Replies to post #750397 on Fannie Mae-No Politics (FNMA)

[Rodney5]

Barron, Both companies were not short AND the FHFA freely admitted the companies were adequately capitalized.

SECOND QUARTER CAPITAL RESULTS

Minimum Capital
Fannie Mae’s FHFA-directed capital requirement on June 30, 2008 was $37.5 billion and its statutory minimum capital requirement was $32.6 billion. Fannie Mae’s core capital of $47.0 billion exceeded the FHFA-directed capital requirement by $9.4 billion.

Freddie Mac’s FHFA-directed capital requirement on June 30, 2008 was $34.5 billion and its statutory minimum capital requirement was $28.7 billion. Freddie Mac’s core capital of $37.1 billion exceeded the FHFA-directed minimum capital requirement by $2.7 billion.

Link: https://www.fhfa.gov/mobile/Pages/public-affairs-detail.aspx?PageName=FHFA-Announces-Suspension-of-Capital-Classifications-During-Conservatorship-and-Discloses-Minimum-and-RiskBased-Cap.aspx

[Wise Man]

It wasn't a "change" but an addition to the Charter. Also, the PA isn't a "contract". You always "innocently" sneak the wrong words to see if it sticks.
An addition. This is why there are 2 UST backups of the enterprises in the Charter Act, and the one added with HERA confronts directly the provision PROHIBITION OF FEES AND CHARGES...., because Pelosi didn't even bother to add the new addition subsection (g) with unlimited yield obligations as an exception to this prohibition, like the original low cost borrowing right from UST, subsection (c). This is because you can't add as exception to a prohibition, a security that can have an infinite yield, for mental health reasons.

Evidence that this addition was meant for a Separate Account, it was never meant to become the prevailing rate on obligations purchased by the UST.
This is why the plotters always repeat that FnF are regulated by HERA, a law that amended the Charter Act and the FHEFSSA, and it has ended up with the ICBA basically claiming that FnF are regulated by the Purchase Agreement, calling for a resolution "based on the Preferred Stock Purchase Agreements", so that no one goes to the Charter Act and the FHEFSSA.
Other theme, the real reason of the 2nd amendment to the PA, 7 days before the December 31, 2009 deadline on the subsection (g) Authority of UST to Purchase Obligations and Securities, was meant to deceive us with the idea that the funding commitment was an exception to this deadline,

(4) TERMINATION OF AUTHORITY.—The authority under this subsection (g), with the exception of paragraphs (2) and (3) of this subsection, shall expire December 31, 2009.

because the exception paragraph (3) says FUNDING.
They succeeded during many years after reading the paragraph (3) many times, with complex legislative wording. But years later, I realized that it's not related to the Funding Commitment, but how the UST funds the purchases of obligations in FnF through issuance of Public Debt, because this FUNDING, appears always in any legislation that authorizes the UST to buy securities of an enterprise.
BOTTOM LINE
-The current funding commitment expired in December 2009, this is why we have always worked with the idea that the original UST backup of FnF (since the Charter's inception) is the prevailing one, because it's permanent. And the SPSPA updated de facto the obsolete $2.25 billion limit in the amount of funding commitment.
-The UST/FHFA gang uses the trick of increasing the SPS, when the authority of UST is about the purchase, to evade this deadline on the purchases. In the end, the UST hasn't purchased even one security during Conservatorship (not even the Warrant), which, by the way, corroborates the idea that the UST's investment today is an illusion. This is why we request a compensation, because it's a Securities Law violation: the SPS can't be increased, but issued and purchased.