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
