Fannie Mae-No Politics (FNMA)

[obiterdictum]

Yes. So far, Delaney, Carney and Himes are not in the shareholders corner and a letter to the editor of the Wall Street Journal signed all three heartily supports the third amendment and decries the attempt to modify or vacate it.

The text of the letter in Monday’s, March 11th, Wall Street Journal:

David Skeel's “Now Uncle Sam Is Ripping Off Fannie and Freddie” (op-ed, Feb. 28) argues for a renegotiated agreement between the government and the companies' shareholders.

We have outlined a housing reform package that creates a new housing finance system including a path for Fannie Mae and Freddie Mac to be sold. But under no circumstances should the government modify its current deal with Fannie and Freddie until Congress passes comprehensive housing-reform legislation.

To do so would be turning the clock back on reform and an injustice to the American people. Fannie and Freddie failed in 2008, and the government stepped in and explicitly guaranteed $4 trillion of debt and obligations and injected $187 billion of equity. Taxpayers assumed a staggering obligation equal to 48 times all annual Social Security payments. In exchange for this unprecedented level of support, the government negotiated a deal that allowed it to ultimately take all of the profits of the companies. Given the extraordinary level of government support, this deal seems fair to us. Now that the companies are profitable and have paid significant sums back to the Treasury, Fannie and Freddie shareholders want to change the deal.

We believe Fannie and Freddie could have a future once we agree on comprehensive reform that creates a stable system and safeguards against abuse, mispricing of risk and financial calamity. But until that future is agreed to by Congress, or unless the Supreme Court were to rule otherwise, those of us in government should stand firmly with the American taxpayer rather than renegotiate the agreement.

Rep. John K. Delaney (D., Md.)
Rep. John Carney (D., Del.)
Rep. Jim Himes (D., Conn.)