Replies to post #740344 on Fannie Mae-No Politics (FNMA)

[kthomp19]

Please, not this crap again.

Tim Howard debunked this narrative several years ago. Tim Howard dug into FnF's own financial documents and found zero evidence; in his words:

This report of “$40 billion per month in toxic mortgage purchases ordered by Treasury” has been given wide circulation, but it’s mythical.

...

There is absolutely no evidence that Fannie Mae purchased toxic loans post-conservatorship, yet continued references to this myth, including by SCS, perpetuate it, which is not helpful.

If you have actual evidence, provide it. That Bloomberg article doesn't count. Otherwise please stop perpetuating this myth. Falsehoods don't do any of us any good here.

[bobstruths]

Thank you! That is what I was looking for. I'm trying to determine if Treasury directed FnF to buy underperforming mortgages and then made FnF eat the losses them when they went bad. Larry Summers seems appropriate for being in the middle of this because he is noted for saying the Treasury was "working in STEALTH" with the TARP program and with mortgage bonds. I do remember that Treasury was purchasing a lot of the mortgage bonds FnF were correcting and returning to market. And, it appears FnF were creating losses for themselves by following Treasury's guidance to discount the price of the bonds they were producing for Treasury to buy.

[955]

Distinctly remember Paulson/Bush Admin announcement ordering GSE's to buy up all under-performing mortgage bonds in order to restore calmness to the housing markets. Was like Sept/Oct 2008 timeframe. VW short squeeze was happening about the same time. Just because TH claims no record of it in the books doesn't mean it didn't happen. Many ways to skin a cat without it appearing in the books.

[Wise Man]

FnF buy back non-performing loans from their MBS Trusts. Once they are in their Retained Portfolio, they start the Foreclosure Prevention Actions.
It's not that FnF bought non-performing loans from the banks.
Their delinquency rates in early conservatorship are the evidence, specially Freddie Mac with a disproportinate low rate.