Friday, December 19, 2014

The truth shall be told. FHFA (a) Appointment of the Agency as conservator or receiver

Under title 12, the department of justice is telling the court that The FHFA has the power to Wind up Fannie mae and Freddie mac under the hat of the conservator. The DOJ is using this statute as its only method of proving this and has told countless judges read the statute!

I got news for the DOJ they are wrong and hopefully a very astute judge will see it!
here is why the DOJ is wrong and the FHFA is operating outside of HERA title 12!

1.section (a) is for the appointment of FHFA as conservator OR receiver. This section is only for appointment! section a does not give powers or duties definition!

12 U.S. Code § 4617 - Authority over critically undercapitalized regulated entities
(a) Appointment of the Agency as conservator or receiver
(2) Discretionary appointment
The Agency may, at the discretion of the Director, be appointed conservator or receiver for the purpose of reorganizing, rehabilitating, or winding up the affairs of a regulated entity.

Under section (a) (2) it does not give power to the conservator or receiver! It simply gives the LAW for the APPOINTMENT of one or the other! Thats it! Nothing else. Section (a) is about appointment, not power.

We know that Fannie is under conservatorship, NO ONE DISPUTES THIS, not FHFA or the DOJ! Also this information is on FHFA website!
http://www.fhfa.gov/Conservatorship
Why Fannie Mae and Freddie Mac are in Conservatorships
Fannie Mae and Freddie Mac are in conservatorships to preserve and conserve their assets and property and restore them to a sound financial condition so they can continue to fulfill their statutory mission of promoting liquidity and efficiency in the nation's housing finance markets.  
Right from the horses mouth!

2. section (b) gives power to conservator or receiver! Once (a) gives appointment of (b) gives power!
This is how laws are written, they are not cherry picked for use by FHFA to do what it wants!

12 U.S. Code § 4617 - Authority over critically undercapitalized regulated entities
(b) Powers and duties of the Agency as conservator or receiver
(A) Successor to regulated entity
The Agency shall, as conservator or receiver, and by operation of law, immediately succeed to—
(i) all rights, titles, powers, and privileges of the regulated entity, and of any stockholder, officer, or director of such regulated entity with respect to the regulated entity and the assets of the regulated entity; and
(ii) title to the books, records, and assets of any other legal custodian of such regulated entity.
(B) Operate the regulated entity
The Agency may, as conservator or receiver—
(i) take over the assets of and operate the regulated entity with all the powers of the shareholders, the directors, and the officers of the regulated entity and conduct all business of the regulated entity;
(ii) collect all obligations and money due the regulated entity;
(iii) perform all functions of the regulated entity in the name of the regulated entity which are consistent with the appointment as conservator or receiver;
(iv) preserve and conserve the assets and property of the regulated entity; and
(v) provide by contract for assistance in fulfilling any function, activity, action, or duty of the Agency as conservator or receiver.
(C) Functions of officers, directors, and shareholders of a regulated entity
The Agency may, by regulation or order, provide for the exercise of any function by any stockholder, director, or officer of any regulated entity for which the Agency has been named conservator or receiver.

(D) Powers as conservator
The Agency may, as conservator, take such action as may be—
(i) necessary to put the regulated entity in a sound and solvent condition; and
(ii) appropriate to carry on the business of the regulated entity and preserve and conserve the assets and property of the regulated entity.
(E) Disposition of assets
In exercising any right, power, privilege, or authority as conservator or receiver in connection with any sale or disposition of assets of a regulated entity for which the Agency has been appointed conservator or receiver, the Agency shall conduct its operations in a manner which—
(i) maximizes the net present value return from the sale or disposition of such assets;
(ii) minimizes the amount of any loss realized in the resolution of cases; and
(iii) ensures adequate competition and fair and consistent treatment of offerors.

That is All the powers of conservator! All powers of receiver are irrelevant as Fannie mae and Freddie mac  are not in receivership!

The last one (E) is interesting too, when FHFA and Treasury made the sweep deal,  the FHFA was required by LAW to ensure adequate competition for the offer of treasury to take ALL profits in exchange for Nothing!
I would of personally offered to take only 99% of all profits in exchange for ALL profits but the FHFA failed to ensure competition for such action!!!!

It really is that simple (a) is the LAW of appointment (b) is the LAW of powers!!
under section (a) alone there is NO POWER! under section (b) alone there is no Appointment of the Power! The term purpose means nothing as under section (a) there is NO power or duty, the Term purpose is only to allow for descriptions of what a conservator or receiver is appointed for, Not what its power or duty is as described by (b) powers and duties!

define purpose:
pur·pose noun
1.the reason for which something is done or created or for which something exists.

The word purpose has No power or duty! the word purpose is to define the existence of the conservator and the receiver.  In law the purpose does not define powers or duties, it simply difines why the FHFA as conservator or reciever can exist!

Because I exist, that does not give me power or duty. I would need to be given those. And in (b) the FHFA is given those! this is why (b) is written! I know this is the stumbling block, but a good lawyer would see the distinct differences in this and make sure the judge could see it too! Simple comparisons to the title 12 FDIC law would make it abundant as the GSE part seems to be written in accordance with it!

It really is this simple.







3 comments:

  1. Gary,
    While b, D talks about powers of conservator, in the portion you have listed, there is no section dealing with the powers of receiver. Is that part handled further down in the article? Because if they have explained powers of conservator, the have to have powers of receiver also whereby they show that the receiver would have powers to wind down but the conservator would not.

    ReplyDelete
    Replies
    1. (i) Limited-life regulated entities
      (1) Organization
      (A) Purpose
      The Agency, as receiver appointed pursuant to subsection (a)—
      UNDER RECEIVER
      6) Winding up
      (A) In general
      Subject to subparagraphs (B) and (C), not later than 2 years after the date of its organization, the Agency shall wind up the affairs of a limited-life regulated entity.

      again it even states appointment is section (a), NO POWER OR DUTIES!!!!
      The Agency, as receiver appointed pursuant to subsection (a)—

      Delete
  2. 12 U.S. Code § 4617 - Authority over critically undercapitalized regulated entities
    (D) Receivership terminates conservatorship
    The appointment of the Agency as receiver of a regulated entity under this section shall immediately terminate any conservatorship established for the regulated entity under this chapter.
    (E) Additional powers as receiver
    In any case in which the Agency is acting as receiver, the Agency shall place the regulated entity in liquidation and proceed to realize upon the assets of the regulated entity in such manner as the Agency deems appropriate, including through the sale of assets, the transfer of assets to a limited-life regulated entity established under subsection (i), or the exercise of any other rights or privileges granted to the Agency under this paragraph.
    (B) Notice requirements
    The receiver, in any case involving the liquidation or winding up of the affairs of a closed regulated entity, shall—
    (6) Winding up
    (A) In general
    Subject to subparagraphs (B) and (C), not later than 2 years after the date of its organization, the Agency shall wind up the affairs of a limited-life regulated entity.

    and so on....

    under(b) powers and duties there is the powers of both receiver and conservator and What WINDING UP is!!

    ReplyDelete

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