This is nothing new but a review of the past.
I discounted the possibility that Obama, Congress, the Treasury and/or FHFA will help end Conservatorship and return the GSEs back to shareholders.
Federal Claims Court under Judge Sweeney is our best bet with a verdict in favor of the plaintiff to end Conservatorship and return the GSEs back to shareholders. As the case move forward in Judge Sweeney Court room with facts, documented evidence and depositions, chances of winning the case increases significantly.
Let’s examine where we are.
First, by invoking Presidential and/or Executive Privileges by DOJ in Sweeney’s Federal Claims Courts, it appears that knowledge and understanding reached the President, himself. It is quite clear, Obama blessed the agreement and approved the execution of the Third Amendment, the Net Worth Sweep. Without his approval, I don’t think Federal agencies like the Treasury, FHFA, SEC and DOJ would have moved forward and executed the Net Worth Sweep in violation of the Constitution, Fifth Amendment of the Taking Clause.
Note: According to U.S. Const. art. II, § 1, cl. 8.
[Before he enter on the Execution of his Office, he shall take the following Oath or Affirmation:–“I do solemnly swear (or affirm) that I will faithfully execute the Office of President of the United States, and will to the best of my Ability, preserve, protect and defend the Constitution of the United States.”]
Without insider information from the White House, it is clear that Obama is still focus toward winding down the GSEs along with other government agencies including but not limited to Treasury, FHFA and DOJ while Congress is unable to agree to an acceptable housing reform plan.
Last month, Bruce Berkowitz named names of former Treasury officials who worked at FHFA from the beginning and helped crafted the PSPA along with other Treasury officials with a purpose of Trumping the Statute. That is evidence we can use to prove that there was no arms length transaction between the two government agencies. These actors are probably the same folks who crafted the Net Worth Sweep.
Of course, Obama Administration knew about Treasury’s Goldstein memo about No Positive Income to Shareholders which was the real reason for the Sweep. The purpose of the 3rd Amendment was to set up the wind down and steal from shareholders while lining the Federal Budget with Billions of cash as it is still being done today. Again, this is a clear violation of HERA and the Constitution. Obama as well as other Senators and Representatives have said nothing to objective to this wrong doing. There might be several Senators and Representatives looking to right this wrong but there are too few and far between until more evidence are presented in discovery.
Mel Watt confirmed the unlawful activity by clearly stating the PSPA Trumped the Statute! Let’s think about and understand what that means. What Director Watt clearly stated was that 12 U.S.C. § 4617(b)(2) no longer applies. If you look that up, you’ll find that a large key part of the Conservator’s responsibilities are removed including preserve and conserve coupled with sound and safety. You can ignore the low income fund discussion portion because it’s irrelevant. In short, Treasury is in CHARGE which violates 12 U.S.C. § 4617(a)(7).
It is clearly stated in 12 U.S.C. § 4617(a)(7) that Conservator shall NOT be subject to the direction or supervision of any other agency of the United States but yet the PSPA clearly violated that. For one, the agreement restricts the Conservator from terminating the Conservatorship under section 5.3 of the agreement.
Again, the Preferred Stock Purchase Agreement (PSPA) placed many unlawful restrictions towards Conservator.
5.3. Conservatorship. Seller shall not (and Conservator, by its signature below, agrees that it shall not), without the prior written consent of Purchaser, terminate, seek termination of or permit to be terminated the conservatorship of Seller pursuant to Section 1367 of the FHE Act, other than in connection with a receivership pursuant to Section 1367 of the FHE Act.
[Section 6.12 is very interesting! Even though it states “Purchaser may, in its sole discretion, by written notice to Conservator and Seller, declare this Agreement null and void”
It clearly show another example of how one sided this agreement is. Only someone under the direction of Treasury would agree to those terms. Any reasonable person would not agree to those terms.]
6.12. Non-Severability. Each of the provisions of this Agreement is integrated with and integral to the whole and shall not be severable from the remainder of the Agreement. In the event that any provision of this Agreement, the Senior Preferred Stock or the Warrant is determined to be illegal or unenforceable, then Purchaser may, in its sole discretion, by written notice to Con- servator and Seller, declare this Agreement null and void, whereupon all transfers hereunder (including the issuance of the Senior Preferred Stock and the Warrant and any funding of the Commitment) shall be rescinded and unwound and all obligation of the parties (other than to effectuate such rescission and unwind) shall immediately and automatically terminate.