Fannie Mae-No Politics (FNMA)

[obiterdictum]

Inept, immoral and irresponsible" would have been to let FNMA and FMCC perish in 2008 by extending no rescue. There was a cost to that rescue which was enormous. Now late-arrival shareholders that bought FnF shares on the cheap want to challenge in court every means by which the government recovers its investment.

What was the cost to that rescue which was enormous? Please detail. How many lawsuits are there? For what periods are the lawsuits suing for? Pre-conservatorship? During conservatorship? What types of law suits are there? What is being challenged exactly about how the government recovers its investment? Are lawsuits against the US Government recovering its investment?

The government invested to rescue Fannie. Most experts of the day said what they bought was probably worthless, but they accepted what they did with the provision of conservatorship to at least have control over the enormous tax-payer treasure that was being used to prop up thee GSE's.

What is insolvency? Were the GSEs insolvent on September 6, 2008? If so, how so? Please document the GSE insolvency. Why were the GSE not placed in receivership instead of conservatorship? Please document your answer. What was the main concern of the US Treasury? What was their concern for Agency MBS foreign investors in China, Japan, Hong Kong, South Korea, Taiwan and elsewhere? What was the concern about all of these and the relationship with placing the GSEs in conservatorship instead of receivership? Why did the FHFA two weeks after placing the GSEs in conservatorship order the GSEs to purchase 40 billion a month of mostly subprime, Alt-A and non-performing prime mortgage securities, if they were insolvent? What was enormous tax-payer treasure? Please document.

Now, fast forward to years later and FnF are showing metric signs of recovery.

Fannie stopped drawing from the US Treasury for the first quarter of 2012. Freddie Mac stopped drawing from the US Treasury for the second quarter of 2012. Since 2008, Fannie Mae has paid 10% and net sweep dividends amounting to $126.764 billion. Freddie Mac has paid 10% and net sweep dividends amounting to $86.279 billion. Total GSE dividends paid are $213.043 billion. By June 30, 2014, the total dividend payments made will exceed total draws from the US Treasury ($187.485 billion) by $25.558 billion.

Part of it is housing is starting recover.

How many billions are from housing starting to recover?

Part of it is banking reg's that improved the risk-quality of MBS paper.

As far as Fannie and Freddie are concerned, the GSEs set the underwriting standards for the loans they purchase from mortgage banks and mortgage originators. For banks to be able to sell mortgage loans they originate, they must fulfill the underwriting standards set by the GSEs. Before the conservatorship and during the conservatorship mortgage banks sold approximately $200 billion of fraudulently represented private-label mortgage-backed securities (PLS) where the mortgages backing many of the securities had characteristics that were substantially and materially different from what had been represented in securities filings. The GSEs did not have the loans underlying these securities in their possession and each GSE depended upon the issuer to transparently and accurately portray the mortgages backing the securities in marketing and sales materials as required under SEC laws. 17 banks were sued for the misrepresentation of those securities as well as similarly fraudulently represented loans and securities sold to the GSEs pre-conservatorship. And so, there are increased revenues due to the stricter GSE underwriting standards and fewer defaults.

So, how many billions in increased revenue are from the stricter GSE underwriting standards and fewer defaults?

And much of it was settlements with TBTF banks that were bludgeoned for misrepresentations.

How many billions of the total dividend payments paid are from legal settlements with the TBTF banks?

Enter the hedgies.

Which hedge funds are being referred to as entering and when did they purchase GSE preferred and common stock? Are hedge funds the only ones suing the US Government, US Treasury and FHFA? How many suits are hedge fund suits and how many are not hedge fund suits?