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Title: Who’s to blame for Fannie Mae and Freddie Mac failures? (Hint: It's not Bush)
Source:
Free Frank Warner
URL Source: http://frankwarner.typepad.com/free ... er/2008/10/what-they-said.html
Published: Aug 22, 2010
Author: NA
Post Date: 2010-08-22 22:47:27 by Nebuchadnezzar
Keywords: None
Views: 2803
Comments: 5
Who’s to blame for Fannie Mae and Freddie Mac failures? It’s becoming much more obvious than ever that Fannie Mae and Freddie Mac have been run, since 1992, as Democratic Party money machines. Look hard, and I’ll be happy to look with you, but it’s not easy to find Republican “greed” having anything to do with the failure of these two lending giants. The culprit appears to be Democratic “unselfishness” with taxpayer dollars, in the twin causes of giving home loans to low-income families and winning votes. Now Fannie Mae and Freddie Mac hold $5,200,000,000,000 in debt, and nearly $1 trillion of that is bad debt that taxpayers are being asked to cover. Democrats resisted reform. As former President Clinton told ABC News on Sept. 25: “I think the responsibility the Democrats have may rest more in resisting any efforts by Republicans in the Congress or by me when I was President to put some standards and tighten up a little on Fannie Mae and Freddie Mac.” Every time the Republicans tried to subject the books of Fannie Mae and Freddy Mac to the scrutiny and accounting rules, the Democratic leaders got in the way. In 2003, when President Bush called for tighter regulation and oversight of Fannie and Freddie, Congressman Barney Frank, the ranking Democrat on the House Financial Services Committee, said no. The New York Times reported Sept. 11, 2003: “These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts. “The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.” Republicans cowed. The Republicans, who had control of the House from 1995 to 2006, should have tried harder to force Fannie Mae and Freddie Mac to follow standard lending practices and open accounting. They certainly were cowed by Frank’s claims to be helping low-income families, and many congressmen probably deferred to the expertise of Frank, who’s been a banking committee member more than a quarter-century. The Republicans also had the Senate to deal with, and there, where it takes 60 votes to do anything, Sen. Christopher Dodd forcefully opposed better accountability for Fannie Mae and Freddie Mac. Republican complacency worsened the problem. It was a complacency encouraged by Democrats refusing to let the Republicans see how bad the problem was until it was too late. ‘I want to roll the dice.’ The Wall Street Journal today has a long list of other statements of Democrats relentlessly fighting off Republican attempts to rein in the two “government-sponsored enterprises,” Fannie and Freddy. Among the more interesting quotes is another by Congressman Frank, from a Sept. 25, 2003, congressional hearing: “I do think I do not want the same kind of focus on safety and soundness that we have in OCC [Office of the Comptroller of the Currency] and OTS [Office of Thrift Supervision]. I want to roll the dice a little bit more in this situation towards subsidized housing.” Consider, too, this exchange, at that same Sept. 25, 2003, hearing: Rep. Frank: Let me ask [George] Gould and [Franklin] Raines on behalf of Freddie Mac and Fannie Mae, do you feel that over the past years you have been substantially under-regulated? Mr. Raines? Mr. Raines: No, sir. Mr. Frank: Mr. Gould? Mr. Gould: No, sir. . . . Mr. Frank: OK. Then I am not entirely sure why we are here. ... I believe there has been more alarm raised about potential unsafety and unsoundness than, in fact, exists. Blind oversight. With reckless Democratic congressmen like Barnie Frank relying on the foxes to tell us if the chickens were guarded well, it’s no wonder Fannie Mae and Freddie Mac failed. The Republicans also neglected their duties; they failed to notice earlier the enormous financial risks that Frank and other Democrats were inviting. And yet, if you believe what House Speaker Nancy Pelosi is saying these days, the Democrats are the innocent victims in all this. How so? Frank Warner Update: More information that Barney Frank was destabilizing Fannie Mae as early as 1991: Although Frank now blames Republicans for the failure of Fannie and Freddie, he spent years blocking GOP lawmakers from imposing tougher regulations on the mortgage giants. In 1991, ... the Boston Globe reported that Frank pushed the agency to loosen regulations on mortgages for two- and three-family homes, even though they were defaulting at twice and five times the rate of single homes, respectively. Three years later, President Clinton’s Department of Housing and Urban Development tried to impose a new regulation on Fannie, but was thwarted by Frank. Clinton now blames such Democrats for planting the seeds of today’s economic crisis. "I think the responsibility that the Democrats have may rest more in resisting any efforts by Republicans in the Congress or by me when I was president, to put some standards and tighten up a little on Fannie Mae and Freddie Mac," Clinton said recently [Sept. 25, 2008]. The Boston Globe, Nov. 22, 1991: The federally chartered mortgage company Fannie Mae yesterday agreed to modify its rules restricting purchases of two-family and three-decker homes -- rules that housing advocates contend unfairly exclude low- and moderate-income families from buying homes in Boston. After a nearly three-hour meeting with members of the Home Buyers’ Union, a local advocacy group, and representatives of Mayor Flynn and Rep. Joseph P. Kennedy 2d (D-Mass.), Fannie Mae officials agreed to substantially alter rules to allow what one termed “hundreds if not thousands” of buyers a chance to own two-family homes and three-deckers. … Fannie Mae national spokesman David Jeffers said yesterday that the mortgage company restricted purchases of mortgages on multi-family homes after it saw many such mortgages go into default during the real estate slowdown. He said the default rate on mortgages on two-family homes is twice that of single-family homes, and the rate for three-deckers is five times the rate for single-family dwellings. But Jeffers said that after discussions with area homeowners, housing advocates, Kennedy and Rep. Barney Frank (D-Mass.), Fannie Mae officials agreed to purchase the mortgages made under the state’s “soft second” program, the primary source of mortgages for first-time homebuyers of low and moderate means. * * * In 2002, Frank was on the right track for about a half day, but then returned to his policy of allowing Fannie Mae and Freddie Mac to continue operating with loose rules and little supervision. Citizens Against Government Waste, Sept. 25, 2002: Citizens Against Government Waste (CAGW) today marveled at the arm-twisting acumen of one of Washington’s premiere lobbies, home mortgage behemoths Fannie Mae and Freddie Mac. After a speech this week, Rep. Barney Frank (D-Mass.), the House Financial Services Committee's ranking member, let fly with characteristic bluntness regarding the Government Sponsored Enterprises’ (GSEs) $4.5 billion combined lines of credit with the U.S. Treasury. When asked whether he would consider revoking the lines of credit to the two Wall Street powerhouses, Frank frankly replied, “I would take a look at it. I don't think it (the line of credit) makes a lot of difference.” Within hours, however, the usually pugnacious pol was falling over himself to backtrack. In a written statement, Frank meekly clarified that, “I apparently spoke imprecisely and gave an inaccurate impression of my views regarding federal policy governing Fannie Mae and Freddie Mac.” To complete the pirouette, he stated that in fact, "I start from a position in favor of the existing arrangements with regard to both Fannie Mae and Freddie Mac." … “Despite his hasty retreat this week, Rep. Frank took an important step by saying aloud what so many think: that it is questionable whether Fannie and Freddie, hugely profitable as they are, should continue to be implicitly backed by Uncle Sam while able to duck full transparency requirements,” [CAGW Vice President Leslie] Paige [said]. “If only Frank had had the chutzpah to stick to his guns.” * * * Then. The New York Times, Sept. 30, 1999, reporting that the Clinton administration was sewing the seeds of a national financial disaster: Fannie Mae, the nation’s biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits. In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. … In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980’s. Now. The New York Times on Dec. 20, 2008, blaming the financial disaster on the Bush administration and everyone else except the Democrats: There are plenty of culprits, like lenders who peddled easy credit, consumers who took on mortgages they could not afford and Wall Street chieftains who loaded up on mortgage-backed securities without regard to the risk. But the story of how we got here is partly one of Mr. Bush’s own making, according to a review of his tenure that included interviews with dozens of current and former administration officials. From his earliest days in office, Mr. Bush paired his belief that Americans do best when they own their own home with his conviction that markets do best when let alone. Then. The New York Times on Sept. 11, 2003, reporting on President Bush’s proposal to end the high-risk lending by Fannie Mae and Freddie Mac, and noting that Rep. Barney Frank opposed Bush’s call for reform: The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago. Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry. The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. … The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac -- which together have issued more than $1.5 trillion in outstanding debt -- is broken. Now. President Clinton, in a somewhat self-serving statement Sept. 25, 2008: “I think the responsibility the Democrats have may rest more in resisting any efforts by Republicans in the Congress or by me when I was President to put some standards and tighten up a little on Fannie Mae and Freddie Mac.” In The New York Times’ Dec. 20 report, Clinton’s Sept. 25 statement isn’t mentioned. The Times censors all evidence of the Democrats’ central role in destroying the economy. In the Times, the president who tried to regulate Fannie Mae and Freddie Mac’s lending practices in 2003 is accused of opposing regulation. As usual, the newspaper’s whorish writers give the criminally reckless Democrats a free pass. FW
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#1. To: All (#0)
http://www.csmonitor.com/Business/2010/0817/Fannie-Mae-and-Freddie-Mac-reform-Would-it-add-5-trillion-to-US-debt Hit the link. Since the USG now owns Fannie and Freddy, the US taxpayers are on the hook for ANOTHER $5,000,000,000,000.00 in debt. Thank you President Obama, Sen. Dodd and Rep. Frank (you lisping queer).
Being a Democratic shill means you check your humanity at the door.
I fault Bush for not seizing the Senate and executing Barney the Fag and Dodd.
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Worst POTUS: bush43. The US Empire's been on a Downhill, kick the can down the road trajectory since US/PO 1970. And JFK Assassination US PO Discovery. Extend and Pretend as we move back to NeoFeudalism.
bush43. Only the brain dead think this.
Obama's first all-by-his-lonesome budget, btw, calls for a $1.17 trillion deficit.
bush43. Only the brain dead think this. The rest of us know it. 8D See Cheney Flase Flags911/Invades for Oil/ Eliminates DeepWater Liability/Ecocide GoM for details.
#2. To: Nebuchadnezzar (#0)
(Edited)
Toss: ADL,CAIR and the Vatican into the pit they belong in.
#3. To: Nebuchadnezzar (#0)
#4. To: mcgowanjm (#3)
Worst POTUS:
#5. To: Badeye (#4)
Worst POTUS:
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