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Fannie Mae’s and Freddie Mac’s management and their Boards are responsible for neither.” (C) Unsafe or unsound condition Neither of the Companies fell within the purview of this subsection at the time they were placed in Conservatorship.Neither GSEs were engaged in any unsafe or unsound practice or was in danger of incurring losses that would caused their capital to fall below regulatory capital requirements. Question: On September 7, 2008, did the Regulated Entities meet the grounds for discretionary appointment of conservator or receiver? Code § 4617(a)(3)(A)-(L) as it Relates to the Regulated Entities.On September 7, 2008, public announcement of the conservator, Director Lockhart strongly emphasized that the management and directors of the Companies had done nothing wrong, noting that any difficulties they were facing were the result of extenuating circumstances.

Furthermore, Fannie Mae’s decline in earnings in 2007 was not attributable to either a violation of law or to any unsafe and unsound practice; but rather, the decline was largely attributable to the following: Discrete one-time losses on derivatives contracts with corresponding offsetting gains that were not simultaneously recognized.(G) Losses The regulated entity has incurred or is likely to incur losses that will deplete all or substantially all of its capital, and there is no reasonable prospect for the regulated entity to become adequately capitalized (as defined in section 4614 (a)(1) of this title).(H) Violations of law Any violation of any law or regulation, or any unsafe or unsound practice or condition that is likely to— (i) cause insolvency or substantial dissipation of assets or earnings; or (ii) weaken the condition of the regulated entity.Therefore, GSEs were not operating in an unsafe or unsound condition and, therefore, the statutory ground for appointing a conservator set forth in this subsection was not satisfied.(D) Cease and desist orders Neither of the Companies fell within the purview of this subsection at the time they were placed in Conservatorship.




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Fannie Mae’s and Freddie Mac’s management and their Boards are responsible for neither.” (C) Unsafe or unsound condition Neither of the Companies fell within the purview of this subsection at the time they were placed in Conservatorship.


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Fannie Mae’s and Freddie Mac’s management and their Boards are responsible for neither.” (C) Unsafe or unsound condition Neither of the Companies fell within the purview of this subsection at the time they were placed in Conservatorship.


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Fannie Mae’s and Freddie Mac’s management and their Boards are responsible for neither.” (C) Unsafe or unsound condition Neither of the Companies fell within the purview of this subsection at the time they were placed in Conservatorship.