Fannie Mae-No Politics (FNMA)

[jacklanvo99]

Let the Sunshine of Disclosure Disinfect Fannie Mae Litigation

National Review - March 4, 2016 - March 8, 2016

By Saikrishna Prakash

In the coming days and weeks, federal judge Margaret Sweeney will rule on a motion to compel the federal government to disclose tens of thousands of documents sought by Fairholme Funds Inc. related to the federal conservatorship of Fannie Mae and Freddie Mac. The government’s attempt to shield these documents via a claim of executive privilege looks absurd, especially since the documents may reveal wrongdoing on the part of the Treasury Department. Let’s hope Judge Sweeney forces the government to turn those documents over.

The suit had its origins in 2008, when the federal government moved to prevent the collapse of the federally chartered enterprises Fannie Mae and Freddie Mac, which buy mortgage loans from banks and bundle them into securities that are sold to investors. This is aimed at helping to keep markets liquid so that banks can make more home loans. That year’s Housing and Economic Recovery Act provided Fannie and Freddie with billions in public funds and placed them in conservatorship under the authority of the newly established Federal Housing Finance Agency (FHFA), but did not eliminate the interests that private shareholders had in Fannie and Freddie. In 2012, when the companies began generating profits again, Treasury Department officials negotiated what has become known as the Net Worth Sweep. The Net Worth Sweep diverts nearly all net income from both enterprises to the Treasury. Thus Fannie and Freddie have sent over $241 billion to the Treasury, leaving Fannie and Freddie shareholders out in the cold.http://investorsunite.org/let-the-sunshine-of-disclosure-disinfect-fannie-mae-litigation/