Fannie Mae-No Politics (FNMA)

[FOFreddie]

Thanks Guido

Wonder if his book is going to cover how the Senate Banking Committee's efforts to stabilize the GSEs were blown up by the UST and the NEC with the Nationalization Memo. Calabria was probably in the March 2008 Meeting between Shelby, Dodd, Paulson, Dick Syron and Daniel Mudd. Is his Book going to address the UST and NEC misconduct?

Here is Hank's Statement for 7/15/08 US Senate Banking Committee Hearing. Calabria was on the Senior Staff of Committee at this time. Shelby was Chair and Dodd Ranking Member

https://www.banking.senate.gov/imo/media/doc/071508PaulsonHMPTestimony.pdf

Hank stated:

Let me stress that there are no immediate plans to access either the proposed liquidity or the proposed
capital backstop. If either of these authorities is used, it would be done so only at Treasury’s discretion,
under terms and conditions that protect the U.S. taxpayer and are agreed to by both Treasury and the
GSE. I have for some time urged a broad range of financial institutions to raise capital and at Treasury
we have constantly encouraged the GSEs to do just that. In March, at my request, both the Chairman
and Ranking Member of this Committee hosted a meeting with me and the CEOs of the two GSEs
where they agreed to raise capital and you began the effort to move your GSE reform bill, which is now
hopefully about to be enacted with the modifications we are recommending today.

As I have said, we support the current shareholder-owned structure of these enterprises. Our plan
addresses current market challenges by ensuring, on a temporary basis, access to both liquidity and
capital, while also ensuring that the GSEs can fulfill their mission – a mission that remains critical to
homeowners and homebuyers across the country, especially during this housing correction."

Here is what was happening behind the scenes with emails between the UST Undersecretary - NEC Advisor- OFHEO Head and Daniel Mudd who was in Hong Kong trying to raise capital - Check out the email trail - the For Your Eyes Only Nationalization Memo - the set up meeting to fail with the Senator Shelby -

http://fcic-static.law.stanford.edu/cdn_media/fcic-testimony/2007-2008_Fannie_Mae_Timeline_and_Supporting_Documents.pdf

Hank set up the meeting in March to raise capital while his Undersecretary was blowing up the success of any capital raise. In May the GSES raised billions in new JPS an investors took Hank and the USG at its word that they supported GSE public ownership and that the GSEs were adequately capitalized.

The only true statement was that the GSEs were adequately capitalized.

Former Director Calabria was probably at this meeting as part of Shelby's staff - what did he know then and what does he think about it now? Is it in his book?