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#FannieGate, $fmcc, $fnma, Fannie Mae, FHFA, Freddie Mac, HERA, Melvin Watt
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).
Malvaney vs Watt: PSPA Trumped HERA Law
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.
Preferred Stock Purchase Agreement (PSPA)
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.
Brian said:
Who is the owner of this blog?
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Researcher said:
Read the About this Site at https://th717.wordpress.com/about/
It does NOT appear to be affiliated with the former Tim Howard blog, Tim Howard the soccer player blog or Tim Howard, the former CFO blog.
Recently when another site had issues and was blocked, locked and unavailable, this site appeared and it seems to support the mission of open and transparent discussion regarding GSEs like many other sites and message boards.
The reality is who knows who owns what blogs. Does it really matters? If it doesn’t meet your requirements, I would opt-out. For me, its a source of information until it’s not. In which case, I’m out of here.
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Dan W said:
Someone who isn’t so liberal that they continually avoid putting pressure on Obama despite the negative impact Obama is having on my private property rights.
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Anonymous said:
Why Does Sen. Isakson Want to Add $5 Trillion to the National Debt?
March 9, 2015
Right-wing purists will likely cheer recent calls by Sen. Johnny Isakson to liquidate Fannie Mae and Freddie Mac. That is, until they find out that the Senator’s new bill would assign all of the current liabilities of Fannie and Freddie – some $5 trillion – to the U.S. taxpayer, and dramatically increase our national debt.
Last month, without any fanfare, Isakson introduced S.1048, the Mortgage Finance Act. The bill would place Fannie Mae and Freddie Mac into receivership under the authority of a new government-controlled Mortgage Finance Agency. Isakson’s legislation envisions a new securitization program and a payback for the taxpayers over 10 years for their 2008 rescue of the GSEs. (Never mind the fact that Fannie and Freddie have already paid back in excess of $40 billion more than they were loaned).
The fact that these two companies currently own or guarantee about half of all U.S. mortgages, worth about $5 trillion is not insignificant. As receiver, the government would assume this massive portfolio. That sum is equal to about one third of nation’s GDP.
And aside from the question of how loading up the government with $5 trillion in obligations, Isakson’s bill should also raise concerns about future access to mortgages for millions of middle class Americans because it obliterates Fannie and Freddie without a credible alternative. Fannie and Freddie have made the dream of homeownership a reality for millions of Americans. Isakson wants to throw all of that away and replace them with an untested new securitization platform. Is this how to run for Governor of Georgia? We think not!
To find more Investor Unite blogs click here.
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About Investors Unite: Formed by Tennessee activist investor and CapWealth Advisors Chairman and CEO, Tim Pagliara, Investors Unite (www.investorsunite.org) is a coalition of private investors from all walks of life, committed to the preservation of shareholder rights for all invested in Fannie Mae and Freddie Mac. The coalition works to educate shareholders and lawmakers on the importance of adopting GSE reform that fully respects the legal rights of Fannie Mae and Freddie Mac shareholders and offers full restitution on investments.
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thombiz said:
Gretchen will have here hands full when she takes on two of the biggest philosophical spin doctors of all time. De Marco and Stegman are cut from the same cloth. They first develop an agenda then they build the “spin” around it to sell it. Gretchen can expose them for being architects of the largest breaches of the constitution in our time.
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Anonymous said:
David Sims,
If you are reading this, could you please record the U.S. Housing Reform Forum for the record and reposting it here for future reference.
Thank you very much.
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William R. Maloni Sr said:
Agree with Anon re “Ferrum.”
My question is, does anyone have the “Berkowitz list” of Treasury/FHFA officials who worked. If so, would you post it on 717’s blog, please.
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Anonymous said:
Click on the Sim On Finance YouTube link. In the middle of the recording Bruce name names.
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William R. Maloni Sr said:
Thanks/B
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Anonymous said:
The Implications Of The AIG Trial For Fannie Mae Shareholders – Charlie Harrison
Summary
Fannie Mae rose 15% on February 13, 2015, then 20% the next trading day, on volumes three and then five times the then 90 days average.
Fox News featured two reports on consecutive days attributing the share price and trading volume increases to the “Greenberg Trade”.
The “Greenberg Trade” is buying Fannie Mae anticipating an imminent result in the AIG trial which would have carry-over implications to Fannie Mae.
While buying Fannie Mae shares is a good idea, the Greenberg Trade is not a good reason.
It’s not even a good idea to buy AIG shares anticipating a favorable AIG trial result.
http://goo.gl/S9wghi
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Dan W said:
Additionally, this was never the reason. Nothing new happened with AIG to trigger the buying. It was Gretchen’s article inthe NYT that caused the buying.
The Fox News reporter sadly had no idea what he was talking about.
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Anonymous said:
Dan,
Charlie Harrison always writes excellent articles. He’s awesome.
http://seekingalpha.com/author/charlie-harrison/articles
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Dan W said:
I’m not familiar with him. If he was the one that came up with the “Greenburg Trade” explanation, he was extremely confused and grasping at straws at best, and trying to take credit away from Gretchen at worst.
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Anonymous said:
You need to read his article. Here’s an excerpt:
I would like to think the “smartest guys in the room,” hedge fund managers, are smarter than that. As a Fannie Mae investor, I looked into this in January. I concluded the AIG trial will have no impact on the Fannie litigation.
http://goo.gl/S9wghi
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Anonymous said:
This forum is going to be important to record.
Forum on Critical Thinking, Innovation and Leadership
U.S. Housing Financing Reform: Can we manage and control tax payer risk while assuring continued innovation in the market?
Tuesday, March 17, 2014 | Registration 8:00am | Program 9:00am – 12:00 noon | The Hotel Roanoke & Conference Center | LiveStream
The 2015 annual Forum will examine the causes of market weakness and possible solutions to restoring the vitality of the U.S. housing finance system while reducing taxpayers’ risk to potential future losses.
The U.S. housing finance system has not recovered from the traumatic shock of the 2008 collapse in home valuations and the large financial losses imposed on lenders, homeowners, and taxpayers. The credit crisis resulting from the collapse is often cited as the primary cause of the Great Recession in the United States.
Fannie Mae and Freddie Mac remain in government conservatorship, which effectively amounts to government ownership. Almost 9 of every 10 new mortgages are currently financed by the government. This practice is widely regarded as unsatisfactory, inefficient, and unsustainable, but efforts to enact reform have gotten little traction in the Congress to-date.
Questions for discussion include:
How would the Housing Finance Reform legislation now before the Congress reshape this vital market?
Should Fannie and Freddie be wound down? How? Are there legitimate concerns about the “taking” of property from Fannie and Freddie shareholders by the federal government?
Is the Government-Sponsored Enterprise (GSE) a useful form of public-private partnership for achieving public policy goals?
Is a federal back-up guarantee for mortgages necessary to preserve a liquid market and easy access to credit with 30- year fixed-rate mortgages?
What are the most effective means of increasing the “affordability” of housing? Is there a continuing role for FHA?
The 2015 Ferrum College Forum Panel of Speakers:
Edward J. DeMarco
Senior Fellow in Residence at the Milken Institute Center for Financial Markets and a Visiting Professor in the Owen Graduate School of Management at Vanderbilt University
Gretchen Morgenson
Assistant Business and Financial Editor and Columnist at the New York Times
Dr. Michael A. Stegman
Counselor to the Secretary of the Treasury for Housing Finance Policy
http://www.ferrum.edu/campus_life/events/forum_on_critical_thinking_innovation_and_leadership/
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