Fannie Mae-No Politics (FNMA)

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Today, attorneys presented oral arguments in the appeal of U.S. District Judge Royce Lamberth’s September 2014 dismissal of investors’ claims that the Sweep violated the Housing and Economic Recovery Act. Lamberth threw out the suit on the grounds that HERA gave the government wide discretion in its role as conservator of Fannie and Freddie. What has become increasingly evident is the absurdity of thinking that the statute’s authority was so broad as to allow the government to do the opposite of what the law was enacted to accomplish – which is what the government seems to be arguing.

“We are confident that the government’s attempt to nationalize and loot the profits of Fannie Mae and Freddie Mac will not withstand judicial scrutiny,” said David H. Thompson, managing partner at Cooper & Kirk, who is among the attorneys who presented oral arguments today before a three-judge panel.

Earlier this week, documents unsealed in another shareholder suit over the Sweep exposed the fact that a central rationale put forward by the Government – that the Sweep was imperative to protect taxpayers from additional losses – is pure fiction. In fact, those documents show that government officials were well aware of the fact that Fannie and Freddie were about to return to robust profitability on the eve of the Sweep.

“The documents unsealed this week in the Court of Federal Claims contradict government testimony that the Third Amendment Sweep of 100% of the profits of the GSEs was a necessary response to the companies imminent ‘death spiral,’” said Investors Unite Executive Director Tim Pagliara.“The Government’s breath taking level of greed is a clear violation of law and an unconstitutional taking of private property.”http://investorsunite.org/governments-case-sweep-shaky-ground-beyond-crumbling-wall-secrecy/