Fannie Mae-No Politics (FNMA)

[Robert from yahoo bd]

"Susan McFarland (who as Fannie Mae’s Chief Financial Officer had met with
Treasury on August 9, 2012) testified:
So when the amendment went into place, part of my
reaction was 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."

"84. After lawsuits were filed challenging the Sweep Amendment, the Agency
attempted to offer pre-textual justifications. In a declaration the Agency submitted in
proceedings in the United States District Court for the District of Columbia, Mr. Ugoletti
claimed that the Agency had agreed to the Sweep Amendment due to concerns that the burden
of paying the 10% dividend owed to Treasury might reduce the amount of Treasury’s
commitment that remained available to the Companies. As noted above, however, Treasury
knew that the Companies could pay the dividend “well into the future even with the caps,”
and projections available to both Treasury and the Agency indicated that the Companies
would have more than sufficient funding through 2022. (As of the beginning of 2013, Freddie
Mac had over $140 billion still available on its commitment from Treasury, and Fannie Mae
had over $117.6 billion.) In fact, in an internal mark-up of a document explaining the
reasoning for the sweep, a Treasury official wrote that the argument that the “10 percent
dividend was likely to be unstable as the businesses were reduced” “[d]oesn’t hold water.”"