March 29, 2015 Summary
It is quite clear that both the Legislative and Executive Branches are not going to do much in the next two years to address the GSEs Conservatorship debacle. It’s all politics and “We the People” will suffer from the portfolio wind down terms within the PSPA. Presently, many in the Legislative Branch want to hide the truth like Ed Royce and placing huge risk towards “We the People” while others like Blackburn and Capauno want to do the right thing and fix the problem before “We the People” encounter another financial crisis. Going forward, the Legislative Branch expects Treasury and FHFA to resolve the GSEs Conservatorship but both agencies claim it is the responsibility of the Legislative Branch. The responsibility was clearly spelled out in the HERA Statute which Treasury and FHFA collaborated and trumped in 2008 with the creation of PSPA.
The Obama Administration wants to clearly expropriate as much funds as possible from the GSEs before they end their term in 2016. It’s so obvious that they want to pass the problem to the next Administration regardless if it is Democrats or Republicans. Obama doesn’t care to protect and defend the Constitution but rather pass the buck to the next Administration while stating that the Legislative Branch should resolve the GSEs Conservatorship.
Judicial Branch is the only hope for real justice. So far, Federal Claims Court under Margaret Sweeney is displaying real justice towards “We the People” by allowing discovery to continue. She seems to be seeking the truth while cutting through the trickery (BS) from the defendants.
Your Honor, Judge Sweeney is showing no fear towards the Administration and other government agencies.
On March 31, 2015, Judge Sweeney will be conducting another Status Conference Call. Plaintiffs are seeking to begin deposition sooner rather than later while Defendants are seeking more delay. It’s clear; Defendants are trying their best to hide the truth and delay access to evidence and facts.
It appears that Congressmen and Senators are starting to understand the 2008 Financial Crisis’ sequence of events resulting towards the GSEs Conservatorship. With the knowledge of the truth, evidence and facts, Congressman Blackburn and Congressmen Capauno introduced Bills seeking to correct the wrongs from the previous legislative action.
From the most recent hearings under oath, Capuano grilled Jack Lew, Secretary of Treasury and confirmed that the purpose of the Net Worth Sweep was to support the General Fund Budget while Mulvaney questioned Melvin Watt, and confirmed that PSPA trumped “violated” the HERA Statute as soon as FHFA invoked the Conservatorship. It is clear that Jack Lew is waiting for the Obama Administration to provide direction of what to do with the GSEs according to the testimony during the most recent hearing.
Senator Shelby is also seeing the light knowing that there are no other alternatives than returning GSEs back to their rightful owners. Senator Shelby was quoted:
“My God, we might as well leave them where they are if we’re going to do that,”
“I don’t know if we would do anything in the area of Fannie Mae and Freddie Mac,’’
“We’ll see what’s doable. I don’t want to do something to make it worse than it is.”
Links references provided below:
H.R.1673 – To amend the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 to establish a secondary reserve fund for a housing enterprise under conservatorship to protect taxpayers against loss in the event of a housing downturn, and for other purposes
Senator Richard Shelby of Alabama speaking at a U.S. Chamber of Commerce conference in Washington, said he opposes replacing Fannie Mae and Freddie Mac with a system that includes a government guarantee for mortgages.
From January’s 2015 Obama Arizona visit, Obama clearly stated, “I’ve called on Congress to wind down the government-backed companies known as Fannie Mae and Freddie Mac.” (No applause)
In late March of 2015 at the National Council of State Housing Agencies Legislative Conference, Dr. Michael Stegman described the Obama Administration hidden agenda from trumping HERA statute while saying the responsibility to end the Conservatorship is through Legislation. The truth and facts is that the responsibility has been clearly spelled out in HERA. However, in 2008, Treasury and FHFA, Conservator managed to “Trump” the law with the PSPA according to Melvin Watt. See above reference.
Counselor to the Secretary for Housing Finance Policy Dr. Michael Stegman, speaking at Monday’s National Council of State Housing Agencies Legislative Conference, said:
“I know that many of you want to know where we are on housing finance reform. On this subject, let me be clear: the Administration stands by our belief that the only way to responsibly end the conservatorship of Fannie Mae and Freddie Mac is through legislation that puts in place a sustainable housing finance system that has private capital at risk ahead of taxpayers, while preserving access to mortgage credit during severe downturns.”
Apparently, U.S. District Court was not bold enough to address the filed complaint. Most watched was the Perry Case in Judge Royce Lamberth court where he granted the motion to dismiss. This case has been filed with the Appeals Court.
Judge Margaret Sweeney in the Federal Claims Court is allowing Fairholme, Plaintiff to forge ahead with discovery under protective order. US Federal Claims Court under Judge Margaret Sweeney shows no fear in seeking the truth and justice.
After March 31, 2015, we shall know where we are with Discovery in the Fairholme Case. The expectation is that Judge Sweeney will continue to allow Plaintiffs to move forward to seek evidence to address the Motion to Dismiss.