Tuesday, February 11, 2014

Treasury actually “invested” $161 bil, F&F have paid 185 bil

Bryndon ... thank you .... once again for all that you do ......
From pg 27  ..... seems like this alone could have changed everything .... 

"72. The Companies did not receive any consideration for agreeing to the Net Worth 

Sweep. Because the Companies always had the option to pay dividends “in kind” at a 12% 

interest rate, the Net Worth Sweep did not provide the Companies with any additional flexibility 

or benefit. Rather than accruing a dividend at 12% (which never had to be paid in cash), FHFA 

unlawfully agreed to make a cash payment of substantially all the Companies’ net worth each 


Also If we had paid dividends in kind  .....  then starting half way down on page 20 ..... But not for the bogus claims that the GSE's would need to draw many more billions of dollars ....  we might have been able to reduce the debt to approximately $161 billion

"reflected actual credit-related losses. To date, the Companies have drawn a total of $187 billion 

from Treasury, in large part to fill the holes in the Companies’ balance sheets created by these 

non-cash losses. Including Treasury’s initial $1 billion liquidation preference in each Company, 

Treasury’s liquidation preference for its Government Stock amounts to approximately $117 

billion for Fannie and approximately $72 billion for Freddie. Approximately $26 billion of these 

combined amounts were drawn simply to pay the 10% dividend payments owed to Treasury. (In 

other words, FHFA requested draws to pay Treasury this $26 billion in cash rather than electing 

to pay the dividends in kind. Had the dividends been paid in kind, FHFA would not have had to 

draw from (and, consequently, reduce the remaining size of) Treasury’s commitment to pay 

them.) Thus, Treasury actually “invested” approximately $161 billion in the Companies, 

primarily reflecting changes in the valuation estimates of assets and liabilities."

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