Replies to post #752988 on Fannie Mae-No Politics (FNMA)

[Rodney5]

Quote: “(3) FUNDING.—For the purpose of the authorities granted in this
subsection, the Secretary of the Treasury may use the proceeds of the sale of
any securities issued under chapter 31 of Title 31, and the purposes for
which securities may be issued under chapter 31 of Title 31 are extended to
include such purchases and the exercise of any rights in connection with
such purchases. Any funds expended for the purchase of, or modifications
to, obligations and securities, or the exercise of any rights received in
connection with such purchases under this subsection shall be deemed
appropriated at the time of such purchase, modification, or exercise.” End of Quote

THE ABOVE TAKE NOTE:

PURCHASES,
WITH SUCH PURCHASES,
EXPENDED FOR THE PURCHASE OF,
CONNECTION WITH SUCH PURCHASES,
AT THE TIME OF SUCH PURCHASE.


SEC. 304 Purchase Obligations
Subsection (c)

$200,000,000,000 (two hundred billion dollars): This amount of money is construed as a commitment from the Treasury, a line of credit, backstop, this money was not used to purchase anything. What did the $200 billion buy? NOTHING

This money was not used to purchase obligations of Fannie Mae as permitted in the HERA legislation under terms as defined by the changes of the company's Charter Act by HERA.

The HERA legislation granted temporary authority to the Treasury to purchase obligations of the Enterprise, above the limits written in the Charter, (Charter limitation of 2.25 billion).

Therefore, the FHFA was not given authority by Congress to enter into contract with the United States Treasury in the amount of $200,000,000,000 (two hundred billion dollars): This amount of money is construed as a commitment from the Treasury, a line of credit, backstop.

Neither the Charter Act nor did HERA authorize the Treasury to charge a commitment fee on a line of credit to be paid by the Enterprise. The United States prohibition on assessment or collection of fee or charge to Fannie Mae, (section 304 Fee Limitation). Only Federal Reserve Banks are authorized to be reimbursed of fees, (section 309).

SEC. 304. SECONDARY MARKET OPERATION

Fee Limitation

Quote: “(f) PROHIBITION ON ASSESSMENT OR COLLECTION OF FEE OR CHARGE BY UNITED STATES.—Except for fees paid pursuant to section 309(g) of this Act and assessments pursuant to section 1316 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, no fee or charge may be assessed or collected by the United States (including any executive department, agency, or independent establishment of the United States) on or with regard to the purchase, acquisition, sale, pledge, issuance, guarantee, or redemption of any mortgage, asset, obligation, trust certificate of beneficial interest, or other security by the corporation. No provision of this subsection shall affect the purchase of any obligation by the Secretary of the Treasury pursuant to subsection (c) of this section.” End of Quote. Page 16

Only Federal Reserve Banks are authorized to be reimbursed of fees, (section 309).

SEC. 309. GENERAL POWERS OF GOVERNMENT NATIONAL MORTGAGE ASSOCIATION AND FEDERAL NATIONAL MORTGAGE ASSOCIATION

Federal Reserve Banks to Act as Fiscal Agents (Fannie Mae and GNMA)

Quote: “(g) DEPOSITARIES, CUSTODIANS, AND FISCAL AGENTS.—The Federal Reserve banks are authorized and directed to act as depositaries, custodians, and fiscal agents for each of the bodies corporate named in section 302(a)(2), for its own account or as fiduciary, and such banks shall be reimbursed for such services in such manner as may be agreed upon; and each of such bodies corporate may itself act in such capacities, for its own account or as fiduciary, and for the account of others.” End of Quote. Page 29

https://www.fanniemae.com/sites/g/files/koqyhd191/files/migrated-files/resources/file/aboutus/pdf/fm-amended-charter.pdf

https://www.congress.gov/110/plaws/publ289/PLAW-110publ289.pdf

[Barron4664]

Thanks kthomp19. Sorry, I was saying you were wrong about the liquidation preference not being able to be paid down because it is not allowed in its current form per the charter act. The LP can’t be paid down because it is not valid. It is a charge attached to the SPS and warrants to have access to funding if needed. It is a concrete life preserver. I am aware of section 3. The Funding, but I have come to the conclusion that these sentences only apply to taxpayer debt appropriated for valid purposes as is stated in the first sentence of Section 3. That is my issue. The purpose for the funding is listed in the sections prior to section 3. The purpose of the funding is for Treasury to purchase FNMA obligations or securities. The “Commitment” does not meet the purpose listed in the Charter. If these sentences you quote were listed as part of the purpose of the funding then I might agree with you. The Commitment is a violation of the very statute you quoted because it is nothing more than the establishment of a fund for the GSEs to borrow from, but at the cost (charge, fee) of the LP attached to 1 million shares of SPS. This is prohibited by the charter. Since congress has previously specified exemptions to the prohibition of fees for paying taxes and Treasury’s ability to purchase corporate obligations, then the absence of an exception for the temporary purchase of securities in section G means the form of funding through the commitment was not anticipated by Congress and thus not a legal appropriation of taxpayer debt. I have 6 years from the material change to the LP as agreed in 2019 to challenge the commitment in district court under the little tucker act. There doesnt seem to be a reason not to also challenge the original PSPA agreement just for the sake of arguing based on the supreme 9-0 ruling. Just a couple extra paragraphs, doesnt matter, as The Justice Departments policy on statute of limitations is valid since under their policy, the 2019 letter agreement creates a new injury. No one to my knowledge has challenged Treasury on the Charter Act yet, hoping for some traction there. Thanks for the response.