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Fannie Mae and Freddie Mac were pilfered, investors screwed

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Newly released documents prove that Fannie & Freddie were being systematically crippled and their profits stolen:

"This new trove of documents conclusively shows that the Net Worth Sweep was designed solely to boost Treasury’s coffers and prevent the GSEs from rebuilding capital or exiting conservatorship. As we know, the Obama Administration’s plan worked. Treasury has usurped $130 billion more than it would have received absent the Net Worth Sweep, and the GSEs will be left with zero capital by the end of this year."

http://investorsunite.org/documents-proof-scheme-illegally-pilfe...

Member Summary
Fannie Mae and Freddie Mac were insolvent (as in negative net worth) when they were bailed out by the Federal Govt : The only reason the Fed Govt did not end up as the 100% shareholder of both companies (as any private sector investor would have) is because of some arcane rule that prevents the Fed gov from owning more than 80% any private company.

So the Federal Administrator (representing 80% of shares of both companies) played hardball and managed to siphon off all of the net cash flow : Morally the Fed Govt is entitled to 100% of the profits, so I see no problem.

I am pretty sure that legally the Federal Administrator is just keeping the money in escrow and will make it available to cover any future losses the next time real estate tanks, instead of  having to advance more taxpayer money to bail them out again.

Any 51% shareholder of a private company can legally do the same (ie vote to not pay any dividends and just let profits pile up in some bank account).

 
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rated:
Only relevant if shareholders had a competitive buyout offer.

rated:
Red for the fake news.

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SummerSoFar said:   Red for the fake news.
  And your source disputing the OP's post is???

rated:
bighitter said:   
SummerSoFar said:   Red for the fake news.
  And your source disputing the OP's post is???

A more rational question would be what other sources substantiate the link from OP which isn't an uninterested party. 

rated:
ZenNUTS said:   
bighitter said:   
SummerSoFar said:   Red for the fake news.
  And your source disputing the OP's post is???

A more rational question would be what other sources substantiate the link from OP which isn't an uninterested party. 



  https://www.forbes.com/sites/richardepstein/2017/08/02/the-fanni...

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The whole Fannie\Freddie thing was a scam from the get go. Most people I know don't even want to co-sign a mortgage for their children yet through the Federal Government basically everyone is co-signing for their neighbor's mortgage.

It was a publically traded company with an implicit guarantee that the US Federal Government that they would never allow the companies to fail. This allowed them to leverage to the hilt, take extreme risks, and post huge profits. Either the taxpayer was going to get screwed or the investors.

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All true, but it has allowed many people to get homes at low interest rates. Sure, there have been a number of unqualified folks, but unless you were super rich (Zuckerberg 0% loans), most taxpayers have been able to take advantage of these GSE-sponsored loans.

You would be hard-pressed not to take a GSE-sponsored loan even if you were against the operations of these agencies. I am really not sure if FHA loans are a good deal either. My thinking has been that if FHA was the only loan type you could qualify for, you might want to wait to buy (save more money, etc.). I am sure there are exceptions, but it appears to me that everything but Fannie and Freddie are rather expensive.

Rasheed

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>> All true, but it has allowed many people to get homes at low interest rates. Sure, there have been a number of unqualified folks, but unless you were super rich (Zuckerberg 0% loans), most taxpayers have been able to take advantage of these GSE-sponsored loans.

They inflated prices.

I doubt anyone benefited anything at the end of the day!

Same story with student loans!

rated:
ZenNUTS said:   
bighitter said:   
SummerSoFar said:   Red for the fake news.
  And your source disputing the OP's post is???

A more rational question would be what other sources substantiate the link from OP which isn't an uninterested party. 

 I disagree.  Why do you expect OP to produce a dossier of additional references supporting his post and yet at the same time, you willingly accept the “red for fake news” comment of SummerSoFar?    My comment shouldn’t be construed as attacking SummerSoFar.  I only wish if he had knowledge of relevant facts or links supporting dissent, he would post same.   Too many posters want to repeat the trite “fake news” accusation these days, whether the Target is CNN, Fox. NBC, or some other source.  If you don’t have sufficient knowledge of the subject matter to engage in debate, look up the pros and cons and then post them.
 

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