What is the specific legal basis for the takeover?
Is this part of a Federal statute? If so, what’s the specific reference? Which section of Federal law governs these two corporations?
Is this part of a contractual legal agreement between the US government and Fannie and Freddie? If so, what agreement? A loan agreement between the government and Fannie / Freddie?
Thanks.
I’ve done a little more investigation and found this: http://www.ofheo.gov/media/PDF/FHFACONSERVQA.pdf
It states “In this instance, the Federal Housing Finance Agency (“FHFA”) has been appointed by its Director to be the Conservator of the Company in accordance with the Federal Housing Finance Regulatory Reform Act of 2008 (Public Law 110-289) and the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4501, et seq., as amended) to keep the Company in a safe and solvent financial condition.”
This apparently provides the answer to the question . Here’s a link to the 2008 act: http://www.govtrack.us/congress/bill.xpd?bill=h110-3221.
Here’s a link to the 12 USC 4501: http://www.law.cornell.edu/uscode/html/uscode12/usc_sec_12_00004501—-000-.html
Based on a quick check (not yet a detailed review), it appears that the 2008 act is the source of the statutory authority for the conservatorship.
Here’s a corrected link for the 2008 act: http://www.govtrack.us/congress/bill.xpd?bill=h110-3221
Tags: Govtrack, Statutory Authority, Us Congress
Excellent question. Me and my bf were just talking about this and wondering the exact same things. Unfortunately I do not know the answer but I am going to keep watching this question and hopefully someone does know.
I don’t think there’s a legal basis. The government is trying to rescue the banking industry.
” Placing the companies (Fannie and Freddie) in conservatorship, rather than receivership, could signal that the government does not intend to nationalize or liquidate Fannie Mae and Freddie Mac. Instead, under the terms of a federal law passed this summer, conservatorship is designed to allow the government to restructure the companies and return them to private control. Treasury officials have previously compared the process to Chapter 11 bankruptcy.”
Why help Fannie & freddie? CEO & presidents of those companies went laughing all the way to the bank. Put them in jail first & see what happens. & ***** all those greedy people facing foreclosures. Most of them are 2nd or more houses for them.
no legal basis, but there must be someone to look after the bastards’ asses, or the US would be bankrupt.