near future. Although I am not a member of this Committee, you can be sure I will keep your views in mind should this legislation be considered by the full Senate.
I have long advocated reforming both Fannie and Freddie to protect taxpayer interests. In 2006, after we learned that Fannie had intentionally overstated its earnings by $10.6 billion, I urged the Senate Majority Leader to bring reform legislation before the full Senate that would have subjected GSEs to stricter oversight and regulations. Regrettably, the Senate did not consider these reforms.
Congress must reform GSEs to make sure that taxpayers’ money is not used to bail out those who made bad investment decisions. Unfortunately, according to the Congressional Budget Office, the mortgage guarantees that GSEs are expected to issue from 2015 through 2023 will cost federal taxpayers almost $20 billion.
You may be certain that, as a member of the Senate Finance Committee, I will continue to advocate for the reform of Fannie Mae and Freddie Mac to protect taxpayers. I am honored to represent Texas in the United States Senate. Thank you for taking the time to contact me.

Sincerely,
JOHN CORNYN
United States Senator
517 Hart Senate Office Building
Washington, DC 20510
Tel: [phone]
Fax: [phone]
http://www.cornyn.senate.gov

April 12, 2014

Dear Mr.Cornyn,



The current handling of the conservatorship of Freddy Mac and Fannie Mae is of great concern to me and all other concerned shareholders. It is the conservator's duty to return the companies to sound and solvent condition, not to wind them down. We appreciate you listening to our concerns regarding rule of law and respect for shareholder private property.

I want to reiterate our concerns that none of the bills being contemplated take into consideration shareholder's rights, and would wipe us all out of our hard earned retirement savings. Bills including Crapo Johnson, in draft form, are NOT acceptable to shareholders, and do not include consideration of shareholder rights. The Crapo Johnson bill is basically Obama care for the mortgage finance system. We don't need to change a housing finance system that has worked for many decades. Say NO to Crapo Johnson, Corker Warner, and Hensarling's PATH act.

Moving forward, our immediate concern is that the communistic like, 3rd Amendment "net worth" Sweep of all of Fannie Mae’s and Freddie Mac’s profits must be immediately abolished. The GSEs have effectively paid back all the tax payer debt and any net worth profit sweep from now on is an un-constitutional taking.

Tax payers are not blind to blatant disregard of basic property rights being perpetrated by the Treasury and the FHFA. The communistic net worth sweep of all of Fannie Mae's and Freddie Mac's profits must stop. We would be very grateful for your willingness to investigate what is going on at the Treasury, and for your willingness to consider shareholder interests in any legislation of the GSEs.


Very Sincerely,
M. Robert Junier, P.E.