April 29, 2014

RICHARD EPSTEIN: Congress Can’t Wash Away the Executive Branch’s Sins. “That debate has how spilled over in to the political arena. Right now, the main mission of the Senate Banking Committee’s Johnson-Crapo housing finance bill is to develop a new framework for future residential home mortgages. Unfortunately, the bill also tries to ditch the many lawsuits brought by private shareholders of Fannie and Freddie Mac against the government for existing claims. While the authors of the bill continue to claim that the proposed legislation leaves the issues relating to investors’ rights to the courts, Section 604 of the bill declares that the August 17, 2012, Third Amendment to the original Senior Preferred Stock Purchase Agreement (SPSPA) ‘shall not be amended, restated, or otherwise changed to reduce the rate or amount of dividends’ and thus perpetuates the government’s right to take all the profits from the two companies.” They told me if I voted for Mitt Romney, the government would take the side of powerful people who bilked shareholders. And they were right!