{"id":4256,"date":"2008-09-07T13:11:55","date_gmt":"2008-09-07T20:11:55","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=4256"},"modified":"2008-09-07T13:11:55","modified_gmt":"2008-09-07T20:11:55","slug":"excerpts-from-the-press-release-about-the-death-of-fannie-and-freddie","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/4256\/excerpts-from-the-press-release-about-the-death-of-fannie-and-freddie\/","title":{"rendered":"Excerpts from the Press Release about the Death of Fannie and Freddie….."},"content":{"rendered":"
\n

Treasury Press Release<\/a><\/p>\n

I have clearly stated three critical objectives: providing stability to financial markets, supporting the availability of mortgage finance, and protecting taxpayers \u2013 both by minimizing the near term costs to the taxpayer and by setting policymakers on a course to resolve the systemic risk created by the inherent conflict in the GSE structure.<\/em><\/p>\n

What he\u2019s talking about in terms of the inherent conflict is that Fannie and Freddie are essentially government institutions with shareholders and that creates a conflict of who do they serve – the shareholders or the common good?<\/p>\n

I attribute the need for today\u2019s action primarily to the inherent conflict and flawed business model embedded in the GSE structure, and to the ongoing housing correction. GSE managements and their Boards are responsible for neither. New CEOs supported by new non-executive Chairmen have taken over management of the enterprises, and we hope and expect that the vast majority of key professionals will remain in their jobs.<\/em><\/p>\n

Out with the old, in with the new – and we hope that the main people besides for upper management don\u2019t leave.<\/p>\n

First, Treasury and FHFA have established Preferred Stock Purchase Agreements, contractual agreements between the Treasury and the conserved entities. Under these agreements, Treasury will ensure that each company maintains a positive net worth.<\/em><\/p>\n

That means that if Fannie or Freddie has a bad quarter and loses enough so that they become upside down, we get to turn on the faucet and fill them up with more cash.\u00a0\u00a0 Your cash and mine.<\/p>\n

It is more efficient than a one-time equity injection, because it will be used only as needed and on terms that Treasury has set.<\/em><\/p>\n

On an as needed basis – as often as needed and on terms the Treasury has set (only when they go negative).<\/p>\n

Market discipline is best served when shareholders bear both the risk and the reward of their investment. While conservatorship does not eliminate the common stock, it does place common shareholders last in terms of claims on the assets of the enterprise.<\/em><\/p>\n

If you hold common stock in Fannie or Freddie, you are the first one to get hit with the losses.<\/p>\n

Similarly, Read more<\/a><\/em><\/div>\n","protected":false},"excerpt":{"rendered":"

Treasury Press Release I have clearly stated three critical objectives: providing stability to financial markets, supporting the availability of mortgage finance, and protecting taxpayers \u2013 both by minimizing the near term costs to the taxpayer and by setting policymakers on a course to resolve the systemic risk created by the inherent conflict in the GSE […]<\/p>\n","protected":false},"author":44,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[26],"tags":[],"class_list":{"0":"post-4256","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-lending","8":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":2536,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/2536\/conforming-loan-limit-of-650000-fha-loan-limit-of-729000\/","url_meta":{"origin":4256,"position":0},"title":"Conforming Loan Limit of $650,000, FHA Loan Limit of $729,000","author":"Brian Brady","date":"January 24, 2008","format":false,"excerpt":"A conforming loan limit of $650,000 and an FHA loan limit of $729,000 are being telegraphed as part of the Economic Stimulus Package of 2008. Inman News reports that Congress backed a temporary loan limit increase to $625,000: The government-sponsored enterprises, or GSEs, may soon be allowed to back loans\u2026","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":13891,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/13891\/a-new-year-and-the-looting-of-the-american-people-continues-unabated\/","url_meta":{"origin":4256,"position":1},"title":"A new year and the looting of the American people continues unabated.","author":"Tom Johnson","date":"January 3, 2011","format":false,"excerpt":"BofA Settles GSE Buyback Requests for Pennies on the Dollar According to this MND article, Obama appointee, FHFA acting director Edward DeMarco just handed Ally bank, formerly GMAC Bank and Bank of America potentially a total $300 billion windfall. Freddie Mac and Fannie Mae, wholly owned subsidiaries of the US\u2026","rel":"","context":"In "Dirty Laundry"","block_context":{"text":"Dirty Laundry","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/dirty-laundry\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-content\/uploads\/2011\/01\/http___www.maybachusa.com_graphics_gallery_maybach-laundalet_01-300x203.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":4259,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/4259\/how-we-got-to-this-place\/","url_meta":{"origin":4256,"position":2},"title":"How we got to this place…..","author":"Tom Vanderwell","date":"September 7, 2008","format":false,"excerpt":"I promise I won't take up so much space on here after the dust settles, but I'm having a hard time getting my mind around the enormity of what's happening with Fannie and Freddie and what it means, so I figure the best thing I can do is share what\u2026","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":4267,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/4267\/update-on-fannie-and-freddie\/","url_meta":{"origin":4256,"position":3},"title":"Update on Fannie and Freddie","author":"Tom Vanderwell","date":"September 8, 2008","format":false,"excerpt":"Well, it happened.\u00a0 In case you haven\u2019t heard the news, Fannie and Freddie were bailed out by the Federal Government over the weekend.\u00a0\u00a0 I\u2019m not going to go over all of the details but just try to hit some \u201chigh points.\u201d So, here goes: 1. The Federal government now owns\u2026","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":4287,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/4287\/moral-hazard-revisited\/","url_meta":{"origin":4256,"position":4},"title":"Moral Hazard Revisited…..","author":"Tom Vanderwell","date":"September 8, 2008","format":false,"excerpt":"One of the important things that Paulson said in the press conference yesterday was that we (the government) don't want Fannie and Freddie to stay public and that one of the things that the next administration and Congress has to figure out is \"How in the world do we take\u2026","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":4039,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/4039\/mortgage-market-week-in-review-7\/","url_meta":{"origin":4256,"position":5},"title":"Mortgage Market Week in Review","author":"Tom Vanderwell","date":"August 22, 2008","format":false,"excerpt":"Here we are on Friday again and it\u2019s time to take another look at what\u2019s going on in the mortgage markets. 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The Index of Leading Economic Indicators\u2026","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/4256","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/users\/44"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/comments?post=4256"}],"version-history":[{"count":2,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/4256\/revisions"}],"predecessor-version":[{"id":4258,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/4256\/revisions\/4258"}],"wp:attachment":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/media?parent=4256"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/categories?post=4256"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/tags?post=4256"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}