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POPSFannie & Freddie NOT included in Obama's Financial Regulations In analyzing the mortgage crisis, economist Walter E. Williams has written: “Starting with the Community Reinvestment Act of 1977, that was given more teeth during the Clinton administration, Congress started intimidating banks and other financial institutions into making loans, so-called sub-prime loans, to high-risk homebuyers and businesses. “The carrot offered was that these high-risk loans would be purchased by the government-sponsored enterprises Fannie Mae and Freddie Mac. Anyone with an ounce of brains would have known that this was a prescription for disaster but there was a congressional chorus of denial,” he added. “The financial collapse of Fannie Mae and Freddie Mac is not a failure of the free market because lending institutions in a free market would not have taken on the high-risk loans,” said Williams. “They were forced to by the heavy hand of government.”
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POPSBarney Frank: Predatory Lender Why is Barney Frank still in charge of the Financial Services Committee? Last years FNMA, FHA (GSE) loans are this years foreclosures. How is that working out for taxpayers. And in addition, lets keep non-paying borrowers in homes for 2 - 3 years without paying. How much is that costing taxpayers. Maybe cheaper to give those borrowers a big Cash for Keys check rather than continue to have a non-paying asset and cost of continuous litigation for a barrage of new federal mandates and state legislation that fuels plaintiff attorneys.
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POPSNow this is whats coming !!! Well as the Fed goes so will the country........People, its time to start careing......Things are changing way to fast and in the wrong direction!
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POPSThe return of The Wall? Time will tell, but this certainly does not look like "change" and gives me no "hope". This is just the same ol' same ol'...just older. We've been hearing for the last 8 yrs. about the failed policies of the Bush Administration; well, what about the failed policies of the Clinton one? Does America want them back to pick up where they left off....with HELP? If this is someone's idea of "change" they need to check their dictionaries.
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POPSWho REALLY warned of the Mortgage Mess? "I urge my colleagues to support swift action on this GSE reform legislation.", McCain finished after saying, "OFHEO’s report solidifies my view that the GSEs need to be reformed without delay."
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POPSWho Supported Fannie R E G U L A T I O N ? !! It never made it out of committee. Chris Dodd, then the ranking member of the Banking Committee and now its chair, was in the middle of receiving preferential loan treatment from Countrywide Mortgage, one of the companies gaming the system in the credit crisis. Meanwhile, Barack Obama took hundreds of thousands of dollars from the lobbyists McCain mentions in this speech, making him the #2 recipient of Fannie/Freddie money:
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POPSBarney Frank and Chuck Schumer’s Role In Fannie Mae's Failure
In Congress, they made sure there was no additional oversight, no additional limit on executive behavior and compensation, and no further restraint on the growth of the companies’ mortgage-backed-securities portfolios, among other changes. (All of these needed reforms, by the way, have been championed for years by Sen. John Sununu.) They wanted more loans to people who might not qualify for traditional bank financing. And, as The Wall Street Journal has pointed out, Frank “pressured regulators to ease up on their capital requirements — which now means taxpayers will have to make up that capital shortfall.” Barney Frank is the very symbol of Washington’s deliberate refusal to prevent the collapse — the predicted collapse — of Fannie Mae and Freddie Mac. Rules were relaxed and money was loaned and predictably low income families defaulted on loans that they never had any business getting in the first place and now you and I have to pay for it.
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POPSWall Street Fat Cats Aren't at Fault This Time That’s because Raines was transforming Fannie Mae from a boring but stable financial institution dedicated to making homes more affordable into a risky venture that abused its special status as a “Government Sponsored Enterprise” (GSE) for Raines’ personal profit. Fannie bought the bad loans and bundled them together with good ones. Wall Street was glad to buy up these mortgage securities because Fannie Mae was deemed a government-insured behemoth “too big to fail.” And others followed Fannie’s lead.
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POPSJohn McCain Co-Sponsored 2006 Bill To Clean Up Fannie / Freddie ......for senior executives. In the case of Franklin Raines, Fannie Mae's former chief executive officer, OFHEO's report shows that over half of Mr. Raines' compensation for the 6 years through 2003 was directly tied to meeting earnings targets. The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac. The OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulator's examination of the company's accounting problems. This report comes some weeks after Freddie Mac paid a record $3.8 million fine in a settlement with the Federal Election Commission and restated lobbying disclosure reports from 2004 to 2005. These are entities that have demonstrated over and over again that they are deeply in need of reform.
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POPSGreg Mankiw On Freddie And Fannie The Harvard economist weighs in. He called for reform in 2003, but he's not bragging. He's just expressing regret that bailouts aren't the answer to the financial crisis.
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POPSBailout Blowback Warning in 2003! One of the major government privileges granted to GSEs is a line of credit with the United States Treasury. According to some estimates, the line of credit may be worth over $2 billion dollars. This explicit promise by the Treasury to bail out GSEs in times of economic difficulty helps the GSEs attract investors who are willing to settle for lower yields than they would demand in the absence of the subsidy. Thus, the line of credit distorts the allocation of capital. More importantly, the line of credit is a promise on behalf of the government to engage in a huge unconstitutional and immoral income transfer from working Americans to holders of GSE debt. The Free Housing Market Enhancement Act also repeals the explicit grant of legal authority given to the Federal Reserve to purchase GSE debt. GSEs are the only institutions besides the United States Treasury granted explicit statutory authority to monetize their debt through the Federal Reserve.
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