Freddie & Fannie: Central Planning at its worst

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I gotta agree with the Libertarian/Conservative leaners here.

Except for the obvious racism of the use of the term "black hole" by more than one of you bastards. :razz: (yeah lefties that's a joke, yeah, it's at your expense)
 
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

Yes, the WSJ had numerous editorials, often titled Who Is Angelo Mozillo. They pointed out that Fannie's accounting was so lacking in clarity that if a private corporation had done this people would be going to jail.
Blaming the mortgage meltdown on deregulation is like blaming it on NASCAR. First, there was no deregulation. Second, it was Fannie's status as a government backed entity that got it into trouble to begin with. Without that implicit guarantee (which became expensively explicit) neither entity could ever have come to dominate the market (over 90% of loans were sold to the two entities). There were movements by private banking groups to eliminate their franchise long before people even used the term banking crisis. The regulators in Congress, Barney Frank and Chris Dodd, turned back every attempt.
 
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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.

Um, idiot, in name only. The taxpayers on are on the hook for BILLIONS to these two agencies. As for the private sector, you do know that the "government" pension plan has been bankrupted, the "government" medical plan(s) have been bankrupted, the "government" postal service has been bankrupted.... and the "government" itself is bankrupt. All the while the bankrupters denounce the private sector which BTW, has ALWAYS outperformed the "government". Get a clue.... IDIOT.
 
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

Yes, the WSJ had numerous editorials, often titled Who Is Angelo Mozillo. They pointed out that Fannie's accounting was so lacking in clarity that if a private corporation had done this people would be going to jail.
Blaming the mortgage meltdown on deregulation is like blaming it on NASCAR. First, there was no deregulation. Second, it was Fannie's status as a government backed entity that got it into trouble to begin with. Without that implicit guarantee (which became expensively explicit) neither entity could ever have come to dominate the market (over 90% of loans were sold to the two entities). There were movements by private banking groups to eliminate their franchise long before people even used the term banking crisis. The regulators in Congress, Barney Frank and Chris Dodd, turned back every attempt.

Barney Frank "turned back every attemp?"

"Every Attempt" is quite a euphamism for what was at best casual interest from the GOP, who, after all, controlled the White House, and Congress during part of this period. We may blame some of this on a preoccupation with post 9/11, but the size of the Federal Bureaucracy makes the inability to concentrate on one thing at a time inconceivable.

More likely, the GOP had as much to gain from ignoring the impending crisis as did Barney Frank, Chris Dodd, et al.
 
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--:lol: Get over it.

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

Oh, I agree: The mention of the Bush Administration simply coincides with the WSJ articles in 2001-2002 I happened to be reading.
 
I recall reading article after article in WSJ, raising red flags over Freddie and Fanny between 2001-2002.

When Bush was President.

Yes........


BOOOOOOOOOOOOOOOOOOOOoooooooooOOOOOSH

Yes, the WSJ had numerous editorials, often titled Who Is Angelo Mozillo. They pointed out that Fannie's accounting was so lacking in clarity that if a private corporation had done this people would be going to jail.
Blaming the mortgage meltdown on deregulation is like blaming it on NASCAR. First, there was no deregulation. Second, it was Fannie's status as a government backed entity that got it into trouble to begin with. Without that implicit guarantee (which became expensively explicit) neither entity could ever have come to dominate the market (over 90% of loans were sold to the two entities). There were movements by private banking groups to eliminate their franchise long before people even used the term banking crisis. The regulators in Congress, Barney Frank and Chris Dodd, turned back every attempt.

Barney Frank "turned back every attemp?"

"Every Attempt" is quite a euphamism for what was at best casual interest from the GOP, who, after all, controlled the White House, and Congress during part of this period. We may blame some of this on a preoccupation with post 9/11, but the size of the Federal Bureaucracy makes the inability to concentrate on one thing at a time inconceivable.

More likely, the GOP had as much to gain from ignoring the impending crisis as did Barney Frank, Chris Dodd, et al.

"Casual interest"?? There were two bills specifically designed to change them, never voted on by the Senate. S190, HR1461.
 
Fannie and Freddie are government programs. Worked great for a while and then the market took them down.
Just like every other mortgage company in America.
But those 2 programs accounted for less than 10% of the dollar value of the foreclosure market.
And they didn't appraise the baloney loans.
 
Yes, the WSJ had numerous editorials, often titled Who Is Angelo Mozillo. They pointed out that Fannie's accounting was so lacking in clarity that if a private corporation had done this people would be going to jail.
Blaming the mortgage meltdown on deregulation is like blaming it on NASCAR. First, there was no deregulation. Second, it was Fannie's status as a government backed entity that got it into trouble to begin with. Without that implicit guarantee (which became expensively explicit) neither entity could ever have come to dominate the market (over 90% of loans were sold to the two entities). There were movements by private banking groups to eliminate their franchise long before people even used the term banking crisis. The regulators in Congress, Barney Frank and Chris Dodd, turned back every attempt.

Barney Frank "turned back every attemp?"

"Every Attempt" is quite a euphamism for what was at best casual interest from the GOP, who, after all, controlled the White House, and Congress during part of this period. We may blame some of this on a preoccupation with post 9/11, but the size of the Federal Bureaucracy makes the inability to concentrate on one thing at a time inconceivable.

More likely, the GOP had as much to gain from ignoring the impending crisis as did Barney Frank, Chris Dodd, et al.

"Casual interest"?? There were two bills specifically designed to change them, never voted on by the Senate. S190, HR1461.

OOOOOOOO, someone wrote a bill!!!!!:eek:

TWO WHOLE BILLS!!:eek::eek:

Jeeze, that's impressive.:rolleyes:
 
God, you corporatists are dumb...

"But here's the thing: Fannie and Freddie had nothing to do with the explosion of high-risk lending a few years ago, an explosion that dwarfed the S.& L. fiasco. In fact, Fannie and Freddie, after growing rapidly in the 1990s, largely faded from the scene during the height of the housing bubble.

Partly that's because regulators, responding to accounting scandals at the companies, placed temporary restraints on both Fannie and Freddie that curtailed their lending just as housing prices were really taking off. Also, they didn't do any subprime lending, because they can't: the definition of a subprime loan is precisely a loan that doesn't meet the requirement, imposed by law, that Fannie and Freddie buy only mortgages issued to borrowers who made substantial down payments and carefully documented their income."

Econbrowser: Did Fannie and Freddie cause the mortgage crisis?

Fannie and Freddie did have a role in the crisis due to the very nature of their business, but they are in no way directly to blame for the meltdown. That rests with lenders, mortgage brokers, deregulation and Wall Street traders who were BEGGING congress to make more loans available to sell. Oh, and those bogus appraisals. And the Bush administration - the whole thing started to crumble in 2006 and shrub had 6 years to turn his head aside while the shenanigans were going on. Because regulations are bad and corporations NEVER do the wrong thing to make more $$$.
 
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Fannie and Freddie did have a role in the crisis due to the very nature of their business, but they are in no way directly to blame for the meltdown. That rests with lenders, mortgage brokers, deregulation and Wall Street traders who were BEGGING congress to make more loans available to sell. Oh, and those bogus appraisals.

So, you're saying that Congress, having nothing to do with Fannie and Freddie, was FORCED by "begging lenders" to allow more loaning.

:eusa_eh:

Poor, Innocent Federal Government.:(
 
Fannie and Freddie did have a role in the crisis due to the very nature of their business, but they are in no way directly to blame for the meltdown. That rests with lenders, mortgage brokers, deregulation and Wall Street traders who were BEGGING congress to make more loans available to sell. Oh, and those bogus appraisals.

So, you're saying that Congress, having nothing to do with Fannie and Freddie, was FORCED by "begging lenders" to allow more loaning.

:eusa_eh:

Poor, Innocent Federal Government.:(

Samson, the right wing myth is that government forced the banks to loan more.
The banks made a lot of $$ loaning money, and that is great, so why would ANY entity have to force anyone to make $$?
Most of my work is as a consultant to the banks. No one forced any bank to loan any real $ that caused the financial crisis. No government program forced any bank to loan 650K to someone. That never happened. Baloney myth.
Banks, not government, loan $ and they loved doing so.
So please inform us why the government DID NOT force the banks to continue those loans when the shit hit the fan. How come that never happened?
Because government never forced banks to make over 90% of those loans to begin with.
 
Fannie and Freddie did have a role in the crisis due to the very nature of their business, but they are in no way directly to blame for the meltdown. That rests with lenders, mortgage brokers, deregulation and Wall Street traders who were BEGGING congress to make more loans available to sell. Oh, and those bogus appraisals.

So, you're saying that Congress, having nothing to do with Fannie and Freddie, was FORCED by "begging lenders" to allow more loaning.

:eusa_eh:

Poor, Innocent Federal Government.:(

Samson, the right wing myth is that government forced the banks to loan more.
The banks made a lot of $$ loaning money, and that is great, so why would ANY entity have to force anyone to make $$?
Most of my work is as a consultant to the banks. No one forced any bank to loan any real $ that caused the financial crisis. No government program forced any bank to loan 650K to someone. That never happened. Baloney myth.
Banks, not government, loan $ and they loved doing so.
So please inform us why the government DID NOT force the banks to continue those loans when the shit hit the fan. How come that never happened?
Because government never forced banks to make over 90% of those loans to begin with.

I agree, it is a "right wing myth" that banks were "forced" to lend.

However, it is equally false to say that regulators were simply innocent by-standers, or that Congress was "forced" to appease lenders "begging for lending opportunities.

Are there any Adults in Accountable for their actions?

Apparently not.
 
So, you're saying that Congress, having nothing to do with Fannie and Freddie, was FORCED by "begging lenders" to allow more loaning.

Well, they sure as hell didn't do anything to stop the lenders from creating no income loans, now did they? Why? Because of Wall Street's demand for more loans to bundle. You really should watch "House of Cards" on MSNBC. It's a real eye-opener.

Besides, the government did not have any control over Freddie and Frannie at this point. They were contrected and had a credit line with the treasury dept. LACK OF REGULAITION is what allowed Frannie and Freddie to get involved at all, as they had much higher lending qualification loan standards than the private sector did, at least in the beginning.

CNBC: How housing boom was a house of cards - Business - CNBC TV - msnbc.com
 
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Committee on Oversight and Government Reform released a report on "The Role of Government Affordable Housing Policy in Creating the Global Financial Crisis of 2008"
"In retrospect, President Clinton’s re-branding of prudent down payments of 10 to 20 percent as “barrier to home purchase” takes on great significance. As with the 1995 CRA reform and the Clinton Administration’s decision to allow the GSEs to count subprime loans toward their affordable housing goals, this represented a shift in government policy from one that emphasized equity of procedure to equity of outcome. This emphasis on equity of outcome inevitably created tremendous pressure on regulated institutions to make more loans to low-income borrowers. It also created pressure for secondary market investors such as Fannie Mae and Freddie Mac to buy these loans. The correspondingly lower emphasis on how the loans were being made inevitably meant less attention would be paid to their quality and sustainability.

A Freddie Mac spokeswoman later acknowledged that the Clinton HUD’s decision on subprime loans “forced us to go into that market to serve the targeted populations that HUD wanted us to serve.” Clinton’s HUD Assistant Secretary William C. Apgar, Jr. has since called the decision a “mistake,” while his former advisor Allen Fishbein called the loans that the GSEs started buying to meet their affordable housing goals “contrary to good lending practices,” and examples of “dangerous lending.” President Clinton himself acknowledged his role in efforts to loosen mortgage lending standards when he admitted that “there was possible danger in his administration’s policy of pressuring Fannie Mae…to lower its credit standards for lower- and middle-income families seeking homes.” These accumulated government affordable housing policies, including the Clinton Strategy, trapped millions of Americans in mortgages they could not afford."

"Nonprime loans, which accounted for only 34% of the GSEs’ risk exposure at the end of 2008, were suffering a 6% delinquency rate, accounting for 90% of the GSEs’ losses. Put another way, the GSEs’nonprime loans were 14 times more likely to be in serious delinquency than their prime loans. In the end, failures on nonprime GSE mortgages may account for the failure of roughly 1 in 6 home mortgages in the U.S., or 8.8 million foreclosures. The continuing losses caused by Fannie and Freddie’s binge on junk mortgages have already cost the taxpayers dearly. Under the terms of their conservatorship, the U.S. Treasury is committed to inject up to $400 billion of capital into Fannie and Freddie to offset their losses and maintain solvency. These capital injections take the form of Treasury purchases of preferred stock in the companies."

"Even more than Wall Street firms, Fannie and Freddie used high leverage to borrow money and gamble on low-down payment affordable and speculative mortgages. Unlike Wall Street, however, the GSEs did this with the mandate and the blessing of Congress and successive Administrations, which encouraged them to use their government-granted competitive advantages to engage in a race to the bottom, boosting the national homeownership rate for political gain."

"Washington must reexamine its politically expedient but irresponsible approach to encouraging higher levels of homeownership based on imprudently small down payments and too little emphasis on borrowers’ creditworthiness and ability to repay their loans."


In September 1999 PRIOR TO DEREGULATION The Democrat Bible New York Times
"With pressure from the Clinton administration, Fannie Mae eased credit requirements on loans it would purchase from lenders, making it easier for banks to lend to borrowers unqualified for conventional loans. Fannie Mae's Raines explained that "there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market."

Fannie Mae, the nation's biggest underwriter of home mortgages, does not lend money directly to consumers. Instead, it purchases loans that banks make on what is called the secondary market. By expanding the type of loans that it will buy, Fannie Mae is hoping to spur banks to make more loans to people with less-than-stellar credit ratings.

With this action, Fannie Mae put itself at substantial risk in the event of an economic downturn. "From the perspective of many people, including me, this is another thrift industry growing up around us," warned Peter Wallison, a fellow in financial policy studies at the American Enterprise Institute (AEI). "If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry."

See Housing price chart. The prices shot up in 1997 due to Clintons Fannie/Freddie lowered credit standards & CRA enforcement. That was 2 years prior to deregulation. Deregulation allowed these already ticking time bomb risky assets to be sold to other countries, pension funds & banks causing the contagion to spread world wide. Deregulation was not the prime cause it just added fuel to the fire.
case-shiller-chart-updated.png


GSE Conservatorship "In 2008, Fannie and Freddie have purchased about 80% of all new home mortgages in the United States."

The bailout for Fannie & Freddie was larger than all the other banks combined. The other banks have paid back nearly all the tarp funds while Fannie & Freddie continue to require more tax payer funds. They will not be paying us back!

tarpsubsidies31.png
 
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How does the government not control an enterprise that it sponsors?

Fannie and Freddie are CONTRACTED by the government to provide a specific service - they are private corporations. They are regulated by the SEC like any other securities trader, but the government does not COTROL anything in day to day corporate decisions - at least not until the bailout.
 
See Housing price chart. The prices shot up in 1997 due to Clintons Fannie/Freddie lowered credit standards & CRA enforcement. That was 2 years prior to deregulation. Deregulation allowed these already ticking time bomb risky assets to be sold to other countries & banks causing the contagion to spread world wide. Deregulation was not the prime cause it just added fuel to the fire.

Had we been properly regulated in the first place, the no-income ARM jumbo loan nonsense would have never existed. Had the regulation barring banks from even participating in the kind of shenanigans that went on, this would have never happened. In the end, deregulation somewhere had everything to do with the subprime meltdown. Dereglation and greed.
 
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How does the government not control an enterprise that it sponsors?

Fannie and Freddie are CONTRACTED by the government to provide a specific service - they are private corporations. They are regulated by the SEC like any other securities trader, but the government does not COTROL anything in day to day corporate decisions - at least not until the bailout.

So, your saying that once the government contracts anyone to provide a service, then the govenment is absolved of any responsibility for the quality and quantity of the service.

What a deal!!
 

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