Fannie Mae-No Politics (FNMA)

[Rodney5]

“They were supposed to just purchase 191 billion of GSE obligations, MBS, or equities. That is what HERA authorized.”

That’s true but only on condition of emergency. When Fannie Mae and Freddie Mac were taken over by the FHFA no emergency existed and the FHFA had no authority granted by Congress to take over the companies, no authority written in the Charter Act that gave the FHFA right to take down the companies.

Charter Act: SUBSECTION (g) TEMPORARY AUTHORITY OF TREASURY TO PURCHASE OBLIGATIONS AND SECURITIES; CONDITIONS.— EMERGENCY DETERMINATION REQUIRED. Page 16

Under this subsection no emergency existed.

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

The FHFA freely admitted the companies were adequately capitalized.

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.

When Paulson met with the directors of Fannie Mae and Freddie Mac to inform them of his intent to take over their companies, neither entity met any of the twelve conditions for conservatorship spelled out in the newly passed HERA legislation. Paulson since has admitted he took the companies over by threat.