Comment Detail

Comment

Tim Howard, the former CFO of Fannie Mae, has indictated that the initial money given to the GSEs was not needed. The GSEs had non-cash accounting write-downs and seem to have purchased mortgaged-backed securities from the Too-Big-To-Fail Banks to help those banks avoid financial crises themselves. The pretext for injecting the GSEs with money and for Treasury to have warrants for 80% of the companies' equity shares and to place them into conservatorship would not have been necessary for the companies to survive. The 'bailout" money was used as secure nearly 80% equity interest in the GSEs and to place them into conservatorship. I am an owner of GSE common shares and would like clarification on why the 80% equity ownership was given to the Treasury. Secretary Mnuchin has stated to reporter Maria Bartiromo that annual payments from the GSEs were being used to fund a shortfall for the Affordable Care Act, which bypassed congressional appropriations. I do not see why the director of the FHFA has not allowed the GSEs to rebuild capital, which is more consistent with the role of a conservator than taking their profit and giving it to Treasury. The companies seem to have been nationalised and that does not seem consistent with free markets or capitalism. After paying back the "bailout" with a high interest rate of 10%, it seems that the Government has been repaid in full and should cancel its warrants. Not allowing these entities to retain their earnings seems very unusual.