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Rove on Fannie and Freddie

hypocritexposer

Well-known member
http://www.politico.com/politico44/

go to the bottom of the page, short video. 30seconds long, where Rove names the Senator that filibustered against Fannie and Freddie
 

Tex

Well-known member
hypocritexposer said:
http://www.politico.com/politico44/

go to the bottom of the page, short video. 30seconds long, where Rove names the Senator that filibustered against Fannie and Freddie

The foreclosure mess that is happening today is largely a result of sub prime loans going bad, not A loans which was the mainstay of Fannie and Freddie although the drop in the economy because of this crisis may drag them down too with the huge loss of capital in the capital markets and its ripple effects of unemployment in the economy.

Karl Rove is just trying to do his usual politics spin while the executive administration allowed Wall Street to misvalue MBS (mortgage backed securities) they put together and allowed their purchases to be made without the capital requirements necessary by everyone. These were not Fannie and Freddie MBSs but Wall Street's sub prime. They put our whole financial system at risk by their leverage of other people's money while they made billions and paid off politicians willing to go for the ride (as Rove and the executive branch did). When sub prime loans were allowed to be originated with less and less income requirements to get around the fact that people were not getting personal income increases commensurate with their debt, the set up was underway. Allowing the shadow banking system to exist really increased the financial risk to the country. This was all under the control of the executive branch under the SEC and the fed.

Carl Rove is nothing but a spinmeister who wants to get people who can't add to blame someone else for problems that happened on their watch.

It is incredible that people even take him seriously.

When is he going to testify in front of Congress where he might be held accountable for what he says?
 

Mike

Well-known member
This was all under the control of the executive branch under the SEC and the fed.

What happened to Congressional Oversight of the SEC and other Regulatory orgs?

The SEC was established by Congress and has complete authority to monitor their activities and make adjustments.
 

Mike

Well-known member
Tex said:
hypocritexposer said:
http://www.politico.com/politico44/

go to the bottom of the page, short video. 30seconds long, where Rove names the Senator that filibustered against Fannie and Freddie

The foreclosure mess that is happening today is largely a result of sub prime loans going bad, not A loans which was the mainstay of Fannie and Freddie although the drop in the economy because of this crisis may drag them down too with the huge loss of capital in the capital markets and its ripple effects of unemployment in the economy.

Karl Rove is just trying to do his usual politics spin while the executive administration allowed Wall Street to misvalue MBS (mortgage backed securities) they put together and allowed their purchases to be made without the capital requirements necessary by everyone. These were not Fannie and Freddie MBSs but Wall Street's sub prime.

How HUD Mortgage Policy Fed The Crisis
Subprime Loans Labeled 'Affordable'

By Carol D. Leonnig
Washington Post Staff Writer
Tuesday, June 10, 2008; Page A01

In 2004, as regulators warned that subprime lenders were saddling borrowers with mortgages they could not afford, the U.S. Department of Housing and Urban Development helped fuel more of that risky lending.

Eager to put more low-income and minority families into their own homes, the agency required that two government-chartered mortgage finance firms purchase far more "affordable" loans made to these borrowers. HUD stuck with an outdated policy that allowed Freddie Mac and Fannie Mae to count billions of dollars they invested in subprime loans as a public good that would foster affordable housing.

Housing experts and some congressional leaders now view those decisions as mistakes that contributed to an escalation of subprime lending that is roiling the U.S. economy.

The agency neglected to examine whether borrowers could make the payments on the loans that Freddie and Fannie classified as affordable. From 2004 to 2006, the two purchased $434 billion in securities backed by subprime loans, creating a market for more such lending. Subprime loans are targeted toward borrowers with poor credit, and they generally carry higher interest rates than conventional loans.


Today, 3 million to 4 million families are expected to lose their homes to foreclosure because they cannot afford their high-interest subprime loans. Lower-income and minority home buyers -- those who were supposed to benefit from HUD's actions -- are falling into default at a rate at least three times that of other borrowers.

"For HUD to be indifferent as to whether these loans were hurting people or helping them is really an abject failure to regulate," said Michael Barr, a University of Michigan law professor who is advising Congress. "It was just irresponsible."

Congress is expected to vote before its Fourth of July recess on legislation that would strip HUD of its regulatory authority over Fannie and Freddie and give it to a stronger regulator.

Fannie and Freddie finance about 40 percent of all U.S. mortgages, with $5.3 trillion in outstanding debt. Owned by private shareholders but chartered by Congress, they are exempt from state and local taxes and receive an estimated $6.5 billion-a-year federal subsidy because they can borrow money more cheaply than other investors. In return, they are expected to serve "public purposes," including helping to make home buying more affordable.

HUD officials dispute allegations that the agency encouraged abusive lending and sloppy underwriting standards that became the hallmark of the subprime industry. Spokesman Brian Sullivan said the agency and Congress wanted to increase homeownership among underserved families and could not have predicted that subprime lending would dominate the market so quickly.

"Congress and HUD policy folks were trying to do a good thing," he said, "and it worked."

Since HUD became their regulator in 1992, Fannie and Freddie each year are supposed to buy a portion of "affordable" mortgages made to underserved borrowers. Every four years, HUD reviews the goals to adapt to market changes.

In 1995, President Bill Clinton's HUD agreed to let Fannie and Freddie get affordable-housing credit for buying subprime securities that included loans to low-income borrowers. The idea was that subprime lending benefited many borrowers who did not qualify for conventional loans. HUD expected that Freddie and Fannie would impose their high lending standards on subprime lenders.
 

TexasBred

Well-known member
Tex said:
hypocritexposer said:
http://www.politico.com/politico44/

go to the bottom of the page, short video. 30seconds long, where Rove names the Senator that filibustered against Fannie and Freddie

The foreclosure mess that is happening today is largely a result of sub prime loans going bad, not A loans which was the mainstay of Fannie and Freddie although the drop in the economy because of this crisis may drag them down too with the huge loss of capital in the capital markets and its ripple effects of unemployment in the economy.

Karl Rove is just trying to do his usual politics spin while the executive administration allowed Wall Street to misvalue MBS (mortgage backed securities) they put together and allowed their purchases to be made without the capital requirements necessary by everyone. These were not Fannie and Freddie MBSs but Wall Street's sub prime. They put our whole financial system at risk by their leverage of other people's money while they made billions and paid off politicians willing to go for the ride (as Rove and the executive branch did). When sub prime loans were allowed to be originated with less and less income requirements to get around the fact that people were not getting personal income increases commensurate with their debt, the set up was underway. Allowing the shadow banking system to exist really increased the financial risk to the country. This was all under the control of the executive branch under the SEC and the fed.

Carl Rove is nothing but a spinmeister who wants to get people who can't add to blame someone else for problems that happened on their watch.

It is incredible that people even take him seriously.

When is he going to testify in front of Congress where he might be held accountable for what he says?

Well this posts shows your totall imcompetence at understanding mortgage underwriting standard, packaging, pricing and selling into the secondary mortgage market, and mortgage backed securities and derivitives.

No need to testify before congress....they were present and it is in the congressional record (or should be)......they know who fillibustered.
 
A

Anonymous

Guest
Tex said:
hypocritexposer said:
http://www.politico.com/politico44/

go to the bottom of the page, short video. 30seconds long, where Rove names the Senator that filibustered against Fannie and Freddie

The foreclosure mess that is happening today is largely a result of sub prime loans going bad, not A loans which was the mainstay of Fannie and Freddie although the drop in the economy because of this crisis may drag them down too with the huge loss of capital in the capital markets and its ripple effects of unemployment in the economy.

Karl Rove is just trying to do his usual politics spin while the executive administration allowed Wall Street to misvalue MBS (mortgage backed securities) they put together and allowed their purchases to be made without the capital requirements necessary by everyone. These were not Fannie and Freddie MBSs but Wall Street's sub prime. They put our whole financial system at risk by their leverage of other people's money while they made billions and paid off politicians willing to go for the ride (as Rove and the executive branch did). When sub prime loans were allowed to be originated with less and less income requirements to get around the fact that people were not getting personal income increases commensurate with their debt, the set up was underway. Allowing the shadow banking system to exist really increased the financial risk to the country. This was all under the control of the executive branch under the SEC and the fed.

Carl Rove is nothing but a spinmeister who wants to get people who can't add to blame someone else for problems that happened on their watch.

It is incredible that people even take him seriously.

When is he going to testify in front of Congress where he might be held accountable for what he says?

I agree Tex- and not only did many of these Banks, Lending, and Investment Institutions loose all morals and ethics in their chase of GREED- but also the accounting and rating firms that were supposed to be rating the risk of these debts/packages for the purchaser investors...They knew that if they didn't issue a low (false) risk rating- the banks would just shop around until they found a firm that would- and they all became crooks together...

That is the reason all of the Bankers/Investment firm CEO's testifying in front of Congress have asked for Government regulators to oversee the risk- and establishment of International regulators to oversee the risk on these global packages being swapped...
 

Tex

Well-known member
TexasBred said:
Tex said:
hypocritexposer said:
http://www.politico.com/politico44/

go to the bottom of the page, short video. 30seconds long, where Rove names the Senator that filibustered against Fannie and Freddie

The foreclosure mess that is happening today is largely a result of sub prime loans going bad, not A loans which was the mainstay of Fannie and Freddie although the drop in the economy because of this crisis may drag them down too with the huge loss of capital in the capital markets and its ripple effects of unemployment in the economy.

Karl Rove is just trying to do his usual politics spin while the executive administration allowed Wall Street to misvalue MBS (mortgage backed securities) they put together and allowed their purchases to be made without the capital requirements necessary by everyone. These were not Fannie and Freddie MBSs but Wall Street's sub prime. They put our whole financial system at risk by their leverage of other people's money while they made billions and paid off politicians willing to go for the ride (as Rove and the executive branch did). When sub prime loans were allowed to be originated with less and less income requirements to get around the fact that people were not getting personal income increases commensurate with their debt, the set up was underway. Allowing the shadow banking system to exist really increased the financial risk to the country. This was all under the control of the executive branch under the SEC and the fed.

Carl Rove is nothing but a spinmeister who wants to get people who can't add to blame someone else for problems that happened on their watch.

It is incredible that people even take him seriously.

When is he going to testify in front of Congress where he might be held accountable for what he says?

Well this posts shows your totall imcompetence at understanding mortgage underwriting standard, packaging, pricing and selling into the secondary mortgage market, and mortgage backed securities and derivitives.

No need to testify before congress....they were present and it is in the congressional record (or should be)......they know who fillibustered.

TB, you made the allegation, now back it up.

I am very familiar with the underwriting standards, their slide (as I was a mortgage broker during part of the time until I decided to get out of the business) and the packaging and pricing into the secondary markets and mortgage backed securities and the derivatives that were spawned by the MBS securities and others.

In the beginning, the NIQs were just starting and required great credit and assets to back them up. I saw all of the underwriting standards slide (this was not my part of the biz) and the credit relax while Wall Street sold MBS securities as if they were triple A bonds while the mortgage companies were pricing for the risk and pocketing the profits. It was part of the reason I decided to get out of the biz after focusing on the A paper and real estate market. I wanted no part of the bottom part of the biz.

All this capitalization on riskier and riskier assets along with the assumption that higher real estate prices was unrelated to the borrower's documented ability to service the debt based on their income was totally insane. I will not say that taking Fannie private was not part of the problem, as I have said it was. Taking it private allowed the govt. to take a back seat in allowing their problems of greed that were evident so shortly after Clinton let it go. Then came the Bush years of laissez-faire no regulation which made things worse.

The executive branch was head of the regulatory organizations that set limits to capitalist's ability to leverage to satiate their greed and the fed played into every bubble. The bubbles they dealt with should have told them we were about to be in for a deep bath.
 

TexasBred

Well-known member
Tex...you've got it reversed. The "bottom part of the business" was where the trouble was, yet action on that level was dictated by FNMA and FHLMC as well as banking committee and the fed....so their is guilt at all levels. All they wanted was loans....any quality and locals banks made them to meet the need up the ladder. Yep Fannie and Freddie were full of crooks yet they could only sell what they owned and they were the loving children of the system. Don't understand "Taking Fannie Private" as FNMA and FHLM are both publicly owned and at one time were great investments (both stock and MBS). There was adequate regulation but unless enforced it's worthless and there was the powers that be who eventually gave up on being able to enforce existing regs, let alone get new ones passed. There was opposition from the level of our new president to members of congress and others.
 

Tex

Well-known member
TexasBred said:
Tex...you've got it reversed. The "bottom part of the business" was where the trouble was, yet action on that level was dictated by FNMA and FHLMC as well as banking committee and the fed....so their is guilt at all levels. All they wanted was loans....any quality and locals banks made them to meet the need up the ladder. Yep Fannie and Freddie were full of crooks yet they could only sell what they owned and they were the loving children of the system. Don't understand "Taking Fannie Private" as FNMA and FHLM are both publicly owned and at one time were great investments (both stock and MBS). There was adequate regulation but unless enforced it's worthless and there was the powers that be who eventually gave up on being able to enforce existing regs, let alone get new ones passed. There was opposition from the level of our new president to members of congress and others.

I would agree with you it was the bottom of the biz that was the problem. Fannie and Freddie did start their underwriting standards fall due to the pressure of greed and maybe politicians but it was all the debt that Wall Street securitized that was the real problem. They tried to copy what Fannie and Freddie were doing and did it with less and less underwriting standards while either hiding the riskiness of the MBSs in the portfolios they underwrote or just lying about it. The mortgage industry pocketed the risk premiums but sold the mortgage instruments to Wall Street who packaged them and securitized them for mass resale ignoring the risks. It was a huge fraud but most of the problem came from Wall Street who did the Fannie and Freddie thing on their own while ignoring the risks. They sold what amounted to be worthless paper without the tools to analyze the riskiness of the underlying securities (they did have the info on the individual loan docs as a credit report was part of the package and had the ability to verify income and other risks like location--for possible local bubbles).

When Clinton allowed the deregulation of Fannie (by not regulating them like banks are regulated with reserve requirements and the such) and hence allowed the crooks like Raines to milk it in the short term, he was supposed to take the implicit backing of the govt. out of the sold instruments but investors never priced them this way.

When I talk about the privatization of Fannie, I am really talking about the deregulation that allowed Franklin to milk the organization. Here is the article on that:

http://article.nationalreview.com/?q=NDA4YTY1N2ZhMDhmNjIwNTk4OTI2MDYxZWU4NDg1Y2Q=&w=MA==

Here is a good article on Fannie that shows the ties to politicians from both sides of the aisle:

http://www.slate.com/id/2200160/

Still, even with this political scam going on, it is the Wall Street and their sub prime mess that is the largest problem in the current crisis, not Fannie.

We have to shut the revolving door in D.C. We can not allow politicians to plunder our resources by selling out our regulatory systems for campaign donations. It is corrupting government and the enforcement of regulations that protect our system from the above scams.

Bush could have required the re regulation of Fannie through a strong SEC and a few tricks the fed could have done. Instead he did nothing citing the old stand by that they "need new laws".

I didn't see where the USDA needed any new laws to push the packer's baby, NAIS and the importation of beef from Canada but not cows and the current USDA noncompliance of MCOOL.

It was just an excuse. If you are not going to govern when you are head of the government, you don't need to be head of the government. It isn't just a paycheck, it is head of policy for the nation.
 

TexasBred

Well-known member
I agree with about 99% of what you jsut posted, however, I can't really blame any one president. As I posted in another post, he is CEO of the biggest "company" in the world and at any given time half of those are hostile to him, and are being influenced (bought) by special interest groups or whatever you wish to call them so at best he's become a figurehead. The big problem still lies with congress in my mind.
 
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