Fannie Mae (FNMA)

[navycmdr]

Breaking IMF NEWS - MUST READ !!!

Short Takes: Maybe Fannie and Freddie were Solvent After All

Something to Think About ?

Wed July 18, 2018 ... By Paul Muolo ... [e-mail]



The U.S. Court of Appeals for the Fifth Circuit, which this week declared the structure of the Federal Housing Finance Agency unconstitutional, also had something interesting to say about the solvency of the GSEs during their darkest hour. On pages three and four of the “takings” case opinion, the judges note: “In 2007, the housing market collapsed, and the U.S. economy fell into a severe recession. At the time, Fannie and Freddie controlled combined mortgage portfolios valued at approximately $5 trillion – nearly half of the U.S. mortgage market. As essential players in the housing market, Fannie and Freddie suffered multi-billion dollar losses. Indeed, the GSEs lost more in 2008 ($108 billion) than they had earned in the previous thirty-seven years combined ($95 billion). Yet the GSEs remained solvent.” The key word is solvent…

The judges said, “Because they had taken a relatively conservative approach to the riskier mortgages that were issued in the years preceding the recession, they remained in comparatively sound financial condition. As a result, Fannie and Freddie continued to support the United States home mortgage system as distressed banks failed.” Some might jump on this opinion and ask the obvious: If they were solvent, then why were they taken over by the Treasury Department and the FHFA? Then again, judges are legal experts, not financial experts. In short, it's complicated...

(Complicated ? the BIGGEST GOVT CORRUPTION SCANDAL in U.S. HISTORY !!!)