US charges ex-Fannie, Freddie CEOs with fraud

[edthecynic]

BeetsAndSpinach is a gift!
A gift, I tell you!

So wrong, so often!
And, he's done it again....

Here, the actual truth and the actual blame: Democrats.

Read it and weep.
1. September 11, 2003– 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. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.

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. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates.

Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing.
New Agency Proposed to Oversee Freddie Mac and Fannie Mae - NYTimes.com

2. Democrats blocked both attempts to reform Fannie Mae.
Thanks to Sweetness &Light which has printed these two articles in full.

Barack Obama is out trying to blame this all on the Bush Administration, as usual, and scare people as much as he can, — so that he can promise to “rescue” them. But his solutions are the worst possible, and his speeches are irresponsible.

First Trust economists note that:


The most important thing to remember is that the emphasis belongs on the word financial. These financial market problems are not a result of general market weakness, otherwise known as a recession. In fact, real GDP has grown 2.2% in the past year and accelerated to a 3.3% annualized growth rate in the second quarter.

The economy is not taking down investment banks; lousy lending standards and the excessive use of leverage are taking down investment banks.

This whole thing had its’ beginnings in a well-intentioned law during the Carter Administration, The Community Redevelopment Act, which was designed to encourage minority homeownership. President Clinton, influenced by multiculturalism, encouraged it further by dictating where mortgage lenders could lend. Tough new regulations required that lenders increase their lending in high-risk areas where they had no choice but to lower lending standards to make loans that sound business practices had previously rejected. Clinton cronies Franklin Raines and Jamie Gorelick became multimillionaires through their supervision of the quasi-governmental agencies that came to manage the real estate market in America.

Low interest rates in the marketplace persuaded Investment banks to purchase packages of sub-prime loans, and risky decisions and a little greed, of course, let them use too much leverage.

This is not the first time that Investment Banks have failed and disappeared. E.F. Hutton, Goodbody & Company, and Kidder Peabody are three of the vanished. Today’s Investment Banks did not do anything against the law, they just exercised bad business judgment.

Unemployment in the economy is largely confined to the housing crisis with home builders and related trades suffering, as well as the auto industry and related trades and now there will be some investment bankers on the unemployment line.

They are in trouble because they are affected by unfortunate laws made by a Congress that does not always understand what they do. Remember that most congressmen never read the bills that they sign. Congress has long been inclined to well-intentioned regulation to help the poor and save the planet. They fall in love with the goals, and never consider or learn about the consequences of what they do.

It seems kind to help a poor family get into a house larger than they can really afford, with less of a down payment, but it isn’t really kind. Kindness would be helping them to learn how to work hard and save their money, and how to move up to better jobs. Government can make it easier for private industry to build smaller, more affordable houses, without telling them what kind of houses to build, where to build them and under what qualifications to sell them.

The great problem with Socialism is their pursuit of “social justice”. They believe that they can make the poor — not poor — by taking money from the well-to-do and giving it to the poor. Never works. Though there is extraordinary mobility in our society, those who are induced into dependency on government are inclined to lose that mobility.

Barack Obama, in all his economic plans, is extraordinarily invested in the pursuit of “social justice”. That should be a serious warning.
Bush and McCain each tried to reform Fannie Mae. Democrats Blocked them both times. « American Elephants

BULLSHIT! As usual from you. The Dems didn't block anything. The bill passed in the house, but the GOP controlled Senate didn't even bring the bill up for a vote. That's right, the GOP blocked the bill in the senate.
Try again with some more right-wing copy and paste bullshit.

I can always tell when you know you are wrong by the language you use...

Here's some more for you to chew on:

"That Democrats in Congress blocked attempts to reform Freddie and Fannie. The Bush Administration wemt to Congress on three separate occasions asking that regulation of Freddie and Fannie be tightened.

"Prominent Democrats ran Fannie Mae, the same government-sponsored enterprise (GSE) that donated campaign cash to top Democrats. … According to an article by Kathleen Day in the Oct. 8, 2003, Washington Post, Frank opposed giving the Bush administration the right to approve or disapprove business activities that "could pose risk to the taxpayers." He told the Post he worried the Treasury Department "would sacrifice activities that are good for consumers in the name of lowering the companies’ market risks."

Just a month before, Frank had aggressively thwarted reform efforts by the Bush administration. He told The New York Times on Sept. 11, 2003, Fannie Mae and Freddie Mac’s problems were "exaggerated," a gross miscalculation some five years later with costs estimated to be in the hundreds of billions.

"These two entities – Fannie Mae and Freddie Mac – are not facing any kind of financial crisis," Frank said to the Times. "The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing." http://www.businessandmedia.org…

Democrats took over Congress in 2006 and not only failed to recognize the economic problems rooted in Fannie and Freddie, they completely blocked Bush Administration efforts to regulate these out-of-control institutions."
FactsPlusLogic: What past policies got us into the financial crisis?


BeetsAndSpinach....the eternal error!

Again, because it went over your head the first time, the reform bill was passed in the House over Franks' objections, but the GOP in the senate would not even bring it up for a vote.

The Dems didn't take over Congress until 2007, not 2006 as you stupidly claim and it was Speaker Pelosi who actually introduced a Fannie and Freddie reform bill in 2007, HR3221, which became law in 2008.

PompousCheek...the know-nothing know-it-all.

 

[Two Thumbs]

I notice that no Rightie has mentioned Gingrich getting his obscene wad of cash on the deal

And you're the first lefty to mention him. so I'm thinking there's not a lot there.

What was Newts position per F and F?

Did he have inside info like Franks?

Or was he little more than a famous investor?

 

[Mr.Nick]

US charges ex-Fannie, Freddie CEOs with fraud - Yahoo! Finance


Anyone else hoping this leads to a Merry Christmas with Franks in chains?

Or is it just me?

We may as well charge the ALL those in federal/state government that supported this forced lending bullshit as co-conspirators as well...

Barney Frank knows whats about to happen and that's why he is retiring and taking his boy toy on an extended vacation to the Caribbean...

Dems will be falling like dominoes over this...

 

[Two Thumbs]

US charges ex-Fannie, Freddie CEOs with fraud - Yahoo! Finance


Anyone else hoping this leads to a Merry Christmas with Franks in chains?

Or is it just me?

We may as well charge the ALL those in federal government that supported this forced lending bullshit as co-conspirators as well...

That's what I'm hoping for.

You know as well as I do, that if this sparks a criminal case, and these suits are looking at jail, they will rat out everyone they can for less time.


Can't you just see the FBI walking onto the floor of Congress to perp walk out some Senators? :drool:

 

[Teals_Of_Wonder]

How did A-Hole Sambo Rains walk away with 90 Million? why isnt the NAACP bitchin about this ? !!!

 

[Mr.Nick]

Furthermore I would love to know what all these democrat idiots are going to say now when they're asked to testify when they previously stated Feddie and Fannie were perfectly sound 5 years ago????

They have to either admit they're liars and resign from their posts or commit perjury...

 

[Mr.Nick]

US charges ex-Fannie, Freddie CEOs with fraud - Yahoo! Finance


Anyone else hoping this leads to a Merry Christmas with Franks in chains?

Or is it just me?

We may as well charge the ALL those in federal government that supported this forced lending bullshit as co-conspirators as well...

That's what I'm hoping for.

You know as well as I do, that if this sparks a criminal case, and these suits are looking at jail, they will rat out everyone they can for less time.


Can't you just see the FBI walking onto the floor of Congress to perp walk out some Senators? :drool:

This will be the "investigation" then "trial(s)" of the century...

Democrats will be falling like dominoes...

This is a conspiracy.....

Funny how Frank retired and two weeks later this lawsuit is filed???

 

[editec]

The executives were accused of understating the level of high-risk subprime mortgages that Fannie and Freddie held just before the housing bubble burst. "Fannie Mae and Freddie Mac executives told the world that their subprime exposure was substantially smaller than it really was," said Robert Khuzami, SEC's enforcement director.

Seems to me that the whole industry was doing exactly the same thing.

I note this, not in defence of the EXECS at FANNY or FREDDIE, but merely to suggest that there's still a LOT OF CEOs of similar financial institutions who have yet to be so charged.

My point here this is merely a GOOD START to ending this MORAL HARARD that the BANSTERS have created for themselves.

 

[Two Thumbs]

The executives were accused of understating the level of high-risk subprime mortgages that Fannie and Freddie held just before the housing bubble burst. "Fannie Mae and Freddie Mac executives told the world that their subprime exposure was substantially smaller than it really was," said Robert Khuzami, SEC's enforcement director.

Seems to me that the whole industry was doing exactly the same thing.

I note this, not in defence of the EXECS at FANNY or FREDDIE, but merely to suggest that there's still a LOT OF CEOs of similar financial institutions who have yet to be so charged.

My point here this is merely a GOOD START to ending this MORAL HARARD that the BANSTERS have created for themselves.

The bif difference is F and F have been supported by the taxpayer for a long long time.

The banks got bailed out.

 

[Intense]

Furthermore I would love to know what all these democrat idiots are going to say now when they're asked to testify when they previously stated Feddie and Fannie were perfectly sound 5 years ago????

They have to either admit they're liars and resign from their posts or commit perjury...

That only applies to Republicans. Try again.

 

[PoliticalChic]

BULLSHIT! As usual from you. The Dems didn't block anything. The bill passed in the house, but the GOP controlled Senate didn't even bring the bill up for a vote. That's right, the GOP blocked the bill in the senate.
Try again with some more right-wing copy and paste bullshit.

I can always tell when you know you are wrong by the language you use...

Here's some more for you to chew on:

"That Democrats in Congress blocked attempts to reform Freddie and Fannie. The Bush Administration wemt to Congress on three separate occasions asking that regulation of Freddie and Fannie be tightened.

"Prominent Democrats ran Fannie Mae, the same government-sponsored enterprise (GSE) that donated campaign cash to top Democrats. … According to an article by Kathleen Day in the Oct. 8, 2003, Washington Post, Frank opposed giving the Bush administration the right to approve or disapprove business activities that "could pose risk to the taxpayers." He told the Post he worried the Treasury Department "would sacrifice activities that are good for consumers in the name of lowering the companies’ market risks."

Just a month before, Frank had aggressively thwarted reform efforts by the Bush administration. He told The New York Times on Sept. 11, 2003, Fannie Mae and Freddie Mac’s problems were "exaggerated," a gross miscalculation some five years later with costs estimated to be in the hundreds of billions.

"These two entities – Fannie Mae and Freddie Mac – are not facing any kind of financial crisis," Frank said to the Times. "The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing." http://www.businessandmedia.org…

Democrats took over Congress in 2006 and not only failed to recognize the economic problems rooted in Fannie and Freddie, they completely blocked Bush Administration efforts to regulate these out-of-control institutions."
FactsPlusLogic: What past policies got us into the financial crisis?


BeetsAndSpinach....the eternal error!

Again, because it went over your head the first time, the reform bill was passed in the House over Franks' objections, but the GOP in the senate would not even bring it up for a vote.

The Dems didn't take over Congress until 2007, not 2006 as you stupidly claim and it was Speaker Pelosi who actually introduced a Fannie and Freddie reform bill in 2007, HR3221, which became law in 2008.

PompousCheek...the know-nothing know-it-all.

Oh, man...will miracles never cease!

This was the first funny post I've ever seen you do!

"PompousCheek...the know-nothing know-it-all."

This was funny!!!


But...fair warning: just leave my cheeks out of this!

I have a black belt in Karioke!
I’m warning you: I had to kill someone, once- and it bothers me every day of
my life- but if I don’t want Girl Scout Cookies, I don’t want ‘em!

Guns don’t kill people….I do.
Don’t make me violate my probation!

 

[Toro]

The complaint is extraordinarily weak. Taking its cues from the Wallison/Pinto school of inflated data, it claims that Fannie and Freddie failed to reveal to investors the true extent of their subprime portfolios. To make this claim, however, the S.E.C. has included categories of loans, such as so-called Alt-A loans, that may have had a subprime characteristic, such as low documentation, but which were often made to borrowers with high credit scores.

There are no damning internal e-mails in the complaint, with executives contradicting their public statements, and no examples of sleazy insider stock sales. A quick look at Fannie and Freddie financial disclosure statements shows that they clearly laid out the credit characteristics of their mortgage portfolios, even if they didn’t label every non-30-year-fixed loan as subprime. More than a year ago, a federal judge presiding over a shareholder lawsuit against Fannie Mae threw out the allegations surrounding lack of disclosure. Why? Because, he said, the company’s disclosure of its subprime portfolio had been adequate.

There is something else missing from the S.E.C. complaint, which Wallison and Pinto also conveniently ignore: default data. The truth is, for all their mistakes, Fannie and Freddie had some scruples about the nonprime loans they guaranteed or bought — and they have the default numbers to prove it.

For instance, according to David Min, a leading Wallison critic at the Center for American Progress, as of the second quarter of 2010, the delinquency rate on all Fannie and Freddie guaranteed loans was 5.9 percent. By contrast, the national average was 9.11 percent. The Fannie and Freddie Alt-A default rate is similarly much lower than the national default rate. The only possible explanation for this is that many of the loans being characterized by the S.E.C. and Wallison/Pinto as “subprime” are not, in fact, true subprime mortgages.

http://www.nytimes.com/2011/12/20/opinion/nocera-an-inconvenient-truth.html?_r=2

 

[edthecynic]

I can always tell when you know you are wrong by the language you use...

Here's some more for you to chew on:

"That Democrats in Congress blocked attempts to reform Freddie and Fannie. The Bush Administration wemt to Congress on three separate occasions asking that regulation of Freddie and Fannie be tightened.

"Prominent Democrats ran Fannie Mae, the same government-sponsored enterprise (GSE) that donated campaign cash to top Democrats. … According to an article by Kathleen Day in the Oct. 8, 2003, Washington Post, Frank opposed giving the Bush administration the right to approve or disapprove business activities that "could pose risk to the taxpayers." He told the Post he worried the Treasury Department "would sacrifice activities that are good for consumers in the name of lowering the companies’ market risks."

Just a month before, Frank had aggressively thwarted reform efforts by the Bush administration. He told The New York Times on Sept. 11, 2003, Fannie Mae and Freddie Mac’s problems were "exaggerated," a gross miscalculation some five years later with costs estimated to be in the hundreds of billions.

"These two entities – Fannie Mae and Freddie Mac – are not facing any kind of financial crisis," Frank said to the Times. "The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing." http://www.businessandmedia.org…

Democrats took over Congress in 2006 and not only failed to recognize the economic problems rooted in Fannie and Freddie, they completely blocked Bush Administration efforts to regulate these out-of-control institutions."
FactsPlusLogic: What past policies got us into the financial crisis?


BeetsAndSpinach....the eternal error!

Again, because it went over your head the first time, the reform bill was passed in the House over Franks' objections, but the GOP in the senate would not even bring it up for a vote.

The Dems didn't take over Congress until 2007, not 2006 as you stupidly claim and it was Speaker Pelosi who actually introduced a Fannie and Freddie reform bill in 2007, HR3221, which became law in 2008.

PompousCheek...the know-nothing know-it-all.

Oh, man...will miracles never cease!

This was the first funny post I've ever seen you do!

"PompousCheek...the know-nothing know-it-all."

This was funny!!!


But...fair warning: just leave my cheeks out of this!

I have a black belt in Karioke!
I’m warning you: I had to kill someone, once- and it bothers me every day of
my life- but if I don’t want Girl Scout Cookies, I don’t want ‘em!

Guns don’t kill people….I do.
Don’t make me violate my probation!