Fannie Mae-No Politics (FNMA)

[navycmdr]

In one deposition the former CEO of Fannie Mae,

Susan McFarland, explained that a week before the Third Amendment

was announced she reported to Treasury officials that the company

was "now in a sustainable profitability, that we would be able to

deliver sustainable profits over time."

Her optimism was guarded, but emphatic. "We were not there yet," McFarland added, "but. . . you could see positive things occurring. . . So when the amendment went into place, part of my reaction was that they did that in response to my communication of our forecasts and the implication of those forecasts, that it was probably a desire not to allow capital to build up within the enterprises and not to allow the enterprises to recapitalize themselves."

Another deposition suggests, at the very least, that government officials cannot keep their story straight.

Mario Ugoletti, formerly a special advisor to the Director of the FHFA,

contradicted a prior affidavit in which he stated that at the time of

the Third Amendment, the FHFA and Treasury believed that the GSEs'

deferred tax assets would not be released,

further impairing the companies' ability to return to profitability. However, when pressed on the issue during his deposition, Ugoletti stated simply, "I don't know what anybody else thought about it."