Fannie Mae-No Politics (FNMA)

[Rodney5]

Thank you, Vancmike,
Did you receive any response from Mr Hill?

https://investorshub.advfn.com/boards/read_msg.aspx?message_id=172673244

Vancmike
Re: None
Thursday, 08/24/2023 9:05:23 AM


This letter represents the thoughts of thousands of interested voters, throughout the United States, who regularly participate and post on INVESTORSHUB, FNMA website. My letter also posted.


August 24, 2023

Mr. French Hill, United States Congressman
1533 Longworth House Office Building
15 Independence Ave SE
Washington, DC 20515

Subject: Urgent Review Required – FHFA and the Conservatorship of Fannie Mae and Freddie Mac

Dear Congressman Hill,

I extend my greetings to you as a distinguished Vice-Chairman of the House Financial Services Committee, and a renowned businessman. I trust your comprehensive understanding of financial systems and the vital role of housing within the United States.

I write to address a longstanding concern that has negatively impacted Fannie Mae (FNMA) and Freddie Mac (FMCC) shareholders for more than fifteen years – the overreaching actions of the Federal Housing Finance Agency (FHFA) and the extended conservatorship. This issue has not only affected countless Americans but also has implications for the broader financial landscape.

In light of your exceptional insight into these matters, I am confident you are aware of the magnitude of the problem. The shareholders of FNMA and FMCC, including millions of American citizens who have invested directly or indirectly through mutual funds and pensions, have endured substantial financial losses. Families have seen their retirement savings, children's education funds, and future financial security erode as a consequence of these circumstances. Moreover, the actions taken have had a ripple effect, causing community banks to suffer losses due to government actions and misleading statements.

It is disheartening to observe the conservatorship of FNMA and FMCC was initiated without adherence to the mandated conditions outlined in the HERA legislation. The Treasury Secretary at the time, Hank Paulson, conceded the takeover was coerced, deviating from the principles of fairness and transparency, that underlie our financial system. The terms of the agreements reached were not only abusive, but also fiscally unviable, a fact that any reasonable individual, particularly one with your background, can attest to. Morgan Stanley's CEO told Ben Bernanke, "We'll go down in flames before I agree to these terms!"

Recent developments, such as the verdict in the first district Federal Court regarding the Net Worth Sweep, have brought attention to the injustice suffered by shareholders. The jury's ruling confirmed the violation of the "Implied Covenant of Good and Fair Dealing", leading to a substantial award of damages amounting to $612 million.

Of particular concern is the impact of the "Net Worth Sweep," implemented by acting FHFA director Ed DeMarco. This amendment unilaterally altered the repayment terms, resulting in an exorbitant 100% of net worth to be paid back quarterly, indefinitely. This approach is fundamentally at odds with the purpose of conservatorship, which is to facilitate the recovery of FNMA and FMCC to sound financial health.

Numerous infractions of federal regulations and laws have occurred under FHFA's oversight, casting a shadow over the integrity of the conservatorship. An alarming instance is the blatant violation of Code of Federal Regulation 1237.12, which explicitly states that capital distribution is prohibited while under conservatorship. Ed DeMarco's admission, under oath, he unilaterally diverted over $300 billion to the Treasury, without consultation, is a stark reminder of the extent to which the original goals of the conservatorship have been disregarded.

The consequences of FHFA's actions have extended beyond shareholders. Homeownership for hard working middle class American Families has become more expensive due to inflated commitment fees and a tripling of Guarantee Fees on mortgages, directly impacting citizens seeking to establish stable residences.
Moreover, the unprecedented expansion of FHFA's workforce raises pertinent questions. The number of employees has tripled, an anomaly when compared to well-operated entities like FNMA and FMCC, as noted by Warren Buffet, who stated it would only require a handful of people for oversight responsibilities.

As a steward of the House Financial Services Committee, I urge you to pose essential questions to FHFA regarding the Net Worth Sweep:
1. Did the Net Worth Sweep enhance risk-based capital levels? NO
2. Did it contribute to long-term financial stability? NO
3. Was the NWS in the interest of the regulated entities? NO
4. Was it in the public interest? NO (Taxpayers bear the liabilities).

It is abundantly clear the Net Worth Sweep failed to achieve rehabilitative effects and directly contradicted the FHFA Director's responsibility to safeguard assets.
Curiosity persists regarding the rationale behind sealing 11,000 documents and emails regarding FHFA by President Obama. The claim of "national security" warrants further scrutiny and demands transparency.

The attached charts, illustrating the staggering financial transfers from FNMA and FMCC to the Treasury under the Net Worth Sweep, emphasize the severity of the situation. A comprehensive analysis underscores Treasury's gains are far in excess of a reasonable estimate, and the ongoing senior preferred dividend payments could have been avoided.

FHFA Director Sandra Thompson's assertion of willingness to collaborate on housing finance reform raises concerns. It is my perspective this stance masks a reluctance to take decisive action.

Recent Dodd-Frank stress tests affirm FNMA and FMCC's profitability even under extreme economic conditions.

I advocate for the House Financial Services Committee to assert its authority and release FNMA and FMCC from conservatorship. This step would nullify ongoing legal disputes and prompt FHFA to return to its fundamental operational and oversight role. The reforms undertaken by both companies position them for a responsible transition.

I propose a Congressional inquiry into the litany of FHFA and conservatorship violations, further underscoring the urgency of the situation.

I beseech you to utilize your influence to effect change and uphold the interests of American taxpayers.

I am confident that your attention to this matter will yield significant benefits. The implications of your actions extend beyond the housing market, impacting the economy and the lives of countless citizens.

Sincerely,