Replies to post #746325 on Fannie Mae-No Politics (FNMA)

[HappyAlways]

UST and FHFA jointly changed the original 10% interest to “pay me all your income perpetually” in 2012. This amendment was called Amendment 3 - Net Worth Sweep. It was later disclosed that UST and FHFA knew that Fannie and Freddie would be hugely profitable and they did not want the twins to be free from their conservatorship. As a result, the twins paid $141B dividends to UST in 2012 for a loan of $191B. That’s 73% interest and clearly illegal, if there’s no NWS. Upto 2022, the twins had paid $330B to UST as interest. Yet, the loan balance is increased to $220B. It is a simple case of illegal taking of private property.

Shareholders failed in about 10 lawsuits, mainly because HERA specifically excluded shareholders the right to sue the twins. And, SCOTUS concluded that FHFA had the right to make all decisions even if the decision was a bad one. And, as long as the decision is beneficial to FHFA and the public interest it represents. But, SCOTUS ruled also that illegal taking is a fundamental right to general public, which cannot be denied by HERA. So, more lawsuits are filed so far with very little progress.

The theft is ongoing. The twins are making about $20B a year since 2012. Shareholders get nothing. UST gets everything. In recent years, UST and FHFA allowed the twins to keep some income to strengthen their capital positions. But, dollar-for-dollar the amount kept is added into their loan balance. In other words, UST still gets every single dollar the twins make, and shareholders has nothing.

Simple request is that NWS is illegal taking. UST and FHFA jointly implemented the NWS to steal from the shareholders. FHFA is a conservator who has the obligation to ensure the twins are conserved and preserved. Instead, FHFA helps UST to loot his conservatee.

[Vancmike]

Pleased to learn you got a reply. Others on the board have a good handle of the details. I'll post my suggested points on Saturday.

[Vancmike]

Key points for your upcoming phone conference:

FMNA and FMCC are private companies with a government charter. The conservatorship was based on fraud and deception. The manipulation of legal technicalities and legal gymnastics does not make theft acceptable. If this was done to any corporation, i.e. Apple or US Steal, perpetrators would be in jail. FHFA appointing itself as conservator is like having the fox watch over the hen house. The Net Worth Sweep lacked congressional oversight.

The big lies perpetuated by many in the government:

a. FNMA & FMCC caused the great recession. (False, FNMA & FMCC didn’t make loans, banks did)
b. The GSEs needed a bailout. (False, the GSEs had enough cash at the time of the takeover)
c. The GSEs were in a death spiral (False, The GSEs provided positive projections at time of the NWS)
d. Only greedy hedge funds will benefit from litigation. (False, millions owned the stock)

Key points:
• Housing represents approximately 20% of the economy.
• The GSEs hold over $8 Trillion in home loans, with a LTV over 50%.
• The GSEs do not need reform. They work well and there is no alternative
• FNMA & FMCC were coerced to take $191 billion dollar loan
• FNMA & FMCC have returned over $330 billion dollars to the Treasury
• FNMA & FMCC Far Exceed Dodd-Frank stress test in worst case scenario.
• Risk base Capital requirements of 2.5% are adequate, FnF are not banks

The Bureau's funding structure violates the Appropriations Clause of the Constitution and the separation of powers principles. The de-facto nationalization of Fannie and Freddie in 2008 was unjustified and a mistake.

FNMA & FMCC do not need to be in conservatorship for FHFA to oversee these well run companies.

Action Requested:
The congressional finance committee should assert and direct FHFA and have treasury declare:
1) The GSE loans as fully paid
2) Eliminate the warrants
3) Zero out the liquidation preference
4) Release Fnf through a consent decree, end the conservatorship
5) Restore the board of directors of FnF to self governance
6) Relist FnF on the New York Stock exchange
The above would end all law suits and provide significant revenue to the treasury through personal taxes. A win-win for the American people.

[Vancmike]

955 - curious, who is your congressman that got back to you?

[5bagger]

If Steil is your guy/contact(i.e.REP) talking points are:

Trump understood that shareholders were being screwed. He attempted to release them to know avail and ran out of time.

If DEM, point to Michael Capuano - who hit the nail on the head. Banks got 5%. GSEs got 10% and loan you couldn't pay back.

For both, this is unfinished business. Why/how can a conservatorship last 15 years?! If you refer to Brittany Spears and how a conservatorship can be diverted to the conservator, then it is clear that conservatorships are supposed to be temporary.

He/she should be asking questions: Why are they still in conservatorship.

You will have to use your short time wisely. Make it simple!

Then fill in the details and go on with other suggestions.

Hopefully, he/she says "Really, I wasn't aware. What can I do to rectify?"

Get with Financial Services Committee members.
Ask them if they have a plan to end c-ship.
Direct them to the old FMCC CEO who says the time is now.
Direct them to Mark Calabria's paper that said it was illegal.

GL!