Replies to post #782175 on Fannie Mae (FNMA)

[Wise Man]

CRTs are illegal in the Charter's Credit Enhancement clause, because it's not one of the 3 credit enhancement operations that FnF are allowed to consider.
The compromised (the 2012 acquittal by a DC judge explains his misbehavior: Berko's legal team, SCOTUS amicus brief, etc.) Timothy Howard drives us to a debate about the economic sense of these operations instead.
There is no debate. They are unlawful. Otherwise the conservator might argue that it's authorized to do it in its Incidental Power, which is correct, despite being a scam to spin revenues out of FnF at a time of capital building.


And, likely, a backdoor fee sent to UST due to Mnuchin's slogan "taxpayer be appropriately compensated", which is barred in the Fee Limitation clause of the Charter Act as well. Source.

This is why Sandra Thompson repeats that the CRTs are necessary "to protect the taxpayer", when the taxpayer doesn't bear credit risk in FnF to begin with.

Likewise, the PLMBSs were illegal too, due to the lack of one of the three Credit Enhancement operations enumerated in the Charter Act.

A Charter Act that is being concealed by everybody: the SCOTUS in the first place, that turned FHFA into the FHA by removing the constitutional "for cause" removal restriction of its Director, which now has turned the FHFA Director into a copycat who is mimicking the FHA commissioner, etc...

They are depriving "congressionally-charter private corporations" and "overseer" of their meaning.

For instance, the new product commingled securities (Resecuritizations or Catastrophic-Loss Reinsurance) is authorized in this clause number 3, as the collateral therein is 100% guaranteed against default by other guarantors.

It's been requested a refund of $18B in CRT expenses, net (turned into Retained Earnings), either because the UST has been the recipient of the funds or the DOJ as vicariously responsible of this breach of the Charter Act by the Federal Agency FHFA. Then, the DOJ will have to recover the funds from the CRT investors, if they really exist.