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U.S. Representative Judy Biggert introduced new legislation Thursday designed to ramp up congressional oversight of the government-controlled mortgage giants Fannie Mae and Freddie Mac and disclose the intricacies of the two companies’ businesses to taxpayers In the midst of the industry’s housing crisis and the nation’s financial meltdown, taxpayers were forced to take on the costs and risks associated with the GSEs, including an estimated outlay of $291 billion last year alone, according to the Congressional Budget Office. Biggert, the ranking GOP member of the House Financial Services Subcommittee on Oversight and Investigations, said she introduced the bill to improve...

MCLEAN, Va.—When Charles E. Haldeman Jr. became Freddie Mac's chief executive officer in August, the ailing housing-finance giant had already consumed $51 billion of government money to stay afloat. It's likely to need even more. Freddie's federal overseers nevertheless have instructed Mr. Haldeman to focus on something that isn't likely to make the bleak balance sheet look any better: carrying out the Obama administration plan to allow defaulted borrowers to hang onto their homes.

The record budget deficits announced by the White House on Monday fail to include the federal government’s share of Fannie Mae and Freddie Mac’s $6.3 trillion in liabilities — though the Director of the Office of Management and Budget once thought it should. Following a 2008 bailout that made the government a majority stakeholder in the mortgage companies, then-Congressional Budget Office Director Peter Orszag said, “Now that the authority is indeed being exercised, it is CBO’s view that the operations of Fannie Mae and Freddie Mac should be directly incorporated into the federal budget.” “Doing so reflects a very tight...

A few days ago we made some observations on the just-announced nearly $4 trillion 2011 budget. The key point was that while the ugly numbers already looked like a superglued Frankenstein monster without a Kardasian botox treatment, or even simple lipstick, it would have been truly disastrous had the administration done what Peter Orzsag threatened he would do 2 years ago, namely bring the GSEs, Freddie and Fannie, on the government's balance sheet. How this is not the case yet is simply stunning: the GSEs enjoy not only the constant "bid of first refusal" courtesy of the Fed's MBS QE...

The Great Bailout is mostly over for the banks. But for those troubled behemoths of the nation’s housing bust, Fannie Mae and Freddie Mac, the lifeline from Washington just keeps getting longer. Fifteen months after Fannie and Freddie were effectively nationalized, neither the Obama administration nor Congressional leaders see a quick solution to one of the thorniest problems in American finance: how to fix the twin mortgage giants without choking the flow of credit to homeowners and dealing a blow to a still-fragile housing market. The administration had said for months that it would begin charting a new course for...

...consists of a "short" 192-page summary section and a 1420 page appendix. We are confident that not one politician will read the whole thing from cover to cover. We won't either. Not because we don't care about what's in it, but because we are much more concerned with what is not included, namely $2.8 Trillion and $1.9 Trillion of MBS guaranteed portfolios at Fannie and Freddie, and an additional $782 billion and $809 billion in company debt outstanding for the two GSEs, respectively. This amounts to a total of $6.3 trillion in liabilities which should be counted toward the budget.

Another Government 'Sneaky Pete' Move; So Much For Openness At Fannie And Freddie by: Bruce Krasting January 16, 2010 Fannie (FNM) issued an 8k yesterday confirming what Mike DeMarco at FHFA said Thursday regarding the Agencies' involvement with a new program to finance home construction. Basically Fannie and Freddie (FRE) are going to be the new bankers for HFA (Housing Finance Agency ). Treasury is buying the debt for this, so the taxpayers are at risk. It is not that big a deal, yet. It starts out with a modest $28b. This is a stimulus. Plain and simple. If you...

Fannie and Freddie are exempt from the White House banker 'fee.' The White House has spent months imploring banks to lend more money, so will President Obama's new proposal to extract $117 billion from bank capital encourage new bank lending? Just asking. Welcome to one more installment in Washington's year-long crusade to revive private business by assailing and soaking it. Mr. Obama's new "Financial Crisis Responsibility Fee"—please don't call it a tax—is being sold as a way to cover expected losses in the Troubled Asset Relief Program. That sounds reasonable, except that the banks designated to pay the fee aren't...

Seventy Republican members of Congress want Treasury Secretary Timothy Geithner to cancel up to $6 million in bonuses and deferred compensation -- approved before Christmas 2009 -- for the chief executive officers of the failed mortgage giants Fannie Mae and Freddie Mac. “(T)here’s a letter that’s going to Sec. Geithner from a number of us calling for a rescission of those bonuses,” Rep. Michele Bachmann (R-Minn.) told CNSNews.com Wednesday. On Christmas Eve, at the same time the Obama administration announced that it was removing any cap on the amount of taxpayer aid to Fannie Mae and Freddie Mac, the failed...

Laurie Goodman of Amherst Securities and formerly of UBS, has come out with a damning report, which estimates that the total losses at Fannie and Freddie could be as high as a mindblowing $448 billion. Keep in mind that so far the government has injected $112 billion into the nationalized entities. Yet if this estimate is correct, another $336 billion will have to be funneled from taxpayers. This money will have to come from new debt issuance and is certain to add to the multi trillion budget deficit. Also, putting the banker tax in perspective, the number is nearly three...

I found this article on Bloomberg: http://bloomberg.com/apps/news?pid=20603037&sid=a_Ym1WM6UboU Part of it mentiones Mark Zandi, owner of Economy.com, who is the Pelosi's and Zero's informal economic advisor proposes a program whereby if a bank cuts the principal balance of an underwater loan the government will cover half the costs of that cramdown. The perfect vehicle to shovel taxpayer money for this bailout would be through Fannie and Freddie. Zandi's proposal would be in the hundreds of billions of dollars perhaps trillions.

Barney Frank says that Fannie/Freddie have morphed exclusively into a public policy instrument following the housing collapse. Starting at 4:12 in video: “Remember now that Fannie and Freddie have been converted, they were problematic before, and we didn’t get around ’til 2007 of passing that reform… Part of the losses of Fannie and Freddie is that since the housing collapse, Fannie Mae and Freddie Mac have become a kind of public utility. They are not what they used to be, that hybrid, inappropriately hybrid, private stock company/public policy instrument. They have become the public utility that finances housing…” WATCH: http://butasforme.com/2010/01/05/video-barney-frank-fannie-freddie-are-basically-public-policy-instruments-of-the-government/

Happy New Year, readers, but before we get on with the debates of 2010, there's still some ugly 2009 business to report: To wit, the Treasury's Christmas Eve taxpayer massacre lifting the $400 billion cap on potential losses for Fannie Mae and Freddie Mac as well as the limits on what the failed companies can borrow. The Treasury is hoping no one notices, and no wonder. Taxpayers are continuing to buy senior preferred stock in the two firms to cover their growing losses—a combined $111 billion so far. When Treasury first bailed them out in September 2008, Congress put a...

“The best way to destroy the capitalist system is to debauch the currency.” Vladimir Lenin, leader of the 1917 Russian Revolution Last week, while Congress and the nation were preoccupied with the holidays, the Treasury made a Christmas eve announcement that it would be providing Fannie Mae and Freddie Mac unlimited financial support for the next three years. The Treasury's press release notes: “At the time the Federal Housing Finance Agency (FHFA) placed Fannie Mae and Freddie Mac into conservatorship in September 2008, Treasury established Preferred Stock Purchase Agreements (PSPAs) to ensure that each firm maintained a positive net worth....

Behind the Christmas Eve taxpayer massacre at Fannie and Freddie. Happy New Year, readers, but before we get on with the debates of 2010, there's still some ugly 2009 business to report: To wit, the Treasury's Christmas Eve taxpayer massacre lifting the $400 billion cap on potential losses for Fannie Mae and Freddie Mac as well as the limits on what the failed companies can borrow. The Treasury is hoping no one notices, and no wonder. Taxpayers are continuing to buy senior preferred stock in the two firms to cover their growing losses—a combined $111 billion so far. When Treasury...

Some days ago we wondered aloud at the blank check extended to Fannie and Freddie along with the suspiciously convenient timing of those announcements on Christmas Day. Back then we wondered if we had been told the entire story. To wit: So. Let us summarize: We do not expect the GSEs to grow their portfolios at all, so we are fixing the bloated portfolio problem by easing the portfolio caps to permit a quarter trillion dollar expansion thereof. We do not expect either of the GSEs to need more help from the Treasury, so we are responding to the underutilized...

I'm not sure if we can post Business Week article excerpts any more now that they are owned by Bloomberg. The headline pretty much summarizes the contents of the article. Wallison is the former general counsel of the U.S. Treasury. You can read the entire story here: http://www.businessweek.com/news/2009-12-31/u-s-to-lose-400-billion-on-fannie-freddie-wallison-says.html

The government's move to ease the limits on the securities holdings of Fannie Mae and Freddie Mac has ignited a debate among analysts about what the companies will do with their longer leash. When the Treasury Department took over Fannie and Freddie last year, one of the requirements they set for the companies required them to begin shrinking their portfolios of mortgages and related investments, which total a combined $1.5 trillion. The idea was to rein in the companies' size and growth. But last Thursday, the Treasury eased that requirement, meaning the companies won't be forced to sell mortgages next...

Barney Frank's decision to 'roll the dice' on subsidized housing is becoming an epic disaster for taxpayers. On Christmas Eve, when most Americans' minds were on other things, the Treasury Department announced that it was removing the $400 billion cap from what the administration believes will be necessary to keep Fannie Mae and Freddie Mac solvent. This action confirms that the decade-long congressional failure to more closely regulate these two government-sponsored enterprises (GSEs) will rank for U.S. taxpayers as one of the worst policy disasters in our history. Fannie and Freddie's congressional sponsors—some of whom are now leading the administration's...

A Treasury announcement Christmas Eve raises a lot of questions about the future of Fannie Mae and Freddie Mac. •Is the Administration planning a future where the two companies become permanent government agencies? •Is the Administration laying the groundwork to expand the capacity of the two agencies to retain more mortgages and buy more mortgage-backed securities? •Is the administration planning to ramp up loan modifications involving principal reductions, which would mean more near-term lossess for Fan and Fred? Those are some of the questions posed by mortgage industry consultant Ed Pinto.

The Obama administration's decision to cover an unlimited amount of losses at the mortgage-finance giants Fannie Mae and Freddie Mac over the next three years stirred controversy over the holiday. The Treasury announced Thursday it was removing the caps that limited the amount of available capital to the companies to $200 billion each. Unlimited access to bailout funds through 2012 was "necessary for preserving the continued strength and stability of the mortgage market," the Treasury said. Fannie and Freddie purchase or guarantee most U.S. home mortgages and have run up huge losses stemming from the worst wave of defaults since...

The Treasury snuck in another big bailout on Christmas Eve: It removed the cap on the amount of money it will provide to Fannie Mae and Freddie Mac to cover their ongoing mortgage losses. There is now no limit on how much we taxpayers will shovel down these black holes. The move is designed to reassure Fannie and Freddie bondholders, who provide a lot of the money the companies use to support the housing market. These bondholders have now apparently been given an explicit government guarantee, in perpetuity. The move is also obviously designed to continue to prop up house...

The government has handed its ATM card to beleaguered mortgage giants Fannie Mae and Freddie Mac. The Treasury Department said Thursday it removed the $400 billion financial cap on the money it will provide to keep the companies afloat. Already, taxpayers have shelled out $111 billion to the pair, and a senior Treasury official said losses are not expected to exceed the government's estimate this summer of $170 billion over 10 years. Treasury Department officials said it will now use a flexible formula to ensure the two agencies can stand behind the billions of dollars in mortgage-backed securities they sell...

The top regulator for Fannie Mae and Freddie Mac is expected to announce millions of dollars in pay packages for top executives at the government-run mortgage-finance titans, people familiar with the matter said. The Federal Housing Finance Agency approved compensation plans for Fannie Chief Executive Michael Williams and Freddie CEO Charles Haldeman Jr. Those packages are expected to be in a range of $4 million to $6 million, people familiar with the matter said. The companies are expected to spell out pay details for their top executives in securities filings Thursday morning. The Christmas Eve announcement is likely to provoke...

US Senators John McCain (R-Ariz.) and Maria Cantwell (D-Wash.) proposed reinstating the Depression-era Glass-Steagall Act that split commercial and investment banking to rein in Wall Street firms in response to the financial crisis. McCain and Cantwell join other lawmakers in Congress proposing to reinstate the 1933 law, repealed a decade ago by the Gramm-Leach-Bliley Act that led to a rise in conglomerates including Citigroup, JPMorgan Chase and Bank of America active in retail banking, insurance and proprietary trading. Legislation to reinstate the ban was introduced yesterday in the House. Under the Senate legislation, financial firms operating commercial banks and investment...

And the total risk they pose to the taxpayer far exceeds that of the big banks. Fannie and Freddie, in the final days of the year, are even said to be negotiating with the Treasury about greatly expanding the money available to them. Though the four are not in all the same businesses, they were caught in one of the same traps: They sold mortgage guarantees — in some cases to each other. Now when homeowners default, as they are doing in record numbers, these companies are covering the losses. Essentially, taxpayer money to these companies is being used partly...

The U.S. Treasury faces a decision by year end on whether to increase its bailout of Fannie Mae and Freddie Mac beyond the $400 billion it has already committed. So far, the companies have taken $112 billion in capital infusions from the government, and most analysts believe they are unlikely to use up the full $400 billion. But some analysts say the Treasury and regulators should take precautions, in case losses run higher than expected. After Dec. 31, the U.S. government would have to seek congressional approval for any increase. Until then, it can increase its commitment unilaterally. The politics...

In July 2008 Nobel laureate Paul Krugman wrote that Fannie Mae and Freddie Mac (the GSEs) "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." (New York Times, July 18, 2008) Earlier this month he compounded his error when he stated: "Zombies, zombies, everywhere. One of the enduring myths of the financial crisis has been the claim that it was the result of...

WTF is this? Thousands of borrowers on the verge of foreclosure will soon have the option of renting their homes from Fannie Mae, under a policy announced Thursday. The government-controlled company, through its new "Deed for Lease" program, will allow borrowers to transfer ownership to Fannie Mae and sign a one-year lease, with month-to-month extensions after that. This has exactly nothing to do with helping "homeowners." It is entirely about Fannie not having to recognize the written-down value of these houses - that is, allowing them to hold the "mark" on the loan at it's original value, rather than recognize...

Make My GSE a McGE Sarah Carlsruh, October 22, 2009 The burden of bailing out mortgage giants Freddie Mac and Fannie Mae will fall to taxpayers, predicted Brooklyn Law School Professor David Reiss, at a cost which the Cato Institute suggested could top $200 billion. The Cato Institute hosted a lecture on October 19th called, “Which Way Forward for Fannie Mae and Freddie Mac?,” where economics and real estate savvy speakers discussed secondary mortgage markets and the government sponsored enterprises (GSE’s) Fannie Mae and Freddie Mac. Subprime loans were, until recently, considered by the Mortgage Bankers Association (MBA) to be...

A new analysis of loss-ridden mortgage giants Fannie Mae and Freddie Mac tries to nail shut the coffin on their common stocks. In a report, financial services research specialist Keefe Bruyette & Woods says the companies’ shares would have zero value under the workout scenario the firm believes is most likely: the creation of new Fannie and Freddie entities as mortgage guarantors owned by the banks that use their services, while the government continues to support the old Fannie and Freddie loan portfolios as they wind down. Keefe may not be telling speculators in Fannie and Freddie shares anything they...

Housing Mess: A huge, government-run housing agency shows massive losses and needs a bailout. Fannie Mae? Freddie Mac? No. It's the Federal Housing Administration, in a bad case of financial-meltdown deja vu. The FHA, which insures mortgages made by first-time buyers with low down payments, says it may need a bailout because it will have losses of — get this — $54 billion. And how did it lose all that? By backing home loans made to people who couldn't pay them off. Where have we heard this before? At a time when we talk routinely of trillion dollar deficits, $54...

RUSH: Let me go back to the Washington Post, because on Monday the 7th, the Washington Post published an article that very few people talked about and was little noticed, about changes in the mortgage market since Freddie Mac and Fannie Mae were taken over a year ago. According to the Washington Post -- this is a quote -- "Only one lender of consequence remains [in the mortgage market]: the federal government..." The mortgage industry has been nationalized. "[N]early 90 percent of all new home loans are funded or guaranteed by [YOU!] taxpayers... The government has the power to decide...

Exactly what did Barack Obama "inherit?" Our president is fond of laying blame at the feet of his predecessor. Do the facts, however, support the rhetoric? They might but for the inconvenient truth that his party has enjoyed majorities in both chambers of Congress since the 2006 elections. Can any individual or party feign "inheritance" when they have controlled the legislative agenda for over two years? I think not. While much has rightly been made of the contributions to the current recession from "The Fed," the SEC, risk assessors, banks, insurers, and private mortgage lenders, little scrutiny has been applied...

It's careful, it's complicated, it's got a catchy name, and it's first. At face value, that's what I see in the Mortgage Bankers Association's proposal to formulate a new, government-guaranteed, mortgage backed securities market to take the place of Fannie Mae and Freddie Mac.Let's start at the very beginning, with the MBA press release: The centerpiece of MBA’s recommendation is the creation of a new line of mortgage-backed securities (MBS). Each security would have two components – a loan level guarantee provided by privately-owned, government-chartered and regulated mortgage credit-guarantor entity (MCGE) and a security-level, federal government-guaranteed wrap.America, meet the MCGE,...

I thought I had seen it all when it comes to dumb. I was wrong. video at site This is idiotic. Let's count the ways: A "strong regulator" eh? You mean like the FHFA? Fannie and Freddie had a so-called "strong regulator" that nonetheless allowed them to lever up at 80:1 (or 200:1 depending on how you looked at their books) which was clearly outrageous on its face and led to their demise. That same "strong regulatory framework" had Fannie and Freddie buying other-than-actual-prime paper. It detonated. Any questions? Fannie and Freddie turned into revolving-door agencies with the government, winding...

A mortgage-industry trade group is calling for Congress to transform Fannie Mae and Freddie Mac into several smaller privately held companies that would issue mortgage securities carrying an explicit government guarantee. Some foreign investors in China and elsewhere lost confidence in that fuzzy implied guarantee last year and reduced their holdings of the companies' debt, though the U.S. government has propped up Fannie and Freddie with capital infusions. "If we're going to restore and maintain investor confidence and...consistent liquidity, that is going to require an explicit backstop," said John Courson, chief executive and president of the MBA. Shares of both...

Equities broke their winning streak on Friday and now they may be looking to start a new streak. All three major indices are down between one half and three quarters of a percent. That's not that bad. One major index in China was off by 6% this morning on price to earnings "fears". Stocks retreated from Shanghai to Frankfurt on speculation the six-month rally has outpaced prospects for earnings growth.

Fannie Mae reported another terrible quarter today. Fannie Mae, the largest provider of U.S. home mortgage funding, on Thursday reported a $14.8 billion quarterly net loss that it said would force it to go to the U.S. Treasury trough a third time for money to stay in business. The company noted a "significant uncertainty" of its long-term financial health in reporting its eighth consecutive quarterly loss, which illustrates its struggle to make money in the face of rising defaults and pressure to do more to stabilize the housing market.

Republicans on Thursday lashed out in opposition to legislation that would require more than $6.5 billion of funds from the federal government's bank-bailout package to be used to help troubled homeowners and neighborhoods on Main Street. House Financial Services Committee chief Barney Frank, D-Mass. "We need to restore fiscal discipline," said Rep. Spencer Bachus, R-Ala., the ranking member of the House Financial Services Committee, during a hearing of the panel. "Treasury needs flexibility and this won't give it to the agency." The legislation, introduced by Rep. Barney Frank, D-Mass., would require that some remaining funds from the Troubled Asset Relief...

Fannie Mae and Freddie Mac were the chief culprits in the housing crisis because they encouraged people who could not afford payments to borrow money, according to a congressional report released Tuesday. The claims in the report have long been advanced by conservatives, who argue that the Community Reinvestment Act and other federal programs fed the housing bubble that burst in 2007 and led to the economic downfall in 2008. But the report explains in detail how Fannie and Freddie -- government sponsored enterprises (GSE) that were not subject to the same oversight as other publicly traded firms -- “privatized...

Freddie Mac Gets Another $6.1B from Gov't BY STEPHEN BERNARD | AP Business Writer You have entered an invalid email address From (email):* Required NEW YORK (AP) - Battered mortgage giant Freddie Mac received $6.1 billion in new funds from the Treasury Department to help offset its mounting liabilities, according to a regulatory filing submitted Wednesday. The company could also be close to naming a new, permanent CEO, according to a report in The Wall Street Journal. The Federal Housing Finance Agency, which has been operating Freddie Mac since last fall, requested the funds for Freddie Mac after the mortgage...

Homeowners taking part in the Obama administration's housing rescue program through Fannie Mae and Freddie Mac will now be eligible even if their loan-to-value ratio is up to 125 percent. That means they can have up to 25 percent negative equity and still get a refinance.The rule changes, part of the government's attempts to restore housing affordability and stem the foreclosure crisis, apply to loans backed up by Fannie Mae and Freddie Mac.Previously, homeowners could borrow up to 105 percent of their home's value. The new loan-to-value ratio is set up at 125 percent in a further effort to address...

Our favorite Congressman from MA is back in the news again. No, there's not a male escort service operating out of his townhouse this time. That's so 1989. This time, Barney is pushing for, you guessed it, relaxed mortgage standards. Since that worked out so well for our country the first time, Barney wants an encore: Rep. Barney Frank says that unless Fannie Mae and Freddie Mac relax their recent tightening of mortgage standards on new condominiums, the economic recovery could be threatened. That would be the same Barney Frank who famously boasted that the two federal agencies -- which...

Banking Queen Barney Frank, having not learned anything from the mortgage crisis he helped create, asked both Fannie Mae and Freddie Mac to relax condo lending rules.

Freddie Mac(FRE Quote) is temporarily bringing back its former chief executive as it deals with the apparent suicide of its acting chief financial officer. More on FRECramer's Take on Headline StocksPhoto Gallery: Freddie Mac CFO Found DeadFreddie Mac CFO Found DeadUS Foreclosures Up 24 Pct In 1QFannie Mae CEO Allison to Head TARP: ReportCramer: Bargain Basement AssetsGeithner: We May Oust Bank CEOsFannie and Freddie Planned Bonuses: ReportCramer: Bargain Basement AssetsFannie, Freddie May Aid Mortgage Banks Market Activity David Moffett, the former government-appointed CEO who resigned in March, will return as a consultant to interim CEO John Koskinen. He will help...

PLEASE! Do your Part to STOP "SSS" (Sudden Suicide Syndrome)

Law enforcement sources said they found David Kellermann, acting chief financial officer of mortgage company Freddie Mac, hanging in the basement of his Reston, Va., home, dead from an apparent suicide early this morning. Virginia police say they found David Kellermann, acting chief financial officer of mortgage company Freddie Mac, hanging in the basement of his Reston home, dead from an apparent suicide early this morning. (ABC News)The death was "an active investigation" and there were "no signs of foul play," Fairfax County police officer Sabrina Ruck said. Local police said they were called to Kellermann's home at 4:48am. Kellermann,...

(I DON'T CARE IF THIS HAS BEEN POSTED 300 TIMES BEFORE, IT IS NECESSARY THAT WE ALL UNDERSTAND WHO IS RESPONSIBLE FOR THE CURRENT MESS. AND, YES, I MEAN TO SHOUT. I'M MAD AS HELL!! IF YOU'RE NOT ALSO MAD AS HELL, YOU DON'T UNDERSTAND WHERE THIS IS TAKING US AND WHO ORCHESTRATED IT. BEFORE IT IS PULLED FROM THE CANADIAN SITE, WATCH THIS 4 MINUTE VIDEO TO UNDERSTAND WHY I'M SICK AND TIRED OF OBAMBI MUTTERING THAT HE "INHERITED" THIS MESS. THE MESS HAS ITS ROOTS WITH THE DEMOCRATS GOING ALL THE WAY BACK TO CARTER!! FRANK, DODD, SCHUMER,...

David Kellerman found dead.