Quote: “That means FnF are not classified as "undercapitalized" as defined by 12 USC 4614, and therefore the restriction on capital distributions you quoted does not apply.” End of Quote
KT you can continue playing the smoke and mirrors game but we all know the truth. The FHFA freely admitted the companies were adequately capitalized; but Paulson intended to steal the companies and he took the companies over by theft.
SECOND QUARTER CAPITAL RESULTS
Minimum Capital
Fannie Mae’s FHFA-directed capital requirement on June 30, 2008 was $37.5 billion and its statutory minimum capital requirement was $32.6 billion. Fannie Mae’s core capital of $47.0 billion exceeded the FHFA-directed capital requirement by $9.4 billion.
Freddie Mac’s FHFA-directed capital requirement on June 30, 2008 was $34.5 billion and its statutory minimum capital requirement was $28.7 billion. Freddie Mac’s core capital of $37.1 billion exceeded the FHFA-directed minimum capital requirement by $2.7 billion.
'Deferred Tax Assets' the Treasury forced the companies to write down and record these non-cash expenses making the companies appear bankrupted. Fannie Mae and Freddie Mac were no where near bankrupted.
Therefore:
Fannie Mae and Freddie Mac's regulatory guidelines would have prohibited the companies form paying dividends to the Treasury while severely under-capitalized, but the FHFA suspended those guidelines because the regulator wanted the companies to have to draw more senior preferred stock from the Treasury to pay the annual dividends in cash, ballooning their outstanding senior preferred stock and increase their required annual dividends. FHFA and its Director are executive branch entities and can not make changes to federal laws. Only Congress can change the law.
