Replies to post #780446 on Fannie Mae-No Politics (FNMA)

[FOFreddie]

Happy New Year CNorris2:

Dont you think it is important for the public to know the truth about the NEC/UST plans to Nationalize the GSEs and how they took private capital again with the NWS?

Here is an excerpt from the March 2008 Memo from the NEC to the UST proposing to Nationalize the GSES and 'wiping shareholders" :

[b]As shareholder capital gets wiped, the government will have no choice but to seize the company and
place it in conservatorship or receivership.[/b] Importantly, mortgage-backed security holders guaranteed
by Fannie Mae will see no losses. The government will likely allow debt holders to fare okay, with either
no or token losses, perhaps 1%.
Shareholders, both common and preferred, are likely to be left with nothing. However, these
shareholder losses have already been locked in by the company's credit decisions over the past few
years and cannot be helped. It must be remembered that Fannie is the biggest mortgage risk holder in
the biggest mortgage crisis.
A fully government-owned guarantor of mortgage debt might be exactly what is called for given the
current housing crisis. While various proposals have been floated to expand the FHA to meet this role, it
has neither the infrastructure nor the expertise to address the broader mortgage market. A nationalized
Fannie Mae would be refocused to directly address the various problems of illiquidity, affordability, and
sustainability in the mortgage market. Without the need to satisfy a fiduciary duty to shareholders,
Fannie might finally be able to perform its affordable housing mission in a helpful and proactive manner.

https://fcic-static.law.stanford.edu/cdn_media/fcic-docs/2008-03-08_Treasury_Email_from_Hason_Thomas_to_Robert_Steel_Re_Source_document_for_Barrons_article_on_FNM.pdf


A couple months after this Memo was written the UST stood by and let billions of JPS to be sold to unsuspecting investors who thought the UST wanted the GSEs to be viable. There was no disclosure on the Nationalization plans. Isnt it extremely wrong for the UST to stand by and let investors pay billions of dollars for newly issued JPS that the UST wanted to wipe out? Dont you think new investors should know how legacy GSE investors were actually treated by the UST? It probably is a risk factor that should be disclosed by the new Underwriters?

Dont you think that Congress should be fully aware of these actions by the GWB Admin and the BO Admin with the NWS?

[nagoya1]

With trolls like you spray painting gse malarkeys, there’s lots of paint for you to inhale. No need for you to spread your wisdumb any longer.

Fnma