Certified Forensic Loan Auditors, LLC

 
  Upcoming Classes

Search CFLA's Article Archive:

Nader: U.S. has Duty to Fannie, Freddie Investors

marketwatch.comJune 2, 2013

By Ruth Mantell

WASHINGTON (MarketWatch) — The federal government has a moral obligation to Fannie Mae and Freddie Mac shareholders and needs to end the current state of limbo, activist and consumer advocate Ralph Nader tells MarketWatch in an interview.

“They should put out a statement saying that whatever organization or reorganization there is of Fannie and Freddie, they will respect the shareholders’ equity and not vanquish it,” Nader said. “The U.S. government has got to treat Fannie and Freddie common shareholders the way they treated Citigroup and AIG. They bailed them out and gave them a chance to recover.”

Mortgage buyers Fannie FNMA +22.86% and Freddie FMCC +21.67% were placed into federal conservatorship in 2008. They send their profits to Treasury, shareholder dividends are suspended, and the firms can’t rebuild capital.

Several months before conservatorship of Fannie and Freddie began, officials such as Federal Reserve Chairman Ben Bernanke said the GSEs were “adequately capitalized,” comments echoed by then-Treasury Secretary Henry Paulson.

“Government officials clearly misled the common shareholders of Fannie and Freddie,” Nader said.

In recent months, volume has shot up as the firms’ earnings have strengthened on the rebounding housing market, along with news of hedge funds investing in preferred shares. Shares of both firms have climbed hundreds of percentage points over the past year, and seen large swings.

Nader is a shareholder in both companies. He said he bought his stake before the firms entered conservatorship. Nader declined to provide further details about his investment, but said he has not traded within the past 12 months.

Lawmakers agree that reform is needed to pare back the government’s outsized role in the U.S. housing-finance system, though Congress has made little progress. The firms’ futures are unclear, but investors are banking that Fannie and Freddie will be able to shed government control after they’ve repaid all of the nearly $190 billion received in government support. However, with recent quarterly earnings reports showing growth at Fannie and Freddie, there’s concern that urgency will dim.

Here’s an edited transcript of Nader’s conversation with MarketWatch.

MarketWatch: Why are investors buying over-the-counter and preferred shares?

Nader: They believe that equity will prevail in any reorganization. These are enormously wealthy companies in terms of assets and profits. The more [investors] believe, the more they become lobbyists for it. They are getting themselves into a self-fulfilling prophecy.

People are wondering what’s going on. There’s no parallel for this in American history. On the one hand there are people saying these are worthless, on the other hand people are saying how can they be worthless? These are valuable companies.

MarketWatch: Should shareholders who bought GSE stock before the firms were placed into conservatorship receive preferential treatment over those who bought shares after conservatorship began?

Nader: That’s a good question. Certainly they have a higher moral claim because they relied, like I did, on Paulson and Bernanke.

MarketWatch: You recently wrote a letter to Treasury Secretary Jacob Lew, noting several plans for GSE reform. Which do you see as the best?

Nader: I would like to see a public utility…once they pay Treasury back. An alternative would be… keeping it as it is, but regulating it so that the top guys don’t make $20 million or $30 million a year.

The penchant for doing nothing is strong in Congress. My guess is that two or three years from now, you’ll see the same Fannie and Freddie as you do now.

MarketWatch: What’s your next move on this issue?

Nader: The problem with any attempt to change the status quo is that from a financial viewpoint, Fannie and Freddie are working very well today. The housing market is recovering and the last thing that the housing and financial and real estate community wants is uncertainty and instability regarding Fannie and Freddie. In the meantime, they are reporting huge profits and by the end of next year they will have repaid the government.

 

Back to June 2013 Archive

CFLA was founded by the Nation's Leading Foreclosure Defense Attorneys back in 2007 to serve the Foreclosure Defense Industry and fight pervasive Bank Fraud. Since opening our virtual doors, CFLA has rapidly expanded to become the premier online legal destination for small businesses and consumers. But as the company continues to grow, we're careful to hold true to our original vision. For us, putting the law within reach of millions of people is more than just a novel idea—it's the founding principle, just ask Andrew P. Lehman, J.D.. With convenient locations in Houston and Los Angeles, you can contact Our National Account Specialist and General Manager / Member Damion W. Emholtz at 888-758-2352 for a free Mortgage Fraud Analysis or to obtain samples of work product, including cutting edge Bloomberg Securitization Audits, Litigation Support, Quiet Title Packages, and for more information about our Nationally Accredited and U.S. Department of Education Approved "Mortgage Securitization Analyst Training Certification" Classes (3 days) 24 hours for approved CLE & MCLE Credit (Now Available Online).

SEE BELOW- http://www.certifiedforensicloanauditors.com

Call us toll free at 888-758-2352

Bookmark and Share
spacer
Facebook Like us on Facebook
Twitter Follow us on Twitter
YouTube View our YouTube Videos
LinkedIn Connect to us on Linkedin
 
BBB Logo

 

spacer
Contact us or view our Sample Documents & Audits by completing the form below.

  • Reload
  • Should be Empty:


 

DVD Sets Only $99

 

FREE Mortgage Fraud Analysis

 

Order Cutting-Edge Services Now

 

Quiet Title Packages from Licensed Attorneys

 

Affiliate Services

 

CFLA Sponsored Attorney Links

 

Take-Home Education Package

 

ALB Law Firm

 

Advocate Legal

 

The True News Network

 

Sutton Law Firm, P.L.L.C.

 

Rubenstein Business Law

 

Atighechi Law Group

 

Scunziano & Associates

 

Get Certified to Perform Mortgage Securitization Audits

 

CFLA Training Academy

 

Expert Witness Services

 

Cutting Edge Expert Securitization Reports

 

CFLA Credit Cards

 

Breaking News

 

Letters to the Editor

 

CFLA Weekly Newsletters

 

Code of Ethics

 

Testimonials

 

Instructional Videos

 

Job Opportunities

 

License Opportunities

 

MARS Rule

 

Product Samples

 

Resource Links

 

Servicer Information

 

Foreclosure Laws

 

REST Report

 

Quiet Title Packages from Licensed Attorneys

 

Advertise on CFLA

 

Advertising Space: Mortgage Securitization, Quiet Title

 

Certified Forensic Loan Auditors, LLC
13101 West Washington Blvd.
Suite 444
Los Angeles, CA 90066

Phone: 832-932-3951
Toll Free: 888-758-CFLA (2352)
Mobile Users: CLICK TO CALL
info@certifiedforensicloanauditors.com

   
 
CFLA IS NOT A LAW FIRM AND DOES NOT PROVIDE ANY LEGAL ADVICE. CFLA DOES NOT OFFER FORECLOSURE CONSULTING OR FORECLOSURE RELIEF
SERVICES. CFLA DOES NOT OFFER OR ASSIST WITH ANY LOAN MODIFICATION SERVICE. CFLA ALWAYS RECOMMENDS THAT CLIENTS RETAIN COMPETENT COUNSEL IN THEIR RESPECTIVE JURISDICTION. CFLA HAS A FREE PROGRAM TO REFER CFLA CLIENTS TO LAW FIRMS IN NEARLY EVERY STATE AND CFLA
DOES NOT CHARGE OR OBTAIN REFERRALS FEES FOR THESE SERVICES. SERVICES NOT OFFERED TO RESIDENTS OF THE STATE OF NEVADA.

 
Home About Us Privacy Policy Terms of Service Disclaimer SERVICES Careers Contact Us
 
COPYRIGHT © 2007-2016 Certified Forensic Loan Auditors ™ All rights reserved