Fannie Mae-No Politics (FNMA)

[obiterdictum]

The US Treasury needed a way to move money into and out of the GSEs. The could have used a loan with a repayment with interest. However, a loan wans not used. A loan would have to go on the OMB Executive Budget and watched for repayment. That would increase the national debt and there could be no certainty that it would be repaid.

The US Treasury and Bush Administration decided to engineer the means to that end of getting money in and out through making an investment. The US Treasury purchased Senior Preferred Stock with an agreement to receive 10% dividends quarterly from that stock along with a warrant for 79.9% of the common stock in both GSEs at a nominal price of .00001 per share. The liquidation preference of the stock would increase every time a draw on the Treasury was made by the GSEs.

Money was invested with an expectation for a return. There is nothing here related to the takings clause of the fifth amendment. It is seemingly a business investment transaction between the US Treasury and the GSEs in conservatorship.

In August 2012, however, that business transacton was altered and allegedly turned into a taking of private property without just compensation when a 3rd amendment to the PSPAs made it possible for the US Treasury to perform a sweep of all net profits less a 3 billion capital reserve that would gradually be diminished by 600 million every year till it was zero in 2018. This became a capricious, oportunistic and problematic move made when it was abundantly clear that the GSEs were turning out huge profits in 2012.

The GSEs by their federal charter and incorporation are still privately held shareholder companies with a public mission and having preferred and common stocks trading on the market. The companies and their assets and profits rightfully belong to the current shareholders. Dividends are due to the shareholders from such profits. Also, the value of the shares has diminished due to these actions done by the US Treasury and the FHFA. So lawsuits lawsuits have been filed to vacate the 3rd amendment and to deliver just compensation for property taken and share value lost from the pre-2008 hosuing collapse to the present moment.

Given these facts, how does does the takings clause of the 5th amendment turn the GSE draws or dividends and net sweep into a loan?