Freddie & Fannie: Central Planning at its worst

[CrusaderFrank]

Without Googling, does anyone know what the one and only difference is between these 2 disasters?

It's slight, it's so slight that its absurd to have 2 separate entities each employing 5,000+ people and gobbling taxpayer funding like it was matter swirling down the accretion disk of a black hole.

Fannie was the demon spawn of FDR, Freddie was 1970's Dem Congress contribution to Progressive government.

There is no reason why they should be separate entities! They have almost identical mission and structures!

"they buy mortgages on the secondary market, pool them, and then sell them as mortgage-backed securities to investors on the open market. Everything else regarding government guarantees, explicit guarantees, implicit guarantees, subsidies and direct government funding is exactly the same for Freddie Mac as it is for Fannie Mae."

Fannie Mae vs Freddie Mac - Difference and Comparison | Diffen

The one and only difference is that Fannies buys more from thrifts!

Why are we paying twice for the exact same mistake?

 

[blastoff]

Without Googling, does anyone know what the one and only difference is between these 2 disasters?

It's slight, it's so slight that its absurd to have 2 separate entities each employing 5,000+ people and gobbling taxpayer funding like it was matter swirling down the accretion disk of a black hole.

Fannie was the demon spawn of FDR, Freddie was 1970' Dem Congress contribution to Progressive government.

There is no reason why they should be separate entities! They have almost identical mission and structures!

"they buy mortgages on the secondary market, pool them, and then sell them as mortgage-backed securities to investors on the open market. Everything else regarding government guarantees, explicit guarantees, implicit guarantees, subsidies and direct government funding is exactly the same for Freddie Mac as it is for Fannie Mae."

Fannie Mae vs Freddie Mac - Difference and Comparison | Diffen

The one and only difference is that Fannies buys more from thrift!

Why are we paying twice for the exact same mistake?

The short answer is, government at its finest!!!

 

[boedicca]

Why are we paying twice for the exact same mistake?

I know! I know!

So the Dems can provide more patronage jobs to their cronies (i.e. Jamie Gorelick and Rahm Emmanuel). A couple of years' stint results in $$Ms of bonuses, thus setting up the crony with sufficient wealth for life.

 

[CrusaderFrank]

It's like having 2 separate national post office systems with one that only delivers to Wisconsin on Tuesdays.

Consolidate them.

Sell them to the highest bidder.

The US Government should not try to centrally plan the US Housing market.

 

[topspin]

bankers and real estate agents like it, the rest of us are stuck with the tab.
Central planning just doesn't work as well as free markets.

 

[Mr. Peepers]

bankers and real estate agents like it, the rest of us are stuck with the tab.
Central planning just doesn't work as well as free markets.

Um, idiot. The "free market" shenanigans of lenders and wall street are what got us AND Frannie/Freddie into this mess. They were among the last to loosen lending requirements, remember? Oh, and 86%+ of toxic mortgages were issued and owned by PRIVATE LENDERS. You guys really do have the memory of a gnat. Free markets DON'T WORK WITHOUT REGULATION. The private sector cannot be trusted to police themselves. This has been proven time and time and time again.

Central planning my ass. Freddie and Frannie are PRIVATE corporations contracted by the government.

 

[KissMy]

bankers and real estate agents like it, the rest of us are stuck with the tab.
Central planning just doesn't work as well as free markets.

Um, idiot. The "free market" shenanigans of lenders and wall street are what got us AND Frannie/Freddie into this mess. They were among the last to loosen lending requirements, remember? Oh, and 86%+ of toxic mortgages were issued and owned by PRIVATE LENDERS. You guys really do have the memory of a gnat. Free markets DON'T WORK WITHOUT REGULATION. The private sector cannot be trusted to police themselves. This has been proven time and time and time again.

Central planning my ass. Freddie and Frannie are PRIVATE corporations contracted by the government.

You Win The Idiot of The Year Award!!!

 

[Mr. Peepers]

You Win The Idiot of The Year Award!!!

OK retard, please refute anything that I posted. With actual real source links - not righty talky word of the day opinion blogs. I'll wait.

ps. I can post sources.... I love it when a "con$ervative" corporatist calls me an idiot when facts are presented. Makes it feel like opposite day!

 

[Mr. Peepers]

Yeah, that's what I thought. Off to the train...

 

[boedicca]

As has been noted frequently over the past few decades: Mixed Markets Don't Work.

Trying to mix aspects of a free market with aspects of centralized control leads to a Civil Cold War. Which is exactly the state of our country today.

 

[CrusaderFrank]

bankers and real estate agents like it, the rest of us are stuck with the tab.
Central planning just doesn't work as well as free markets.

Um, idiot. The "free market" shenanigans of lenders and wall street are what got us AND Frannie/Freddie into this mess. They were among the last to loosen lending requirements, remember? Oh, and 86%+ of toxic mortgages were issued and owned by PRIVATE LENDERS. You guys really do have the memory of a gnat. Free markets DON'T WORK WITHOUT REGULATION. The private sector cannot be trusted to police themselves. This has been proven time and time and time again.

Central planning my ass. Freddie and Frannie are PRIVATE corporations contracted by the government.

The government sets the standards for Fannie and Freddie, their quasi-public nature notwithstanding. Freddie and Fannie set the tone of mortgage underwriting, as their standards fell for the paper they would buy, so did the entire industries. FNMA will buy no income no asset? Hmmkay! We'll give them no income no asset!

Because of their de facto public guarantees, Fannie and Freddie are the only 2 NYSE companies that did not meet the same reporting standards as every other company, especially with respect to their losses! And that is why Barnie Frank could lie and say they weren't in trouble as they melted down

At the same time, many lenders got suckered by the Fed easy money policy and played musical chairs knowing that either FNMA or some other sucker would be the ultimate patsy. The difference is that my 2 friends who worked for Bear Stearns had their entire life savings wiped out while Jamie Gorelick, Donald Mudd and Franklin Raines still pocketed all their money.

Without FNMA and Freddie as willing buyers how many lenders would originate no income no asset paper when their firms capital was on the line?

The Fed shelled out $2 Trillion to parties still unnamed in connection with the mortgage meltdown and the US Government has at least $140 Billion in FNMA and Freddie.

FNMA And Freddie are redundant, and show the failure that is a centrally planned economy and must be reformed out of existence.

Let bankers do the underwriting, let the government go to sleep.

 

[bucs90]

CrusaderFrank..............you're just a racist.

 

[CrusaderFrank]

Buying mortgage from banks, another government function that must end along with Tennessee Valley Authority, Rural Electrification and as relevant as paying farmers to not grow crops.

 

[boedicca]

Central planning my ass. Freddie and Frannie are PRIVATE corporations contracted by the government.

Nope. They were backed by taxpayer guarantees. When all loan guarantees are included, Fannie Mae and Freddie Mac's leverage ranged from 70 to 100:1. Contrast that with the insane 40:1 leverage of investment banks at that time, and FM/FM are even more over the top.

 

[bucs90]

Liberals don't realize the root of this whole mess is housing, and can be traced to Fannie, Freddie and the threats of racism thrown at banks who wouldn't make risky loans. This can be traced back to the early 90's, and the way up through today. It's not the fault of any one president or party, honestly.

In a way, I would place most of the blame on just plain ass American greed and envy, and the need to "Keep up with the Joneses" our culture has. Isn't there something about greed and envy that is bad.......oh yeah those 7 deadly sins. We aren't allowed to talk about those to our kids in school anymore.

 

[NYcarbineer]

They were under-regulated, like the rest of the mortgage business. We've been trying to tell you that.

Pay attention.

 

[Samson]

They were under-regulated, like the rest of the mortgage business. We've been trying to tell you that.

Pay attention.

I recall reading article after article in WSJ, raising red flags over Freddie and Fanny between 2001-2002.

When Bush was President.

Yes........


BOOOOOOOOOOOOOOOOOOOOoooooooooOOOOOSH

 

[jeffrockit]

bankers and real estate agents like it, the rest of us are stuck with the tab.
Central planning just doesn't work as well as free markets.

Um, idiot. The "free market" shenanigans of lenders and wall street are what got us AND Frannie/Freddie into this mess. They were among the last to loosen lending requirements, remember? Oh, and 86%+ of toxic mortgages were issued and owned by PRIVATE LENDERS. You guys really do have the memory of a gnat. Free markets DON'T WORK WITHOUT REGULATION. The private sector cannot be trusted to police themselves. This has been proven time and time and time again.

Central planning my ass. Freddie and Frannie are PRIVATE corporations contracted by the government.

They are pretty corrupt but because the govt makes policy are not under the same scrunity.
Listed are a few of the FM and FM corruption stories stating that FM and FM got themselves in their own mess.

Fannie Mae Slammed With $400M Fine
Fannie Mae Slammed With $400M Fine - CBS News

The Corruption Inside Fannie Mae
The Corruption Inside Fannie Mae - Byron York - The Corner on National Review Online

New Documents Uncovered by Judicial Watch Show Congress Ignored Corruption at Fannie Mae and Freddie Mac for Years
New Documents Uncovered by Judicial Watch Show Congress Ignored Corruption at Fannie Mae and Freddie Mac for Years | Judicial Watch

And as much as AIG was raked over the coals regarding executive bonuses, Freddie and Fannie were allowed to pay the compensation. Frank: Can’t Stop Fannie/Freddie Bonuses | Sweetness & Light
Regulation is fine as long as ALL entities are regulated not just the ones on the opposite political side.

 

[oreo]

Without Googling, does anyone know what the one and only difference is between these 2 disasters?

It's slight, it's so slight that its absurd to have 2 separate entities each employing 5,000+ people and gobbling taxpayer funding like it was matter swirling down the accretion disk of a black hole.

Fannie was the demon spawn of FDR, Freddie was 1970's Dem Congress contribution to Progressive government.

There is no reason why they should be separate entities! They have almost identical mission and structures!

"they buy mortgages on the secondary market, pool them, and then sell them as mortgage-backed securities to investors on the open market. Everything else regarding government guarantees, explicit guarantees, implicit guarantees, subsidies and direct government funding is exactly the same for Freddie Mac as it is for Fannie Mae."

Fannie Mae vs Freddie Mac - Difference and Comparison | Diffen

The one and only difference is that Fannies buys more from thrifts!

Why are we paying twice for the exact same mistake?

Yes--we are paying for the exact same mistake. Our government's policy of "everyone" deserves homeownership" has created this economic disaster.

Fannie Mae/Freddie Mac was initiated during the Carter Administration--under the pretence that lower income families could get lower income housing. Of course the government grew that over the decades to include now 500,000 custom homes.

Bascially our government decided it would be a great idea to co-sign our names to 50% of the mortages in this country using Fannie and Freddie. This while congressional and senate banking boards approved of sub-prime mortgages. A person could walk into a bank--without any down payment--any collateral--less than a desirable credit rating--and at times even no proof of income. They didn't need this stuff--after all they had 310 million American co-signers.

Then Wall street bought these mortgage backed securities up as fast as they could and started trading them in the black hole called the derivities market--aka as the "mother" of all casino's. All warnings of this incoming disaster were ignored by congressional and senate banking boards.

Basically the Federal Government built a house of cards that exploded into global ruin--leaving the American taxpayer holding the bag on all of it.

Why anyone "trusts" our Federal Government to handle anything--anymore--is beyond my comprehension--

Our federal government couldn't keep a lemonade stand out of red ink--

Fannie Mae Eases Credit To Aid Mortgage Lending - NYTimes.com

 

[oreo]

They were under-regulated, like the rest of the mortgage business. We've been trying to tell you that.

Pay attention.

I recall reading article after article in WSJ, raising red flags over Freddie and Fanny between 2001-2002.

When Bush was President.

Yes........


BOOOOOOOOOOOOOOOOOOOOoooooooooOOOOOSH

And where did all this de-regulation come from? The Clinton administration. Both parties are at fault and they both equal the FEDERAL GOVERNMENT.

IOW you were screwed by your government-- Get over it.

Fannie Mae Eases Credit To Aid Mortgage Lending - NYTimes.com