We will be adding much more detail to the reward program. I wanted to get the news out as soon as it was authorized last night. We have responded to several inquiries tonight,time will tell if they are legitimate.
These are some preliminary terms and clarifications:
Preliminary terms: This is not a lottery where we are seeking people to submit their best guess, although those are always welcome for the sake of discussion.One million dollars is the current maximum reward, the amount will vary based on the quality of your information. If you have information that could end the 3rd amendment sweep you may qualify for an amount greater than one million dollars. We are seeking those people who have credible inside knowledge that will expose the criminal actions of the U.S. government in regards to their attempted nationalization of Fannie and Freddie.If you feel you have such information and would like to contact us you may email us at email@example.com. You may also anonymously message us on the cyberdust app. our user name is timhoward717, this has worked well and is secure. If we feel you are credible and have information that may be vital we will than arrange a meeting to discuss the terms of the arrangement. I want to stress that if you believe you have information that you feel would be of high value you should have your attorney contact us. It will be critical that this be negotiated properly before any transaction is agreed to. Do not send us any information that is considered classified or protected,again go to your attorney and let them contact us. If you do not have an attorney , contact us and we will refer you to one. Do not send us information and expect to gather a reward, the terms of the reward will need to be negotiated and agreed to in advance. As always if you want to provide information simply for the good of our nation feel free to send anything you think may be of importance.
In the next few days we will be setting up a few attorneys to act as intermediaries in this process.
I will be adding to this post throughout tonight and tomorrow. There are a few comments from today that I will be adding to this tonight. Excellent job today folks!
Edit 12:23 am
I want to clarify for everyone why we decided to proceed with the reward program at this time. Quite simply one obvious reason is that now the government has a million more reasons not to perjure themselves in discovery or depositions.Another is the fact that there are unquestionably people who have knowledge that could end this ridiculous spectacle and avoid a lengthy trial. This would provide great benefit to everyone involved. Fannie and Freddie have been held hostage for six years, this has caused great harm to our housing market our economy and most important American families. Millions of Americans have been kept on the sidelines unable to purchase homes due to our governments illegal actions. The sooner we can draw this dark chapter to a close the better.
Now I want to share a few comments from today. the first is by Nick Isbel. Nick was the subject of a past post and is the author of the letter we presented to Rep. John Larson.
Nick wrote: Not sure I follow this thread as well as others do, but here are a couple of thoughts:
1) Home prices bottomed in Feb – March 2012. After that they rose steadily. This statement is based on the S&P/Case-Schiller 20-City Composite Home Price Index. There are different home price indices, but the major ones track each other closely. Case-Schiller is extremely widely used, and very reputable.
2) Past home price trends for the most recent quarters weigh heavily in predicting future home prices.
3) Home price forecasts are the 800 pound gorilla in predicting credit losses (and, therefore, indirectly, profitability). They have a HUGE impact on both the projected incidence of default (how often a default occurs) and the projected severity (how much money is lost when a default occurs).
4) It would have been apparent in August 2012 to anyone with even a rudimentary understanding of F&F home price forecast models and credit loss forecast models, as well as recent home price trends, that F&F financial prospects were improving sharply, and that, if recent home price trends continued, credit losses would be MUCH lower than anticipated, and that, as a consequence, loss provisions would be reduced in relatively short order. This was common knowledge at the time.
5) Reducing loan loss provisions increases (pretax) profits in direct proportion. This is exactly what actually happened, and explains in significant part the large profits in subsequent (to changes in the direction of home prices) quarters. The most likely scenario once home prices started improving was likely to be this type of windfalll. There is no way Treasury and FHFA didn’t know this; for them to argue that the credit loss provision reduction windfalls that materialized were some sort of happy coincidence that was not foreseeable in August 2012 would be ludicrous. Like ‘em or not, the Treasury & FHFA employees are smart, math-savvy folks. I know because I worked closely with them when I was at Fannie.
6) I think that Treasury and FHFA will try to frame the argument not around the median or most likely home price forecast, but around more pessimistic scenarios of what could have happened if there had been, in essence, a double dip in home prices. A second doomsday scenario.
7) I suspect that FHFA & Treasury moved when they did on the Third Amendment because they knew that time was almost out on their ability to claim that they were instituting the Sweep to “end the circular practice” of F&F borrowing money to pay back borrowed money. I think Treasury & FHFA knew that if they waited a few more months, the claim would likely move from being merely highly self-serving and implausible to being laughable on its face.
By way of background I worked at Fannie from 2001 to 2011, and would be happy to put the legal teams in touch with folks who develop and maintain the home price and loss forecast models.
This is another extraordinary job by Nick. He very clearly and accurately points out that the FHFA can not deny the fact that the reasons given to justify the third amendment sweep are baseless. He also offers priceless information as to exactly who compiled this information. Thanks Nick, stay in touch.
The next is someone who we just featured and again he outdid himself with this awesome analysis:
Neal Newman had this to say:
Tim – a million bucks? Here’s my shot:
We know that Congress felt strongly enough about the potential for misguided political meddling with the GSE’s that they wrote into HERA: “When acting as conservator or receiver, (FHFA) shall not be subject to the direction or supervision of any other agency of the United States … in the exercise of the rights, powers, and privileges of the Agency.” Judge Lambert stated in his ruling that the plaintiffs only “briefly” argued the FHFA violated this prohibition, and that they failed to produce evidence to back their claim.
So how to distinguish between a proper, arm’s-length transaction conducted by FHFA and one where they’re in cahoots with the Feds? For me, an arm’s length transaction might involve teams engaged in short bursts of face to face negotiations, the end product being a mutually beneficial agreement that would bring the respective principals together to consummate. Contrast that to a relationship characterized by “direction or supervision” among the parties, such as that of an employee and employer. The latter is a far more personal, one-to-one relationship. Interactions would be scheduled at regular intervals, allowing for the supervisor to receive status updates, and provide re-direction as necessary to the supervised. So, which of the two scenarios fits Ed Demarco and Tim Geithner’s relationship during the lead up to the August 2012 Third Amendment? Fortunately, a FOIA request produced the Secretary’s daily schedule tells us, and the data does not favor the defense. http://www.treasury.gov/FOIA/Pages/calendars.aspx
Having dissected the Secretary’s daily calendar from 2009-2013, I see there are multiple meetings involving FHFA, but the first one-on-one conversation appears in November 2010 – a 10 minute call from Geithner to DeMarco. Next was December 13 – a 30 minute meeting at Treasury. 2011 started slowly — the first private meeting wasn’t until September 1st – 2.5 months after the now famous unsolicited Blackstone presentation to Treasury that demonstrated the GSE’s were about to become massively profitable. Suddenly things got busy. On October 19, there were two, 10 minute Geithner phone calls to DeMarco. Following that, monthly meetings were held through March 2012, after which the pace quickened to approximately two per month. Calendar entries such as “Monthly Meeting with DeMarco” or “One on One with DeMarco” and eventually “Bi-Weekly Meeting with Ed DeMarco” appear. During the fall, the meetings — all of which took place at the boss’ (I mean Geithner’s) office — begin to taper, until the very last is held on Dec. 17. Not much noteworthy follows, unless you think a December 20, 2012, phone call to Tony James, President and CEO of Blackstone is relevant! ‘Dude – thanks for that great tip!’ Geithner stepped down the following month, and save one mid-2013 meeting with his successor, Jack Lew did not follow Geithner’s lead.
Whatever your opinion of the significance of this (in my view revealing) pattern, remember this – in order to prevail in Judge Sweeney’s courtroom, Fairholme attorneys need only demonstrate a preponderance of evidence that Treasury “was really the guiding force” (Sweeney quote) behind the sweep. So maybe Timmy was treating Eddie to his Cheese of the Month club. Or, maybe someone was directing a certain conservator on how to run his business. All I know is something smells bad and I don’t think its cheese.
Neal thanks for your dedication to our cause. Though you may not qualify for the million dollar reward, I will personally take you and a guest anywhere in the world for a few weeks once we gain our freedom. We can work on our books chronicling this wild ride.
Honestly I am astounded at the information so many of you contribute in our comments, you are true patriots! Keep the Faith