We will be giving a brief analysis on the Iowa hearing shortly, but I wanted to get up the REDACTED RESPONSE IN OPPOSITION TO DEFENDANT’S MOTION TO STAY ALL PROCEEDINGS (Fairholme lawsuit) now.
Take a look at the bottom of page 16
“For example, analyses that were prepared in July 2012 on the basis of the Treasury “scenarios” projected, inexplicably and suspiciously, much lower net income for Fannie in subsequent years—approximately a 50% reduction for most years—than had internal Treasury analyses that had been prepared only a month earlier, in June 2012. Compare T3847 (June analysis) (attached as Ex. C) with T3889 (July 2012 Treasury analysis) (attached as Ex. B). Again, documents produced thus far by the Government do not purport to explain or justify all of the differences between the scenarios. The production of such critically important documents will cause little if any burden to the Government.”
“The Government’s failure thus far to produce many of the financial projection documents discussed above is especially curious in light of the fact that many documents produced in third party discovery (by Fannie, Freddie, and their auditors)”
So as we predicted the discovery has already produced documents showing that the government indeed was cooking the books to justify their lawless sweep. Fannie and Freddie, on the other hand, apparently are not going along with the government’s attempts to cover up the lawless actions that lead up to the third amendment sweep. The government’s scheme is unraveling in discovery. We will edit this post soon with a short analysis on the Iowa hearing and more.
Edit 1 (Please note the edit above as well)
I want to share briefly about the Iowa hearing in the continental case concerning the government’s motion to dismiss.I want to point out to our readers that this is not one of the cases we have been covering. Watching Judge Pratt, I felt like I was watching Woody Allen in a Saturday night live spoof on the GSE battle. He shockingly stated at one point “I don’t know anything about them” referring to Fannie and Freddie. If not for the content being discussed you would think the Judge was presiding over a dispute between Iowa pig ranchers.
Judge Pratt was fixated on the issue of jurisdiction, at one point he said that he thought the issue is rightfully being waged in Judge Sweeney’s court of claims. His reasoning was that it appears to be a takings issue as opposed to the APA issue that would be addressed in his court. He also repeatedly queried if there were any precedents that he was unaware of that would justify him hearing the case. It is very unlikely that a judge so incredibly unknowledgeable and disinterested in the gigantic issues before him will be willing to be a trailblazer. I must say I will be shocked if he does not grant the government’s motion to dismiss the case.
Judge Sweeney (Fairholme lawsuit) on the other hand clearly sees right through the government’s lawless scheme, and I believe she will toss aside the government’s latest attempt to stall justice in her court.There should be no doubt in anyone’s mind that the lawless actions of the government will not stand. It is also important to remember that neither the conservatorship nor the sweep was ever intended to be permanent .The sweep was a rash ill-thought out way to buy congress a little more time to enact major housing finance reform.With housing reform dead, we will see the temporary sweep ended, and Fannie and Freddie released.
As I have stated before the court cases are becoming more and more less relevant as we continue to see such dramatic progress on the political side of things as the Democratic coup gains steam. The trouncing that democrats sustained in November furthered their resolve. Millions of their key constituents had been left on the curb for six years following the 08 crash unable to purchase a home even though they would have easily qualified in the pre-bubble years. Unsurprisingly Because of this many felt no motivation to get out and vote this year.
Today we saw further proof of the dramatic steps that the democrats are taking to right their past wrongs in a letter 18 Democratic Senators sent to the FHA calling for a reduction in fees. The higher fees have played a large role in keeping millions of their constituents unfairly locked out of the housing market. Keep the faith!