An interesting sentence jumped out at me “The main plaintiff, the mutual fund company Fairholme Funds, argues that the government improperly seized private property when it stared diverting the profits.”
I would say “the government improperly seized private property.” That is likely what those documents will show – that Fannie was aware that it was illegally seizing private property. The reason the profits were swept is that they were involved in thousands of lawsuits and one might just get through and drain the profits. IMO: It is a RICO of the highest order.
Fixing Fannie Mae and Freddie Mac, the mortgage finance giants that still operate under government supervision, is nowhere near the top of the Trump administration’s to-do list. Since the election, administration officials, including Steven T. Mnuchin, the United States Treasury secretary, have said little about their plans for the companies.
But we will know a lot more in the coming weeks as circumstances compel Trump officials to show their hand. In essence, their action or inaction on two important matters will demonstrate whether they intend to follow the Obama administration’s approach to the companies — which was to keep them in federal conservatorship and drain them of capital — or take a different path, perhaps toward privatization.
One of the two action items on the horizon involves what should happen to the $10 billion in earnings that Fannie and Freddie together generated in the most recent quarter.
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