Fannie Mae-No Politics (FNMA)

[Wise Man]

Besides, in cash-out refinancings the only harmed parties are FnF.
22% of new acquisitions were cash-out refinancings during the latest boon in refinancings.
Therefore, we aren't talking just about a $200,000 worth of refinancing or so. The borrower can end the day taking home up to 80% of the value of the property in cash (80% LTV limit in the credit risk, under the Credit Enhancement clause of the Charter Act. Because there is no longer PMI, the loan is capped at 80%.)
FnF are a harmed party because the lender is using the collateral owned by FnF (the property) to back up this second-lien loan. So, it's doing business with an asset owned by FnF. More evidence of collateral scrapped pointed out in my prior comment. Collateral-sharing in this case, which is the same.
The thing is that the Charter Act allows FnF to do second-lien loans: "To lend on the security of a mortgage".
Even Freddie Mac stated:

We are not entitled to receive notification when a borrower obtains second-lien financing.

⚠️This is why the economic recessions and sluggish economic recoveries (Obama/Biden Administration) are very profitable for the banks. Massive business in cash-out refinancings using the collateral owned by FnF.
Then, it comes the fraud with robo-signing, like in the 2008 crisis. The banks are interested in foreclosure on the property fast, to protect their second-lien loans. So, the second becomes first to be paid. This happens when 2 entities do business using the same collateral.

The banks and the Federal Reserve, need a Socialist Administration (Trump, Biden, Obama,....) that slashes the concept of collateral of all sorts and other protections, like the Capital rules (small banks' "AOCI opt-out selection" written by regulation; Held-To-Maturity portfolios to don't record the unrealized losses on the Balance Sheets), seeking OFF MARKET deals years later, like the rogue Mnuchin a few days ago.

These are the screenshots of each Charter Act, allowing FnF to participate in the business of second-lien mortgages (lending activity).




And now, with the new proposal, the refinancings will attract the crème de la crème of corrupt attorneys, signing opinion letters like mad (robo-signing) to take the money and run, with FnF not even noticing it. They can take out 10 second-lien loans for the same collateral, refinancing the same mortgage loan in 10 different banks. They just need a "Fanniegate attorney". Leaving FnF with the risk if they self-insure.

To begin with, the Fanniegate attorneys and others peddling the government theft story in formal documents (books, articles, GSE slides, letters, court briefs and even personal blogs) will have to pay us Punitive Damages for deterrence.
$4.8B is just fine ($1.94 per $50 par value JPS and Cs. A 0.25% IRR)