GSE shareholders demand the truth regarding the net worth sweep

Letter to the editor on the net worth sweep.

Dan Mobbs is a long-time holder of Fannie Mae and has experienced the non-representation and abuse of authority that the FHFA has foisted upon us since 2012. The FHFA is supposed to represent ALL stakeholders, including the common shareholders of Fannie Mae and Freddie Mac, but he NEVER does anything that actually improves the financial condition of the entities as he is mandated to do — How hard did he have to “negotiate” with the Treasury to allow us to “keep” our retained earnings?  Wow, that was a tough negotiation, the Fifth Circuit en banc essentially said the net worth sweep was an “overstepping of authority” but the “negotiations” Calabria and Treasury have had resulted in “accounting chicanery” as Dick Bove correctly points out, because it disallows any REAL building of capital or EQUITY VALUE in the stocks.

the net worth

Image source: Fannie Mae

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As they have no "actual" representation or advocacy, certainly not from the FHFA Director or the puppet boards of directors at the two companies. This sham "negotiation" and the 11,000 "protected" documents still under seal, nearly 7 YEARS after the net worth sweep was imposed.  Why are these documents not being opened up to the public for all to see?

What could their contents reveal that Govt defense lawyers have stated would "roil the markets" if their contents were revealed? Seven years later?

Opening these documents might finally give the Fannie Mae and Freddie Mac shareholders the justice and TRUTH that they deserve with respect to the net worth sweep and the goings on leading up to it, and since then.



About the Author

Jacob Wolinsky
Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Prior to ValueWalk, Jacob was VP of Business Development at SumZero. Prior to SumZero, Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver