Fannie Mae-No Politics (FNMA)

[Rodney5]

EternalPatience, yes, Don Layton has been anti GSE big time.

Layton, government appointed CEO Quote: “The Treasury was legally obligated to inject equity funds into the two companies so each would never have a negative net worth.” End of Quote.

No were in the Charter Act did Congress give the Treasury permission to provide a LINE OF CREDIT. Congress granted ONLY PURCHASE OF OBLIGATIONS (MBS).

https://investorshub.advfn.com/boards/read_msg.aspx?message_id=172771270

Layton, government appointed CEO Quote: “It is the general expectation that, upon exit from conservatorship by administrative means, the PSPAs would continue to provide financial support to the companies and there would then be an ongoing fee to compensate taxpayers for this risk. This fee remains unknown, as it has yet to be developed or specified by Treasury.” End of Quote

Administrative means to provide financial support by ongoing fee is not authorized by Congress.

Neither the Charter Act nor did HERA authorize the Treasury to charge a commitment fee on a line of credit to be paid by the Enterprise. The United States prohibition on assessment or collection of fee or charge to Fannie Mae, (section 304 Fee Limitation). Only Federal Reserve Banks are authorized to be reimbursed of fees, (section 309).

https://investorshub.advfn.com/boards/read_msg.aspx?message_id=172771127

The government appointed CEO of Freddie Mac repeats numerous times IMPLICIT in the article.

Explicit and Implicit

The Treasury was authorized by Congress a limit of $2.25 billion. This amount was increased by Congress in the Charter Act that was amended by HERA. The amount today $200 billion as of December 24, 2009, expired on December 31, 2009: and no more.

FEDERAL NATIONAL MORTGAGE ASSOCIATION CHARTER ACT
PURCHASE OF OBLIGATIONS BY TREASURY; CONDITIONS AND RESTRICTIONS

The Secretary of the Treasury shall not at any time purchase any obligations under this subsection if such purchase would increase the aggregate principal amount of the Secretary’s, then outstanding holdings of such obligations under this subsection to an amount greater than $2,250,000,000.

Link: https://www.fanniemae.com/sites/g/files/koqyhd191/files/migrated-files/resources/file/aboutus/pdf/fm-amended-charter.pdf

"The U.S. Government does not guarantee, directly or indirectly, our securities or other obligations." ... (Implicit is not worth the paper it WAS NOT WRITTEN ON).

The United States was not obligated after 1968 to back any debt of Fannie Mae. The United States Taxpayers became obligated when the government took over the two companies.

Originally, Fannie Mae had an explicit guarantee from the United States government; if the entity got into financial trouble the government promised to bail it out. This changed in 1968. Fannie Mae became a private stockholder owned company. Fannie Mae securities received no actual explicit or implicit government guarantee. This is clearly stated in the securities themselves, and in many public communications issued by Fannie Mae. (Other than a limit of $2.25 billion by the Charter Act).

Quote: “Although we are a corporation chartered by the U.S. Congress, the U.S. Government does not guarantee, directly or indirectly, our securities or other obligations. We are a stockholder-owned corporation, and our business is self-sustaining and funded exclusively with private capital. Our common stock is listed on the New York Stock Exchange and traded under the symbol “FNM.” Our debt securities are actively traded in the over-the-counter market.” End of Quote.

Information from: Fannie Mae form 10K Dec 31, 2007
part I, page 1, item 1.

https://www.fanniemae.com/sites/g/files/koqyhd191/files/migrated-files/resources/file/ir/pdf/quarterly-annual-results/2007/form10k_022708.pdf

With the passage of HERA Legislation: (purchase obligations increased with an expiration date of December 31, 2009).

SEC. 1117. TEMPORARY AUTHORITY FOR PURCHASE OF OBLIGATIONS OF REGULATED ENTITIES BY SECRETARY OF TREASURY.

The HERA legislation granted temporary authority to the Treasury to purchase obligations of the Enterprise, above the limits written in the Charter, (Charter limitation of 2.25 billion) up to the point in time of ‘‘(4) TERMINATION OF AUTHORITY.—The authority under this subsection (g), with the exception of paragraphs (2) and (3) of this subsection, shall expire December 31, 2009.

Link: https://www.congress.gov/110/plaws/publ289/PLAW-110publ289.pdf