Fannie and Freddie have not ‘repaid’ taxpayers one thin dime.

Bailed Out Fannie and Freddie Are Repaying Taxpayers? Answer:  FALSE

freddie_fannieIn a recent Committee on Financial Services report the truth comes out about government sponsored Fannie and Freddie that foreclosure defense experts and “MERS Blur” researchers realized long ago… There is no way Fannie and Freddie can ever repay the bailout debt; and, they were at the helm of the mortgage Ponzi-like scam to the detriment of the American public.

Washington, Nov 7 – Direct from the Committee’s website:

Reports that failed government-run corporations Fannie Mae and Freddie Mac are close to “paying back” taxpayers for the largest bailout in American history are completely false, said Financial Services Committee Chairman Jeb Hensarling (R-TX).

F&F bailout“Fannie and Freddie have not ‘repaid’ taxpayers one thin dime. Reports to the contrary are pure Washington spin,” said Chairman Hensarling. “Legally, they can’t pay back taxpayers because their nearly $200 billion bailout was a draw from the Treasury, not a loan. But the truth is Fannie and Freddie cost the taxpayers a whole lot more than the amount of their bailout. Their failed business model was at the epicenter of the financial crisis – a crisis that threw millions of Americans out of work and ruined people’s lives. Fannie and Freddie can never make amends for the catastrophic damage their failed business model caused our economy – a failed model that is still alive today and must be terminated. Any positive cash flow Fannie and Freddie are experiencing is due to the government-sanctioned monopoly they retain over the market.”

Background Information:

As the Wall Street Journal’s Nick Timiraos explained just yesterday, Fannie and Freddie cannot “repay” taxpayers:

“The agreement doesn’t provide any mechanism for Fannie and Freddie to buy back the government’s senior preferred shares, which now total $188 billion. If it sounds like Fannie and Freddie are making interest payments on a loan that can’t ever be repaid, that’s because they are. So any discussion of ‘repayment’ needs this disclaimer: Even once Fannie and Freddie have paid $188 billion in dividends, they’ll still owe $188 billion.”

2009-04-05-FannieFreddieMAcFurther, while Fannie and Freddie have seen recent profitability, these institutions would not be in existence but for the extensive and continued taxpayer support; a point acknowledged in Fannie Mae’s quarterly financial statement:

“Our ability to issue long-term debt has been strong primarily due to actions taken by the federal government to support us and the financial markets. We believe that continued federal government support of our business and the financial markets, as well as our status as a GSE, are essential to maintaining our access to debt funding. Changes or perceived changes in the federal government support of our business and the financial markets or our status as a GSE could materially and adversely affect our liquidity, financial condition and results of operations.”

The PATH Act (Protecting American Taxpayers and Homeowners), which passed the Financial Services Committee in July, ends the bailout of Fannie and Freddie and phases out their failed taxpayer-backed business model as it creates a sustainable housing finance system for the nation.

In exchange for letting Fannie and Freddie draw their bailout money from Treasury, they sold to Treasury one million shares of Senior Preferred Stock with an initial “liquidation preference” equal to $1,000 per share, for a total of $1 billion in aggregate liquidation preference.

Section 3.3 of the Senior Preferred Stock Purchase Agreements states the “aggregate liquidation preference of the outstanding shares of Senior Preferred Stock shall be automatically increased by an amount equal to the amount of each draw.”

fannie_freddie_bailoutIn other words, American taxpayers own a million shares of stock in each company, the value of which has increased dollar-for-dollar with each dollar they took in the bailout.

The money Fannie and Freddie are sending Treasury now is a dividend on that stock. Under the Senior Preferred Stock Purchase Agreements, they are forbidden from reducing that dividend or paying anyone other than Treasury a dividend on any other outstanding stock.

So, taxpayers have not been repaid, they are not being repaid now, and all of the dividend money that Fannie and Freddie have sent in to Treasury has been a fee for the privilege of being under the Senior Preferred Stock Purchase Agreements, not a redemption of previous Treasury draws. Print version of this document.

See also: A Reminder of the Corruption That Helped Birth the Biggest Bailout in History

“Fannie Mae will never impose a cost on the American taxpayer…” – James A. Johnson, Chief Executive Officer of Fannie Mae, testifying before the House of Representatives, April 17, 1996

Biggest Bailout in HistorySpecial thanks to CFLA for the heads up. Stay informed and share the information.


6 thoughts on “Fannie and Freddie have not ‘repaid’ taxpayers one thin dime.

  1. Additionally, as I recently noted in another comment on another DC article, the BIG BANKS are not paying back any of their TARP BAILOUT funds either. They give “Shuck and Jive, Shuck and Jive”, we need to give them Impeach and Recall.

  2. I agree Impeach and recall and vote out all the garbage. Freddie is not a lender. Freddie is not a servicer. Freddie is not a trustee, Freddie is not a strawman originator, Freddie is not MERS, so what exactly can Freddie claim but being a securitizer of failed securitized loans whom had a policy never to have the note in Freddies possession. Seems to me in my unprofessional opinion, that Freddie is just a parasite on the American tax payer and a complete failure in their shell game roll of securitization, whom has made the same chaos as MERS has of the financial world. Appearing to be part of the con to steal the wealth of America. Continually stealing from the tax pool of Americans. Then read the Comptroller of the currency letter dated 1997 below and ask what is Freddies role in recovering the funds or defaults? My opinion is to sneak the funds back into the violated PSA’s via serviciers conning the county records and the people and the entire system to bring the funds back to Freddie to attempt to cure violated PSA years after the crime, if the money is even going back to the PSA’s. Who knows Very messy Freddy and the OCC comptroller obviously sees this. Has to!

  3. FYI! . Source is from US Bank’s own website at:

    Countless Foreclosure Rulings are Wrong!
    Jeff Barnes, Esq. wrote: “We have been provided with a copy of U.S. Bank Global Corporate Trust Services’ “Role of the Corporate Trustee” brochure which makes certain incredible admissions, several of which squarely disprove and nullify the holdings of various courts around the country which have taken the position that the borrower “is not a party to” the securitization and is thus not entitled to discovery or challenges to the mortgage loan transfer process.” The second page sets forth that U.S. Bank, as Trustee, “does not have any discretion or authority in the foreclosure process.” If this is true, how can U.S. Bank as Trustee be the Plaintiff in judicial foreclosures or the foreclosing party in non-judicial foreclosures if it has “no authority in the foreclosure process”?
    US Bank Brochure

  4. Parasite is correct. There IS nothing more going on. If you got a copy of a debt and took the proceeds, you profit.But if you never paid for it, you are a thief.Then hire a fucking lawyer to argue for your theft.Welcome to the United States of America, a religious non profit owned and operated by the Jews. BERNANKE, GEITHNER, SHULMAN, LEW, BLANKFEIN. KILL THEM ALL.

  5. Pingback: Trump’s Addressing Root Cause of 2008 Crash-Freddie and Fannie | Save-R-Nation

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