Fannie Mae-No Politics (FNMA)

[Rodney5]

Straight from the Treasury Secretary’s mouth and the Federal Reserve Board with no reservations plainly stating the companies would be used to help prop up the housing market.

Paulson said it best himself, when he told the Financial Crisis Inquiry Commission, “[Fannie and Freddie], more than anyone, were the engine we needed to get through the problem.” Treasury needed Fannie and Freddie to help keep the financial system afloat, and it simply took them, under pretense of a rescue. (nationalized)

The Federal Reserve’s program purchased MBS issued by the GSEs. Putting aside toxic or not the Treasury / Federal Reserve freely admitted the GSE's were used to help prop up the housing market.

It’s been argued the GSEs did not purchase toxic securities, (worded toxic or not), will not void the fact the GSEs were used to funnel purchases made by the companies to the fed.


Evidence
From Board of Governors of the Federal Reserve System
95th Annual Report 2008

Quote: "since the November 25 announcement of the Federal Reserve’s program to purchase MBS issued by the housing GSEs and Ginnie Mae, and they currently stand at 5 percent." End of Quote page 19

Link: https://www.federalreserve.gov/boarddocs/rptcongress/annual08/pdf/AR08.pdf


Quote: "It's a big event that the Federal Reserve is offering to buy up nearly 10% of the agency mortgage market," said Art Frank, a mortgage strategist with Deutsche Bank Tuesday morning, the Federal Reserve announced that it would buy up to $500 billion of mortgage bonds guaranteed by Fannie, Freddie and Ginnie Mae, providing the ultimate support to prop up the $4.8 trillion market of these securities. The central bank also will buy $100 billion of the mortgage finance companies' debt securities, including that of the Federal Home Loan Bank, through reverse auctions starting next week. So far, other initiatives to prop up the market including a plan to have both the government-sponsored enterprises buy nearly $200 billion of these bonds and the U.S. Treasury's unlimited purchase of these bonds have done little to stop the weakening of risk premiums on mortgage bonds. As a result, mortgage rates have remained at elevated levels with little relief to consumers." End of Quote

Link: https://investorshub.advfn.com/boards/read_msg.aspx?message_id=33791597