Free Republic

In 2008, the nation entered into a financial crisis widely believed to have been caused by excesses in the residential mortgage industry. By 2010, the nation thought it had put in place a series of measures that not only would resolve the crisis but would insure that it never happened again. Yet, here we are in 2015 looking at another potential mortgage crisis. Only this time it is different. In 2008, funds flowed in waves into the mortgage industry. In 2015, it appears the funds are drying up. The solutions to the problem in 2010 and thereafter included: Suing and...

"The biggest problem with Fannie Mae and Freddie Mac is that they are financial institutions with a social mission," said Tom Schatz, president of Citizens Against Government Waste. That social mission, critics say, is to heavily subsidize mortgages for people who don't meet sound lending qualifications. "Lower income homes have a tougher time paying mortgages and when the housing market started to go under, that was the first to go," Schatz said.

“Reckless Endangerment” a scalding new book ....... is another cautionary tale about government’s terrifying self-confidence.........."a story of what happens when Washington decides, in its infinite wisdom, that every living, breathing citizen should own a home.” The 1977 Community Reinvestment Act pressured banks to relax lending standards......... In 1994, Bill Clinton proposed increasing homeownership through a “partnership” between government and the private sector, principally orchestrated by Fannie Mae. Fannie Mae’s political machine dispensed campaign contributions, gave jobs to friends and relatives of legislators, hired armies of lobbyists (even paying lobbyists not to lobby against it), paid academics who wrote papers validating...

Subprime Scandal: Turns out the true cost of bailing out Fannie Mae and Freddie Mac is double what the White House claims. Yet reforming the failed mortgage giants remains in limbo. In a new report delivered to the House Budget Committee, the Congressional Budget Office puts the bailout figure at $317 billion — not the $130 billion claimed by the Obama administration, which has vowed to "reform" Fannie and Freddie. And CBO says costs to taxpayers will continue to rise as the housing market weakens. Why low-ball the bleeding from these quasi-governmental agencies? Because the White House doesn't really want...

This week the debt ceiling "crisis" officially arrived, as the U.S. government reached the $14.3 trillion legal limit on how much it is allowed to borrow. In coming weeks, Congress will vote on whether to raise this limit, but the debate is unfolding as credit rating agencies are starting to question whether the U.S. can maintain its AAA debt rating. Absent significant legislative changes by Congress, the U.S. budget deficit will likely remain at elevated levels for the foreseeable future, even if the economy roars back to life. Policymakers are pressing for budget reforms designed to cut spending over the...

Late last week the Obama Administration does what it often does when it's about to announce something controversial: It leaks a little bit to the news media to soften the blow. And so it was with the highly-anticipated, and currently overdue, "white paper" on reforming Fannie Mae and Freddie Mac. The paper is expected by the end of this week. As we have reported on this blog before, it will likely include several options and scenarios, playing each of them out to conclusion. We already know that the goal is to reduce the government's role in the mortgage market, which...

The 2008 financial crisis was an “avoidable” disaster caused by widespread failures in government regulation, corporate mismanagement and heedless risk-taking by Wall Street, according to the conclusions of a Congressional inquiry. The government commission that investigated the financial crisis casts a wide net of blame, faulting two administrations, the Federal Reserve and other regulators for permitting a calamitous concoction: shoddy mortgage lending, the excessive packaging and sale of loans to investors, and risky bets on securities backed by the loans. < snip > ..... Many of the findings have been widely described, but its synthesis of interviews, documents and testimony,...

INVESTIGATE THIS!by Ann CoulterJanuary 5, 2011The Republicans are back in charge in the House of Representatives this week, and not a moment too soon! Forget "stimulus" bills and "shovel-ready" bailouts (for public school teachers, who need shovels for what they're teaching), the current financial crisis, which is the second Great Depression, was created slowly and methodically by Democrat hacks running Fannie Mae and Freddie Mac over the past 18 years. As even Obama's treasury secretary admitted in congressional hearings, "Fannie and Freddie were a core part of what went wrong in our system." And if it's something Tim Geithner...

In the early 1990s, the biggest names in the mortgage industry hatched a plan for a new electronic clearinghouse that would transform the home loan business - and unlock billions of dollars of new investments and profits. At the time, mortgage documents were moved almost exclusively by hand and mail, a throwback to an era in which people kept stock certificates, too. That made it hard for banks to buy and sell packages of home loans to investors. By contrast, a central electronic clearinghouse would allow the companies to transfer thousands of mortgages instantaneously, greasing the wheels of a system...

Fannie, Freddie say mortgage servicers triggered foreclosure crisisBy Zachary A. Goldfarb Posted at 12:27 PM ET, 12/ 1/2010 Fannie Mae and Freddie Mac defended their role in the foreclosure crisis in prepared testimony to Congress on Wednesday, while at least one federal regulator said the mortgage giants had contributed to the problem. Speaking to the Senate Banking Committee at a hearing on the national foreclosure debacle, Fannie and Freddie executives emphasized that they are not responsible for managing payments by borrowers on home loans or foreclosing on homeowners when they default. These tasks, executives say, are the responsibility of mortgage...

White House Refuses to Release Donors to David Axelrod's CharityBy John Cook In 1998, White House senior adviser David Axelrod co-founded a charity aimed at curing epilepsy, which his daughter suffers from. It raised $800,000 last year from corporate and private donors. The White House won't say who they are. **SNIP** David Axelrod has no current official affiliation with CURE, but the organization's press materials describe him as a "CURE father and co-founder," and his White House bio says he "helped found" it. Susan Axelrod serves as CURE's chair, an unpaid position. Any viewer of Fox News piece, which is...

Government-controlled mortgage buyer Freddie Mac on Wednesday posted a narrower loss of $4.1 billon in the third quarter as it asked for an additional $100 million in federal aid — substantially less than the $1.8 billion it sought in the second quarter. The government rescued McLean, Virginia-based Freddie Mac and sibling company Fannie Mae nearly two years ago to cover their losses on soured mortgage loans, and it estimates the bailouts will cost taxpayers up to $259 billion.

The foreclosure mess was bad? But it gets so much worse once you start adding in a whole bunch of parallel messes in the world of mortgage bonds. For instance, as Tracy Alloway says, mortgage-bond documentation generally says that if more than a minuscule proportion of notes in a mortgage pool weren’t properly transferred, then the trustee for the bondholders can force the investment bank who put the deal together to repurchase the mortgages. And it’s looking very much as though none of the notes were properly transferred. But that’s not even the biggest potential problem facing the investment banks...

President Barack Obama boldly proclaims, "The buck stops here!" But, whenever his policies are criticized, he acts as if the buck stopped with George W. Bush. The party line that we are likely to be hearing from now until the November elections is that Obama "inherited" the big federal budget deficits and that he has to "clean up the mess" left in the economy by the Republicans. This may convince those who want to be convinced, but it will not stand up under scrutiny. No President of the United States can create either a budget deficit or a budget surplus....