Thank you Clarence, I have read all of this very carefully. You are correct with respect for Freddie Mac. However, you will see that in the case of FNMA the APA requirements of the director of FHFA also apply to any new products issued under section 304 of the Charter act. This section includes the general corporate obligations, original Treasury backstop, prohibition of fees by US, and Treasury’s temporary purchase of obligations or securities. So clearly, The SPS is a new type of security product under section 304 with its commitment fee or charge of warrants in consideration of nothing and a variable LP based on how much money the GSEs used. A fee that violates the plain letter law of the very section 304 that prohibits such an abomination. These SPS products would never have made it past the public comment and rule making process. A clear violation of the APA by the regulator.
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