Fannie Mae-No Politics (FNMA)

[Rodney5]

Quote: “ There was an emergency: China and Russia had bought huge amounts of MBS from Fannie and Freddie” End of Quote

The emergency was not with Fannie and Freddie, but with Paulson bailing out his banker buddies!

Before the take down of the companies Treasury Secretary Paulson was unaware that the FHFA Regulator had sent both Fannie Mae and Freddie Mac letters saying the companies were safe and sound and exceeded their regulatory capital requirements. Paulson told FHFA Director Lockhart that he had to change his agency’s posture on the two companies, and FHFA did exactly that. FHFA sent each company an extremely harsh mid-year review letter, and two days later, Paulson, Lockhart and Fed chairman Bernanke met with the companies’ CEO's and directors to tell them they had no choice but to agree to conservatorship.

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.

HOUSING AND ECONOMIC RECOVERY ACT OF 2008 Page 2734 Twelve Conditions
APPOINTMENT OF THE AGENCY AS CONSERVATOR OR RECEIVER
Link: https://www.congress.gov/110/plaws/publ289/PLAW-110publ289.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.

Link: https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Announces-Suspension-of-Capital-Classifications-During-Conservatorship-and-Discloses-Minimum-and-RiskBased-Cap.aspx#:~:text=During%20the%20conservatorship%2C%20FHFA%20will%20not%20issue%20a,submit%20capital%20reports%20to%20FHFA%20during%20the%20conservatorship.

The FHFA forced Fannie Mae and Freddie Mac into a contract with the United States Treasury by Senior Preferred Stock. The Senior Preferred Stock Purchase Agreement is not a law: The SPSPA is an illegal contract between Treasury and FHFA as conservator of the two companies. The Charter Act, FHEFSSA and HERA passed by Congress is the supreme law of the land that governs the two companies.