Wednesday, January 22, 2014

Treasury has talk, And I have talk.

from FT.com

http://www.ft.com/intl/cms/s/0/7a056cc0-839a-11e3-86c9-00144feab7de.html#axzz2rAl8jEGU

Mr Stegman

“Some stakeholders mistakenly argue that housing finance reform is no longer needed, that the GSE’s are so flush with cash . . . We could not disagree more.”


Mr Stegman said that recent results from Fannie and Freddie may “overstate the true financial conditions of the enterprises”. The two mortgage financiers have surged to profitability, allowing them to return billions of dollars to the US government which bailed them out and stalling efforts in Washington to wind them down.
However, Mr Stegman said that about $75bn of their combined income came from one-time tax reversals, while more than $20bn of income came from the release of provisions for bad loans and legal settlements related to mortgages.
More than half of the combined income from GSEs was generated through their vast investment portfolios, which the government wants them to cut from their current $1tn levels, he said. 
“At the time they went into conservatorship, the GSEs used their portfolios like hedge funds,” he added.
“Continuing the GSEs in a conservatorship is not the best framework for broadening the mortgage market over time,” he added.
Mr Stegman also said Treasury wanted to see new entrants in the housing market during the transition process of winding down the GSEs in order to prevent any disruption in the flow of housing credit.

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Now what I have to say to this:
75 billion on reversal is a LOSS they never should of took. TY FHFA for the huge loss in 2008 takeover of UNREALIZED LOSS. this was not needed, It was too much. Fannie and Freddie needed only 110 billion instead of 188 billion. NOW the 110 is with interest on 188 billion. see the problem with that? so lets say they needed 90 billion. And trust me that number is WAY more than they actually needed from treasury with out the 10% interest on the money. 
And the 20 billion was for the FRAUD committed by Banks on F&F. THIS REAL NUMBER WAS 200 BILLION. look to articles on how much bank fraud on Fannie and Freddie there was, and how much the dept of justice sued for. Ill tell you it was 200 Billion in Fraud from the BANKS of the USA and world sued by the FHFA as conservator for fannie and freddie. The FHFA was settling for 10 cents on the dollar with the banks. the other 180 billion was still FRAUD but FHFA let the banks off the hook. So if not for the Fraud by the banks, F&F would be north 100 billion and would never have needed a dime from the treasury. IF the FHFA would of got the true value of the fraud, F&F would never be in conservatorship. as far as the other 60 billion that F&F paid, that came off the backs of these two pillars of the USA mortgage markets hard work. And that money belongs to the SHAREHOLDERS of the two companies. The money the treasury wants is the 180 billion the FHFA let the banks off the hook for their FRAUD. 

If you mean that F&F invested their own money from their business in the markets, then yes, Like hedge funds. Hedge funds are no different than a mutual fund. They invest and try to turn a profit. This is normal for all companies. The FHFA speaks for F&F as far as HERA goes and the Treasury has no say in the GSE's.
The only thing being wound down is the GSE legacy book. NOT THE NEW BOOK which is 75% of these two business now. I still can read a 10-Q and I dont need to be FED misinformation from the US treasury about the fate or action of F&F. I fully understand that F&F were defrauded by the banks. FRAUD is still a crime? YES.
The bankers need to be held accountable. This is why the banks are all running from mortgages, they dont want this sham preformed on them next time they get caught with their hand in the cookie jar. Do you think the Banks want to be put in conservatorship and have their shareholders treated like they dont exist? NO they dont.


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