Reuters Supports the Disenfranchisement of Fannie Mae and Freddie Mac Shareholders by Glen Bradford
Reuters published an article on Monday October 20, 2014 that spoke to the new guidelines coming from the FHFA regarding lower down payments as low as 3 percent for home mortgages, boosting access to credit. Within the article, Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) are referred to as “two taxpayer-owned firms.” This is wrong. Fannie Mae and Freddie Mac are not owned by taxpayers. Below, I will demonstrate why this is the case. Further, the reason behind writing this article is about the defamation and libel that is published by Reuters in this particular case against me and fellow common shareholders.
Fannie Mae and Freddie Mac are not taxpayer-owned
On October 27, 2014, I received confirmation from Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) Investor Relations.
“On September 7, 2008, Freddie Mac, through FHFA, in its capacity as Conservator, and treasury entered into the Purchase Agreement. Please see “Treasury Agreements” section of our 2013 10-K (pg 25-27) for more detailed information.”
When reading the 10-K, the following can be concluded:
- Treasury owns Senior Preferred and warrants to purchase common.
- Treasury does not own common.
- Common shareholders own the firms.
- Because treasury does not own common, Freddie Mac is not tax-payer owned.
Further, the same logic can be applied in the case of Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA). Further, both are in conservatorship, not receivership.
It gets better
Here are four emails that I received from the lead writer for the article:
October 21, 2014 9:08AM
In a manner of speaking not literally / was alluding to their ongoing status regarding Conservatorship, that’s all
Sent from my iPhone
October 21, 2014 1:16PM
I don’t need any lessons on Conservatorship thank you
Was a matter of wording, you need to take it in that light.
Sent from my iPhone
October 21, 2014 2:20PM
I looked over the draft I sent in yesterday and I didn’t make any mention of GSE ownership.
Could you kindly cut and paste the passage and I’ll look it over?
Could be local NY edit after I sent it to the desk.
October 21, 2014 3:56PM
I’ve gotta confess – I didn’t write that / you’ll need to check with [NAME REDACTED] for that segment, I believe that’s his handiwork.
Sent from my iPhone
Finally, the last email that I received from Reuters’ Brian Moss on the matter:
October 24, 2014 10:46AM
Your emails to [NAME REDACTED], [NAME REDACTED] and other Reuters staff were forwarded to me, with the Michigan appeals court ruling attached. We appreciate your concerns regarding our description of Fannie and Freddie in “U.S. regulator targeting lower down payments on mortgages.”
We have considered your objections but we do not agree that the article needs to be corrected. Our story stands.
Thank you for contacting us.
My view and summary
It would seem that [NAME REDACTED] did not write that the two firms are tax-payer owned and this part was perhaps later added by [NAME REDACTED], who has not responded to any of my inquiries. It appears that no one personally want to take credit for writing it. Further, no one wants to take responsibility to fixing the article. Apparently, my notes to them have been considered to be objections. Misunderstandings like this are pretty common, but rarely do I see such purposeful ignorance in regards to accepting edits and changes where they have asserted things that are factually untrue and amount to differences in the hundreds of billions of dollars impacting private shareholders especially mutual fund investors, aka probably you.
The article by Reuters is wrong, in my opinion. The article appears to be incorrect, for which no one wants to take responsibility. I am sorry that it has to be this way. I have put Reuters on notice.
Disclosure: The author of this article has a position in Fannie Mae common stock