Fannie Mae-No Politics (FNMA)

[Rodney5]

HERA AUTHORIZED PURCHASE OF OBLIGATIONS NOT PROVIDE AN INSURANCE POLICY

FROM THE FEDERAL ACCOUNTING STANDARDS ADVISORY BOARD

QUOTE: “This area generated the most discussion because it was part of the overall liquidity agreement. In return for the senior preferred stock and common stock warrants, Treasury agreed to provide up to $100 billion ($100 B) to each GSE based upon quarterly payments if liabilities exceed assets. After significant internal Treasury discussions, it was concluded that this looked like a guarantee or insurance policy page 18

As a result, different components of the agreement are treated as either entity or nonentity transactions (Please refer to the attached Treasury letter dated August 24, 1998 for related details).
Classification of GSE-related and ESF Money Market Fund Insurance Transactions as Entity or Non-entity. Page 19” End of Quote

Link to page 18-19

https://investorshub.advfn.com/boards/read_msg.aspx?message_id=173695132


The Charter

The Treasury was authorized by Congress a limit of $2.25 billion to purchase obligations. The $2.25 billion was the explicit obligation. Page 14

NOTE: to purchase obligations NOT A $200 billion line of credit ( Insurance Policy) attached to the Senior Preferred Stock.

The amount was increased by Congress in the Charter Act that was amended by HERA to purchase obligations but only under emergency conditions, no emergency existed. Page 16

The amount today $200 billion as of December 24, 2009, expired on December 31, 2009: and no more. The $200 billion commitment ( Insurance Policy) was forced on the GSEs by the FHFA / Treasury by the illegal contract the SPSPA. The GSEs never needed a capital infusion, both Fannie and Freddie were adequately capitalized.

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. Page 14

Charter
Link: https://www.fanniemae.com/sites/g/files/koqyhd191/files/migrated-files/resources/file/aboutus/pdf/fm-amended-charter.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, ( Not an Insurance Policy), 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.

HERA Section 1117

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