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Federal National Mortgage Association Message Board

  • aroadrock aroadrock Jul 22, 2013 3:38 AM Flag

    Treasury Dept Under Fire Over Fannie Mae Plea

    the above article is a "mystery article" - it came up on a google search on webpronews by a man with the last name of Tuttle...i found two links to it, but each one comes up with "story can't be found, etc" the title is certainly appealing...if anyone want to try finding it, have at is supposed to have bee published in the last 24 hours

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    • And like I said the Government is not going to dismantle a cash cow, Period.

      Sentiment: Strong Buy

    • Found in Google Cache from WebProNews site:

      Treasury Dept Under Fire Over Fannie Mae Plea
      By Mike Tuttle · 9 hours ago

      The long-past bailout of Wall Street is still stinging many folks in America. And some are not content to let bygones be bygones over how the whole thing was handled.
      Preferred shareholders of Freddie Mac and Fannie Mae yesterday filed a class action lawsuit challenging the US Government’s appropriation of their dividend, liquidation, and related distribution rights in August 2012.
      As part of the 2008 federal bail-out, mortgage giants Fannie Mae and Freddie Mac issued the US Department of Treasury $189 billion of senior preferred stock. These new securities entitled the Government to be paid dividends on their investment in Fannie and Freddie at a rate of 10% per year. The junior preferred shareholders received no dividends in the interim.

      In 2012, as the real estate market stabilized and began to improve, Fannie and Freddie began generating consistent and growing profits, enabling them to repay the government and resume dividend payments to junior preferred stockholders. Instead, the US Department of Treasury and the Federal Housing Finance Administration––both arms of the U.S. Government––unilaterally amended the Treasury’s senior preferred stock agreements to grant the Government the right to receive all of Fannie and Freddie’s profits and net worth as dividends (or as a liquidation preference). None of these dividend payments are being applied towards paying down the principal of the senior preferred stock; rather, the Government has structured the new contracts to effectuate a “cash sweep” of all of Fannie and Freddie’s profits and keep these entitles in a perpetual state of distress.

      (continued in next message)

      • 5 Replies to dgplexus1
      • The government has found a large gold mine in FNMA but they do not want to share the profits with the owners of FNMA even though they take the government to court. Is the government becoming tyrant minded???

      • (continuation)

        Plaintiffs allege that the Government’s unilateral amendment of the senior preferred stock agreements constitutes a “taking” under the Fifth Amendment to the US Constitution requiring payment of just compensation. They seek to represent a class of Fannie and Freddie junior preferred shareholders who owned their preferred shares on August 17, 2012, and therefore suffered the complete loss of their dividend and liquidation rights.

        (end of text)

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