Tag Archives: Fannie and Freddie

Gay Liberal Rep. Barney Frank Calls it Quits: Good Riddance

After 32 long years of representing Massachusetts District 04 in the U.S. House of Representatives, Congressman Barney Frank has announced he will not be running for reelection in 2012. The openly gay Liberal (see fake Democrat) says his new district lines would force him to campaign aggressively, a task his 71 year old body may not be up to handling any longer. With the other half of the Dodd-Frank financial reform bill, Chris Dodd out in California working as a stealth lobbyist for the Hollywood motion picture association, now both [supposed] financial reform architects will be far away from DC by the time the real nasty elements of the Dodd-Frank bill start to be enforced in the coming years.

Photo: Saul Loeb/AFP/Getty Images

When researching other articles about Frank’s retirement, there was one disgusting pattern of irresponsibility in pushing of the gay lifestyle embedded in many of the so called news articles. Being an effective legislator is one thing, but celebrating someone’s perversions of sexual relationships such as in the same sex lifestyle of Barney Frank, as being supposedly some kind of heroic example for our children to follow is a disgusting bunch of societal manipulation that should be called out every time it rears it’s ugly, perverted head in our society today! While the ignorant puppet-parrots of the left might not mind their children going to sleep with visions of Barney Frank mounting his man-child lover whom worked at Fannie Mae, or vice-versa, as in gay Liberal Barney Frank being mounted by his man-child lover, you sick, demented, perverted parasites of the left need to keep your queer lifestyles out of all of America’s children’s lives and schools. Parents, you need to pay attention more so than ever today. For those of you who want grandchildren from your own bloodlines, maybe you should be teaching your children about how the fact that them giving you authentic grandchildren of your bloodlines and lineage becomes an impossibility when 2 men or 2 women marry each other.

Gay Liberal Barney Frank is getting out of Congress right before many of his Dodd-Frank financial rules take effect. His bed-pal (pun intended) in the Dodd-Frank bill has already high-tailed it out of DC. The Dodd-Frank [supposed] financial reform bill has some nasty elements yet to be exposed, and gay-boy-lover Frank does not want to be around when those facts come to light.The Dodd-Frank {supposed} financial reform, bill did not address the biggest fraud that caused the housing crash of 2008 in the first place: Fannie Mae and Freddie Mac and Progressives everyone-deserves-a-house-regardless-of-
proven-ability-to-pay vote-begging schemes of the 2006-2008 elections. Yes, the Progressive Gay Liberal Barney Frank is finally retiring from Congress.

Good frigging riddance!

Newt Gingrich's Record: Uncomfortable But True

I’m going to say something uncomfortable to many of you, but it has to be said:

Newt Gingrich has a history of flip-flopping on issues which rivals that of Mitt Romney.

There, I said it. I’m not the only one to say it, either.

Let’s look at Gingrich’s record:

On global warming: He supported government sponsoring of alternative energy programs. He supported cap-and-trade. He supported ethanol subsidies. “Green” was the fad, people were spellbound by it, and Newt being the clever politician he is, he got behind it, too.

And then there’s Fannie Mae and Freddie Mac. When asked about his lobbying efforts on their behalf, he lied. He claimed he never lobbied for them. When proof of payment from them to him was made public, he claimed he worked for them as an historian. Do people seriously believe this? A financial institution hires an historian about as often as the Marine Corps hires an interior decorator.

And then there’s the substance of the “historical analysis” he allegedly gave them (from the National Review link two paragraphs below):

It wasn’t obvious until 2007… Initially, it wasn’t Fannie Mae and Freddie Mac. Initially, it was things like Countrywide, but the minute you started getting people who could buy houses with no credit, no money down, I mean, these things are insane. And I was cheerfully saying that in my public speeches.

Gingrich contradicts himself here: It certainly was obvious, long before 2007, that a policy of government guarantee of loans without proof of the borrower’s ability to repay was a bad idea (and defies basic common sense). The existence of this program was well-known within government circles and by “policy wonks” (such as yours truly), but largely ignored by the media and the public at large. I have also criticized Herman Cain for the same failure of common sense in this regard.

On government-run medicine, Gingrich’s record rivals that of many prominent Democrats. He was an early champion of the individual mandate, more than a decade before Romneycare. He now excuses himself from the criticism Romney recieves, claiming that his endorsement of an individual mandate was an effort “to block Hillarycare“. Let’s state this another way: Gingrich’s response to a massive government healthcare initiative was to offer a slightly less-massive initiative of his own.

Gingrich was also one of the minds behind Medicare Part D. Newt again excuses himself from criticism for this multi-trillion-dollar giveaway, claiming that it helped reduce the cost of government-provided health care by subsidizing medicines in lieu of more-expensive surgeries, ignoring one of the basic principles of government interference in the market: Subsidizing a product makes it more expensive in the long-run. If the government gives people a dollar to buy an apple, the cost of an apple goes up by a dollar.

Gingrich, in keeping with his long-standing record of favoring greater government intervention in the health care industry, described Paul Ryan’s proposal to convert Medicare into a premium support plan as “right-wing social engineering“. Of course, Gingrich changed his tune when he caught flak for saying this, and has spent the last six months crafting an “alternative history” of his 17+ year record of supporting socialized medicine.

Jacob Sullum from Reason made an excellent point on this topic: Gingrich’s rhetoric actually endangers real reforms while giving the public a painless-sounding but totally ineffective placebo of “cutting waste, fraud and abuse”- a rhetoric he (along with numerous Democrats) also applies to other areas of government spending by advocating ‘modernization’, rather than actual cutbacks, as his primary concept for controlling the cost of big-government programs, as if new computers will make big government acceptable.

In sum: I’m frankly disturbed by the recent fascination with Gingrich and the amnesia regarding his record. Somehow, conservatives have developed a belief that intellectualism and con artistry are mutually exclusive. Voters have been lulled by the superficially-impressive nature of his speeches.

This means the Tea Party effort to push out slick salesmen in favor of principled, fiscally-minded, small-government representatives is failing. And “slick salesman” is an apt description of Gingrich’s career: People wanted free medication for Grandma and Grandpa, and Newt delivered. People wanted a house they couldn’t afford, and Newt delivered. Gingrich will give the public whatever they want, and sound convincingly principled while doing it. The fact that Newt also participated in welfare reform and budget balancing isn’t a demonstration of his bona fides, it’s merely another thing the public asked for and got (for a brief period).

The notion that Gingrich is the ideal “not-Romney” candidate is wholly misguided: Newt Gingrich is Mitt Romney without running shoes.

Obama's 'Underwater' Homeowner Rescue Already Sinking

President Obama is travelling several Western states to talk up a re-vamp of his failed “Home Affordable Refinance Program” (HARP) in another big-government attempt to rescue homeowners who owe more on their houses than the real estate is worth.

Beginning in Nevada, the “We Can’t Wait” campaign is intended to show-up Congress while side-stepping them completely. Congress had passed HARP in an effort to help homeowners with troubled mortgages. The program promised to help about 5 million Americans, but in truth just  822,000 have been assisted – not even 10% of those upside-down on their home loans.

The new rules in “HARP Phase II” will loosen the rules on who can take advantage of the government program and reduce the fees the borrower must pay.

 Eliminating certain risk-based fees for borrowers who refinance into shorter-term mortgages and lowering fees for other borrowers;
 Removing the current 125 percent LTV ceiling for fixed-rate mortgages backed by Fannie Mae and Freddie Mac;
 Waiving certain representations and warranties that lenders commit to in making loans owned or guaranteed by Fannie Mae and Freddie Mac;
 Eliminating the need for a new property appraisal where there is a reliable AVM (automated valuation model) estimate provided by the Enterprises; and
 Extending the end date for HARP until Dec. 31, 2013 for loans originally sold to the Enterprises on or before May 31, 2009.

In the original program, only those that owed up to 125% more than the property was worth could be accepted into the program. Now, there will be no limit to the amount the borrower may owe in relation to the value of the property.

If Jim, as an example, owed $250,000 on his house and the home was only worth $175,000, he previously would have  been denied a re-finance under the HARP program. Now, as long as Jim’s loan is backed by Fannie Mae/Freddie Mac, he can be approved. This will put the taxpayers on the hook for a quarter million dollars with only 175k in collateral. Who runs a business this way?

The program is also expected to only provide minimal relief. Due to the 20 year maximum term for the refinanced mortgage, monthly payments may only be 20-30 dollars less per month according to an example provided by the Federal Housing Finance Agency (FHFA).

If the borrower chose a 20-year loan term at a rate of 4.25 percent (mortgage rates tend to be less for shorter term mortgages), the monthly payment would be $1238 ($26 less than the borrower currently pays) and the borrower’s loan balance would reach $160,000 in five-and-one-half years

The real purpose of the new program may be even more deserving of investigation. This program doesn’t appear to modify existing loans. Instead, it replaces one loan for another. It’s  a traditional re-finance with one major difference – Fannie and Freddie are letting the banks off the hook for any illegitimate loans they originated as long as they re-fi through this program. David Dayen at FDL puts it succinctly:

So, earlier, I said “what’s not to like.” Here’s what’s not to like. The “reps and warranties” part of this. When you refinance a loan, you’re essentially creating a new mortgage, unlike a loan modification, where you modify the old mortgage. Under the plan, the FHFA will eliminate their ability to force repurchases on these old loans, and they would lower their ability to force repurchases on the new loans created. There will be a “modest fee” associated with relieving these reps and warranties, according to Donovan, which won’t be set until November 15. They will be lower than the current risk-based fees that Fannie and Freddie charge.

What does this mean? A “reps and warranties” case is a case where the loan was originated improperly. When Fannie and Freddie get sold a bad loan like this, they have the right to force it back on the originator. New lenders are reluctant to refinance such loans, because they become liable for the put-back.

What this means is that FHFA will essentially settle on all the loans that get refinanced for a “modest fee,” which we can safely assume will be next to nothing. And we know that a substantial amount of loans, perhaps a majority, were illegally originated during the bubble years. You’re letting the lenders who originated the loans off the hook for that, in exchange for allowing more refis.

FHFA estimates that this program may double the current number of re-finances by the end of 2013. An additional $447 Billion to help perhaps another 882,000 home owners over the next two years?  That’s more than half-a-million dollars per re-finance. Remember, they aren’t giving them half-a-million bucks, that’s just what Obama’s program costs to service 882,000 loans by the FHFA estimate.

“We Can’t Wait” may be yet another attempt to do anything quickly, no matter how ill-conceived it may be. Of some concern is where did the money to fund this come from if Congress didn’t approve it?

At a cost of $447 Billion this is a bank rescue and a move to prop up inflated real-estate prices all under the disguise of helping home owners. This ought to push the Occupy Wall Street crowd right over the edge .. but it won’t – because it came from Democrats.

 

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More Government Home Mortgage Refinancing Schemes Coming Soon

There are currently two bills in Congress that have been proposed to supposedly “fix” the current mortgage crisis. The very same mortgage crisis that was caused by big government intervention into the mortgage business sector in the first place by the wizards of Congress.  Millions of honest, hard-working people are struggling to stay in their homes today. They now owe way more than their house is worth, thanks largely to Congress mandating the ignorant “everyone has a right to own a home”  programs which forced lenders to hand out loans to high risk /unqualified borrowers in the first place.   Fannie Mae and Freddie Mac first started gobbling up sub-prime securities due to mandates they received from Congress in 2000, and the Clinton-era Housing and Urban Development Department, ( (HUD)  which attempted to make housing “more affordable to minorities and disadvantaged people by using their vast (soon to be taxpayer- funded) resources to purchase massive amounts of sub-prime mortgage securities. In 2000, Fannie and Freddie held less than 2.5% of the mortgage market, then it expanded to hold over 40% by 2004. Today? Fannie and Freddie now guarantee more than 70% of all home loans in America. As foreclosures hit record highs almost every month during the past two years,  Fannie and Freddie are now bleeding your tax dollars at an ever-increasing rate and the government wants to once again take action to stem the foreclosure crisis. (While also covering up the fact that their meddling in the mortgage business caused this crisis to begin with)

President Obama refused to deal with the Fannie and Freddie tax-payer funded black hole with his “supposed”  Dodd-Frank Wall-Street Reform and Consumer Protection Act last year. Now the Democrats and Barack Obama are bashing the Bank of America for charging $5 a month debit card fees, which were needed to stem the bleeding caused by the Dodd-Frank bill in the first place. This is exactly why people are fed up with big government control and intervention into every aspect of our free market system today. The Dodd-Frank bill is set up to allow the U.S. Government to close all small banks in the U.S. through their fake “stress tests” and then create a central government-run banking system.  Check the proof that backs up that statement from ABC News Business Blog:

“The Federal Deposit Insurance Corporation (FDIC) announced its 73rd bank closure this year, pacing well behind the gargantuan number of 157 total bank closures in 2010.” (emphasis mine)

When the Federal Government closes all the small independent banks in America, who in the hell do you think will control the entire banking system then? This is exactly why Newt Gingrich constantly repeats the statement that we need to repeal the Dodd-Frank bill on day one of the new GOP President’s administration in 2013.  Government control of our entire banking system is a clear and present danger to our free market system.

When we add the Federal Housing Authority to Fannie and Freddy’s percentage of all home loan mortgages we see direct government control of 90% of all U.S. mortgages! Now that the damage and wealth redistribution has been done by government intervention into the mortgage industry, we see that Fannie and Freddie are backing off of  Jumbo housing loans in an article from The Real Deal Online;

In its bid to reduce taxpayers’ $141 billion exposure to housing mortgage risk and spur private investment in the sector, Fannie Mae, Freddie Mac and the Federal Housing Administration stopped backing jumbo housing loans. According to the Wall Street Journal, that move could put the housing market, and specifically housing prices, in a further funk.

Government meddling has the housing and mortgage industry in a shambles, so now they want to make the banks pay the price, which we see here:

The three entities ( Fannie, Freddy and the FHA) backed about 90 percent of home mortgages in recent months, thanks to the expanded loan limits. But the limits were restricted this month, meaning more buyers will have to turn to private banks to secure mortgages. Those loans are harder, and more expensive, to obtain. Banks would need to issue 56 percent more jumbo mortgages to fill the gap.

So what are the wizards of Congress to do to fix the very mess they, themselves have created in the mortgage debacle in America? Why, let’s propose two more government mortgage refinancing bills in Congress shall we? Current  House resolution 363 is titled The Housing Opportunity and Equity Act. Current Senate bill 170 is titled the Helping Responsible Homeowners Act.  Two different bills with two very different agendas, from savingtoinvest.com:

Housing Opportunity and Mortgage Equity Act (H.R. 363)  • Allows for refinancing of loans owned or guaranteed by Fannie Mae and Freddie Mac.
• Both current and delinquent borrowers are eligible.
• Prohibits appraisal to establish current loan to value.
• Limits interest rate and fees borrower may be charged on new loan.
Helping Responsible Homeowners Act
(S. 170)
 • Allows for refinancing of loans owned or guaranteed by Fannie Mae and Freddie Mac.
• Borrower must be current on existing mortgage.
• Removes limit on current loan to value.
• Limits interest rate and fees (including loan level price adjustments and delivery fees) borrower may be charged on new loan.

Look at HR 363 above. They want to help BOTH those who are current on mortgage payments and those who are delinquent. (what about proven ability to actually pay for the loan there?) They also want to prohibit appraisals on the homes being refinanced! Who, in their right mind would ever refinance a home loan without getting an appraisal to make sure it hasn’t been destroyed or burnt to the ground beforehand?   The Senate bill would seem to be a more responsible way  to help folks who are under water in their home loans today, but in today’s “compromising” Congress we can bet that the final bill will continue down the path towards the “everyone deserves a home whether they can actually pay for it or not” ignorant Liberal ideology. President Obama was scheduled to give another speech about what he plans to do about the mortgage crisis last week, but that didn’t happen to my knowledge.

 Pay attention as Congress tries to fast-track some form of Mortgage Refinancing plan once again in the coming weeks. Just remember the fact that, while the wizards of Congress are up in DC making wonderful speeches about their “newest fix” for the mortgage crisis plans, the fact remains that they are the ones who created the crisis in the first place.   2012 just can’t get here fast enough!

Fannie Mae Redemption

WASHINGTON, Sept. 12, 2011 /PRNewswire/ — Fannie Mae (OTC Bulletin Board: FNMA) will redeem the principal amounts indicated for the following securities issues on the redemption dates indicated below at a redemption price equal to 100 percent of the principal amount redeemed, plus accrued interest thereon to the date of redemption:

Principal

Amount

Security

Type

Interest

Rate

Maturity Date CUSIP Redemption Date
$75,000,000 MTN 2.000% March 22, 2019 3136FPGX9 September 22, 2011
$57,000,000 MTN 2.250% March 22, 2016 3136FRDE0 September 22, 2011

Government Causes Housing Crash Then Sues Everyone Else

housing crisisThe U.S. government on Friday sued 17 banking firms for their roles in the housing crash. The financial institutions are being accused of selling $196 billion dollars of now-toxic mortgage backed securities to Fannie Mae and Freddie Mac.

The Federal Housing Agency (FHA) filed suits against Bank of America, Citigroup, JP Morgan chase and 14 others. FHA is the government agency that oversees Fannie and Freddie which raises questions. Is this just a maneuver for Fannie and Freddie to recover some portion of the massive losses that they were responsible for taking on?

Fannie and Freddie have notoriously backed loans with questionable characteristics. So-called NJNA (no job no assets) loans and loans where the borrower was likely borrowing more than they could afford. This created the easy credit climate where banks, under pressure from regulators and community groups like ACORN, were pressed to make sub-prime loans. Now, the government is coming after them.

The law suits will likely have a chilling effect on the economy. Banks as a whole will now be even more timid about being involved with FHA loans that are backed by Fannie and Freddie in fear of reprisals in coming years should the housing crisis worsen.

The banks have spent the last three years rebuilding their balance sheets. Now, the legal fallout from the mortgage crisis is creating a new wave of liabilities for them and uncertainty for the financial system. News that the economy added no jobs in August and that the lawsuits were pending slammed the stock market Friday and sent bank stocks tumbling. – The Wall Street Journal

Making it more difficult for home buyers to get loans will continue to weaken housing demand and depress prices. Current home owners will continue to see their equity, and therefor personal wealth, dwindle.

Bank were pressured by progressive groups and Democrat lawmakers to make loans to lower-income buyers that in many cases could not afford the homes they were buying. In order to defray the risk, financial institutions then packaged up those mortgages into mortgage-backed securities (MBS) which Fannie and Freddie then bought – as did many other institutions.

The suits are specific to the mortgage-backed securities sold to Fannie and Freddie stating that the banks misrepresented that the securities met the FHA’s underwriting rules and overstated the ability of the borrowers to repay the loans.

While the President needs the banking industry to loosen lending rules to create any semblance of a recovery, having his administration go after the largest institutions able to do so will likely create yet another government impediment to growth in the economy.

On one hand the administration is asking these banks to make credit more available to home buyers and home owners while simultaneously suing them for having done just that in the past. That kind of uncertainty and mixed-messaging is precisely what is hindering an economic turn-around.

If the government wants to place blame, a closer inspection of FHA, Fannie and Freddie, and progressive housing policies should be their focus.
The institutions so far named in the law suits are: Ally Financial, GMAC LLC (or what was GMAC), Bank of America, Barclays, Citigroup, Countrywide, Credit Suisse, Deutsche Bank, First Horizon , General Electric, Goldman Sachs, HSBC, JPMorgan Chase, Merrill Lynch, First Franklin Financial, Morgan Stanley, Nomura Holdings, The Royal Bank of Scotland(RBS), and Societe Generale

Fannie and Freddie: Dark Clouds Looming Over Near-Term Outlook

WASHINGTON, Aug. 22, 2011 /PRNewswire/ — The economy was hit by a barrage of disappointing news during the last month, which led to a significant downgrade in the overall macro economic forecast released today by Fannie Mae’s (OTC Bulletin Board: FNMA) Economics & Mortgage Market Analysis Group. While the August 2011 Economic Outlook does not forecast a double dip recession, the downgraded forecast reflects the Group’s view that the probability of another recession is close to a coin toss. For all of 2011, economic growth is expected to downshift to 1.4 percent from 3.1 percent in 2010. Growth is expected to pick up in 2012, but only to about 2.0 percent, compared with 3.1 percent projected in the July forecast.

“Key factors, including revisions to gross domestic product (GDP) data, have revealed that we have a bigger hole to dig out of, which explains the consumer angst over the lack of employment growth,” said Fannie Mae Chief Economist Doug Duncan. “Moreover, European financial market and fiscal policy turmoil, coupled with the U.S. debt ceiling debate, have hit on consumer confidence, which is at recessionary levels.”

“Macro economic factors are clearly driving the mindset of consumers and housing is being impacted by this,” Duncan continued. “However, housing has moved into second position behind general economic concerns among consumers, which is demonstrated in our National Housing Survey results. Our July data shows that 70 percent of Americans think the economy is on the wrong track, up from 60 percent a year ago. In turn, despite historically low interest rates, consumers are still saying they don’t see this as a good time to go out and borrow money to buy a house.”

Housing activity is expected to weaken along with the overall economy due to a renewed decline in business and consumer confidence and a softening hiring trend. One exception is the rental housing market. The rental vacancy rate (the share of rental housing that is vacant and for rent) plunged from 9.7 percent to 9.2 percent in the second quarter of 2011, the lowest rate in nine years. This is consistent with the declining trend in the homeownership rate, indicating that a rising share of households have shifted to renting over owning.

Fannie and Freddie Fatcats Still Raking in Taxpayer Dollars. $35M in Bonuses

Fannie Mae and Freddie Mac executives raked in over $35 million dollars in bonuses while sucking another $153 BILLION dollars out of taxpayers for being nothing more than an epic failure.

A report issued Thursday by the Federal Housing Finance Agency’s Office of the Inspector General shed some light on the following payoffs for incompetence, ineptitude or just plain theft of taxpayer dollars:

  • At Fannie Mae (Federal National Mortgage Association), its chief executive officer received $9.3 million in total compensation in 2009 and 2010, the report reveals. The CEO is Michael J. Williams, who joined the company in 1991.
  • At Freddie Mac (Federal Home Loan Mortgage Association), CEO Charles E. Haldeman Jr., former head of Putnam Investments, made $7.8 million in the two years since the company was taken over by the federal government.
  • Fannie Mae’s chief financial officer made $4.6 million, and its chief accounting officer/general counsel received $4.5 million.
  • At Freddie Mac, the CFO made $3.9 million, and the general counsel/secretary received $5.1 million
  • In all, the top six executives made $35.4 million. Meanwhile, total losses at the two companies could reach $363 billion through 2013, according to government estimates.

So who just keeps on authorizing these huge bonuses for the wholesale theft and abuse of taxpayer dollars? What the Federal Housing Authority  bureaucrats of course! Why does this kind of taxpayer dollar theft continue?  It is called Crony-Capitalism and is explained in detail here.

The stated mission of the FHFA responsible for this kind of fraud would be laughable, if not for the seriousness of this longtime Fannie and Freddie theft of taxpayer dollars. Their mission is *supposed* to be, to ensure that the fat-cat bonuses paid out to Senior execs at Fannie and Freddie are “reasonable.”   The taxpayers are on the hook for a total of $363 Billion dollars through 2013, and they give over $35 billion dollars to the people perpetuating this fraud under the guise of it being “reasonable?”  The FHFA Inspector general now says that Fannie and Freddie should install written criteria and procedures for performance evaluation in order to figure out what bonuses, if any, would be “reasonable” for these crony-capitalists. Oh Really? Why in the hell isn’t that type of system already in place ? So they just take $35 million tax dollars in bonuses, with no system in place to see if they actually earned it, and Congress is sitting on their hands letting this continue for decades.

Darrell Issa is the chairman of the House Government oversight committee, and where is he on this “oversight” of executive bonuses at Fannie and Freddie?  I am getting sick and tired of all these theatrical investigations in Congress that NEVER end up accomplishing a damn thing!  There is no stoppage of the theft of tax dollars over at Fannie and Freddie, even though we have seen what,  30, 40, or 50 so-called ” investigations ? ” If any action is ever taken, it is so ludicrous that it hurts me to even type it, such as giving someone a $50,000 fine for stealing 3 or 4 million in tax dollars.

U.S. taxpayers are on the hook for over $363 BILLION dollars through 2013, thanks to the corrupt fatcats over at Fannie and Freddie. Those same crony-capitalistic thieves were rewarded for their incompetence/ corruption with over $35 million dollars of your hard earned money. Think about that, as you write out that income tax payment check this month.