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WASHINGTON -- The U.S. Treasury said it would provide capital as needed to Fannie Mae and Freddie Mac over the next three years, effectively opening its checkbook to the government-controlled companies in a bid to reassure investors in their debt. Treasury also will end its purchases of the companies' mortgage-backed securities and terminate a never-used short-term liquidity facility set up for the firms and the Federal Home Loan Banks. And it moved to allow the companies to shrink their giant portfolios of mortgage securities more slowly, though it said it was still "committed to the principle" of reducing the portfolios....

The two chief executives of Fannie Mae and Freddie Mac could get paid as much as $6 million each for 2009, despite the companies’ dismal performance this year which cost taxpayers more than $100 billion. Fannie’s CEO, Michael Williams, and Freddie CEO Charles “Ed” Haldeman Jr. each will receive $900,000 in salary, $3.1 million in deferred payments next year and another $2 million if they meet certain performance goals, according to filings with the Securities and Exchange Commission on Thursday. The pay packages were approved by the Treasury Department and the Federal Housing Finance Agency, which regulates Fannie and Freddie

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 Obama administration pledged Thursday to provide unlimited financial assistance to mortgage giants Fannie Mae and Freddie Mac, an eleventh-hour move that allows the government to exceed the current $400 billion cap on emergency aid without seeking permission from a bailout-weary Congress. The Christmas Eve announcement by the Treasury Department means that it can continue to run the companies, which were seized last year, as arms of the government for the rest of President Obama's current term. But even as the administration was making this open-ended financial commitment, Fannie Mae and Freddie Mac disclosed that they had received approval from...

Dear Attorney General Holder: We write to demand an immediate investigation into the activities of White House Chief of Staff Rahm Emanuel. We believe there is an abundant public record which establishes that the actions of the White House have blocked any investigation into his activities while on the board of Freddie Mac from 2000-2001, and facilitated the cover up of potential malfeasance until the 10-year statute of limitations has run out. The purpose of this letter is to connect the dots to establish both the conduct of Mr. Emanuel and those working with him to thwart inquiry, and to...

NEW YORK (CNNMoney.com) -- Top executives at mortgage finance giants Fannie Mae and Freddie Mac, both of which have been under government control since last year, received millions of dollars in pay in 2009, according to documents filed by the companies Thursday. The chief executive officers of each company got annual pay packages worth $6 million apiece, while other top execs pulled in at least $2 million. Fannie Mae (FNM, Fortune 500) CEO Michael Williams, who was promoted to CEO on April 21, will receive about $4.2 million in base salary and deferred cash payments for his time in the...

NEW YORK (AP) - The two chief executives of Fannie Mae and Freddie Mac could get paid as much as $6 million for 2009, despite the companies' dismal performances this year which cost taxpayers more than $100 billion. Fannie's CEO, Michael Williams, and Freddie CEO Charles "Ed" Haldeman Jr. each will receive $900,000 in salary, $3.1 million in deferred payments next year and another $2 million if they meet certain performance goals, according to filings with the Securities and Exchange Commission on Thursday. The pay packages were approved by the Treasury Department and the Federal Housing Finance Agency, which regulates...

Today, Grover Norquist and I are calling for an investigation into Rahm Emanuel’s activities at Freddie Mac, and the White House’s blocking of an Inspector General who would look into it. The letter follows: December 23, 2009 Attorney General of the United States of America U.S. Department of Justice 950 Pennsylvania Avenue, NW Washington, DC 20530-0001 Dear Attorney General Holder: We write to demand an immediate investigation into the activities of White House Chief of Staff Rahm Emanuel. We believe there is an abundant public record which establishes that the actions of the White House have blocked any investigation into...

Thomas SowellIBD Exclusive Series: Thomas Sowell on The Politics of the Housing Boom (Fifth and final installment of serieesCongressional support for Fannie Mae and Freddie Mac went far beyond words. When the Office of Federal Housing Enterprise Oversight — the agency overseeing these government-sponsored enterprises — turned up irregularities in Fannie Mae's accounting and in 2004 issued what Barron's magazine called "a blistering 211-page report," Republican Sen. Kit Bond called for an investigation of the Office of Federal Housing Enterprise Oversight, tried to have their budget slashed and sought to have the leadership of the regulatory agency removed. Democratic Congressman...

Even if the Federal Reserve gets around to strengthening the dollar--which would do wonders to get the economy really moving again--we still face a mammoth and growing problem: the government's increasing domination and distortion of the capital markets. It's not only the need to finance Uncle Sam's deficits that crowds out other credit seekers in the marketplace. It's also the proliferation of government entities (think Fannie Mae and Freddie Mac), government loan guarantees, tax credits and the government's growing sway over the banking sector. Even if Washington's red ink were back to the levels of a couple of years ago,...

It’s official: no one learned anything from Fannie/Freddie collapse posted at 11:36 am on December 10, 2009 by Ed Morrissey Here’s what should have been a familiar scenario. The federal government wants to pressure lenders into offering mortgages to marginally-qualified borrowers. They offer a method to make the loans risk-free by bundling them into mortgage-backed securities (MBS) with the imprimatur of the US Treasury as a guarantee. When the money began rolling into the lenders, the lenders started amplifying the process by issuing loans to anyone breathing on a fairly regular basis, falsifying documents in order to rake in the...

Over at the Wall Street Journal, there's a very interesting article that connects the dots between ACORN, the mortgage-lending-standard-destroying Community Reinvestment Act legislation, Fannie Mae and the eventual inflation and collapse of the housing bubble in last decade: As Allen Fishbein, currently an adviser for consumer policy at the Federal Reserve, has noted, Acorn and other community groups were informally deputized by then House Banking Chairman Henry Gonzalez to draft statutory language setting the law's affordable-housing mandates. Interim goals were set at 30% of the single-family mortgages purchased by Fannie and Freddie, and the Department of Housing and Urban Development...

"I do think I do not want the same kind of focus on safety and soundness that we have in OCC [Office of the Comptroller of the Currency] and OTS [Office of Thrift Supervision]. I want to roll the dice a little bit more in this situation towards subsidized housing." —Representative Barney Frank, September 25, 2003 It was six years ago that Mr. Frank announced his famous dice roll on Fannie Mae and Freddie Mac in the name of affordable housing. Mr. Frank got his wish, and the losses keep rolling in, with no end in sight as Washington finds...

Fannie Mae has announced that it is going to become a landlord. To avoid foreclosing, Fannie will allow some homeowners to rent. It’s another gamble with our money. Just 6 years ago, Barney Frank said this about Fannie Mae and Freddie Mac: We see entities that are fundamentally sound financially and withstand some of the disastrous scenarios. And even if there were a problem, the Federal Government doesn't bail them out. Oops, this year Congress bailed them out with 100 billion of your tax dollars. And congress has promised Fannie and Freddie ... another $300 billion in guarantees. Will the...

Freddie Mac (NYSE:FRE - News; NYSE:FRE - News), the second largest provider of U.S. residential mortgage funding, on Friday posted a loss of $5 billion in the third quarter and predicted it would need more government support amid a "prolonged deterioration" in housing. Increases in the value of securities Freddie Mac held over the period helped buoy its net worth, however, erasing its need to tap government funds for a second straight quarter to stay solvent while continuing to buy and guarantee home loans. Including a $1.3 billion dividend payment on senior preferred stock bought by the Treasury in previous...

Democrats' Ethics Targeted by GOP By BRODY MULLINS Republicans are seizing on newly revealed ethics probes of congressional Democrats ahead of next year's midterm elections, accusing House Speaker Nancy Pelosi and her colleagues of failing to make good on their pledge to clean up Washington when they regained control of Congress. None of the Democratic lawmakers under investigation by the House Ethics Committee is expected to lose in 2010. And ethics concerns are usually less important to voters than pocketbook issues. But Republican campaign strategists say ethics issues rumbling under the surface could help the GOP pick up a few...

Height of Chutzpah http://www.wiseandfrugalgovernment.blogspot.com/ On October 3rd, Business Week published an Associated Press article on the compensation package for the new Freddie Mac Chief Financial Officer, Ross Kari. Mr. Kari was presented with a package "worth as much as $5.5 million. That includes an almost $2 million cash signing bonus and a generous salary that could top $2.3 million" according to the AP (link below). The article goes on to explain that the generous pay package was established to be competitive with the other financial sector jobs presumably available to Mr. Kari. You remember, Freddie Mac surely. The government-controlled mortgage...

Yes, he’s doing the job of dictating to companies which took government (read: taxpayers’) money exactly how much they are allowed to compensate their top execs. And next he’s going to look at the paychecks of the smaller fellows, too. Before he does that, however, perhaps he should take a look at the compensation package received by the new CFO of Freddie Mac, Ross Kari.

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...

Politics: Democrats say Rush Limbaugh is running the Republican Party. Better Rush than George Soros, who is running the Democrats. At least Rush believes in freedom, capitalism and letting you keep what you earn. The cover of the March 7 issue of Newsweek shows a picture of conservative icon Limbaugh with a piece of tape covering his mouth and the word "Enough!" So much for disagreeing with what you say but defending to the death your right to say it. Voltaire could never be a contributor to Newsweek

From 2002 to 2007, Fannie Mae and Freddie Mac loaded up on $1.73 trillion of subprime and $1.44 trillion of Alt-A loans and securities, taking a lion's share of these markets, according to mortgage market guru Ed Pinto. The agencies' share of loans and securities, then, was higher than the total for all private label mortgage-backed securities market held outside the agencies' purchases -- contrary to widely held views in the mortgage markets. The two agencies hid the level of risky lending and investment in securities by failing to classify the loans initially as subprime or Alt-A.

In the Medieval era -- when the periodic table of the elements was comprised of only Fire, Earth, Air, and Water -- alchemists posited the existence of a fifth magical substance, Quintessence, which when mixed in combinations of the other four would create every other form of matter. They searched in vain for this ethereal substance in their pursuit of a means of changing base metals into gold. Their quest went unrealized, but this magical quintessence was subsequently discovered five centuries later by the new alchemists: mortgage bankers and investors. They found a way to turn worthless mortgages into hordes...

Here is video of Karl Rove absolutely schooling Juan Williams (sitting in for Bill O'Reilly) when Williams made the mistake tonight of accusing President Bush and his administration of "doing nothing" to reign in Fannie Mae and Freddie Mac to avoid a Housing Meltdown. That's all it took. Rove proceeded to lay out the facts that the Bush Administration tried to get legislation to regulate the mortgage lenders, but were blocked by Democrats, including then Senator Barack Obama.

In an alleged effort to protect against a recurrence of the financial collapse of 2008, Congress is considering a slew of new mandates, regulations and agencies. At the top of the list is an expansion of the very government mandate that is at the heart of the financial collapse, the Community Reinvestment Act. It appears that rather than learning from mistakes of the past, Congress is taking steps that could exacerbate the problems in the future. The CRA has been credited by many experts as a key contributor to the financial meltdown of 2008. Originally introduced in 1977, it was...

DALLAS - When Congress passed an $8,000 tax credit for first-time home buyers last winter, it was intended as a dose of shock therapy during a crisis. Now the question is becoming whether the housing market can function without it. As many as 40 percent of all home buyers this year will qualify for the credit. It is on track to cost the government $15 billion, more than twice the amount that was projected when Congress passed the stimulus bill in February. In the view of the real estate industry and some economists, all that money is well spent. They...

Stimulus: The group that pushed banks into the risky loans that brought the economy down is now eligible for a huge chunk of stimulus cash. The stimulus plan does create jobs — for community activists.As in any agreement, contract or piece of legislation, the devil is in the details. So it is with the stimulus package percolating in Congress. Analysts are beginning to figure out that only a small percentage of the money will actually trickle down into the economy in the first two years, not enough to do much stimulating. Yet in this package is a $4 billion pot...

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,...

In the late 1970s, as the federal government arranged to bail out Chrysler, not-yet-famous economist Alan Greenspan warned the problem “was not that it would fail, but that it would succeed.” And it did, thus paving the way for more bailouts, including (again) Chrysler. But the first Chrysler bailout was just one company, one time. The rolling series of financial bailouts over the past year -- Fannie Mae and Freddie Mac, AIG and Citibank, General Motors and Chrysler, etc. -- have not yet succeeded or failed. But they’ve raised a new moral hazard. These days, having invested so much in...

Politics: Democrats say Rush Limbaugh is running the Republican Party. Better Rush than George Soros, who is running the Democrats. At least Rush believes in freedom, capitalism and letting you keep what you earn.The cover of the March 7 issue of Newsweek shows a picture of conservative icon Limbaugh with a piece of tape covering his mouth and the word "Enough!" So much for disagreeing with what you say but defending to the death your right to say it. Voltaire could never be a contributor to Newsweek. But David Frum is, and his inside cover story, "Why Rush Is Wrong,"...

In a series of articles published from 1902-1904, Ida Tarbell attacked Standard Oil, the leading US supplier of kerosene lamp fuel. The centerpiece of Ms. Tarbell's criticism was that the company had engaged in predatory pricing by continually lowering its prices. Her readers must have asked themselves, "How is that a bad thing? Am I supposed to be outraged that the amount I pay for lamp oil has fallen?" Although company cofounder John Rockefeller had retired from actively managing Standard Oil in 1896, Ms. Tarbell vilified him in her articles, even criticizing his elderly appearance. Populist US president Theodore Roosevelt...

Corruption: Chris Dodd's teetering re-election chances weren't helped by news that the senator may have lied about not knowing he got preferential treatment as one of Countrywide Financial's Friends of Angelo program.Can you foreclose on a house of cards? Dodd, D-Conn., may soon find out after the official who handled his mortgages testified before both the House Government Reform and Oversight Committee and the Senate Ethics Committee that Dodd did in fact know he got sweetheart deals from a company that went on to lose billions of dollars on home loans to credit-strapped borrowers. As the No. 1 recipient of...

The first big government bailout of the financial crisis -- the takeover of mortgage finance giants Fannie Mae and Freddie Mac -- is poised to be the most expensive and complicated to complete. Since Congress essentially wrote a blank check to the Treasury Department in July 2008 to do what needed to be done to inject capital into the two firms, Fannie (FNM, Fortune 500) has received $34.2 billion of direct government support while Freddie (FRE, Fortune 500) has received $51.7 billion. While that's lower than the $117.5 billion poured into insurer AIG (AIG, Fortune 500) by the Federal Reserve...

Freddie Mac announced Wednesday that it would offer loan-to-value ratios on home mortgage refinancings of up to 125 percent for qualified borrowers. Fannie Mae also announced a similar change. The moves come as the Obama administration raised the maximum loan-to-value (LTV) ratio from 105 percent. As a result of this change, qualified borrowers will be able to obtain McLean-based Freddie Mac’s (NYSE:FRE) Relief Refinance Mortgages with loan amounts up to 125 percent of the current value of their property. The higher LTV ratio is expected to give homeowners – especially those in markets that have experienced sharp declines in home...

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...

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.

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...

The Republicans have again chosen their favorite boogey men for blame in the mortgage crisis, Fannie Mae, Freddie Mac and the Community Reinvestment Act. The Republicans House Committee on Oversight and Government Reform lead by Congressman Darrell Issa has released this white paper today on all three entity's roles in the mortgage crisis. In my opinion, the Republicans have once again inflated the role of all three in the crisis.

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...

Today the US Treasury Department announced an update to allow refinancing of mortgages backed by Fannie Mae and Freddie Mac up to a first lein position of 125% of the home’s appraisal value. This is a level that was previously set at 105% loan to value.

After drawing the funds, Freddie Mac has now received $51.7 billion from the Treasury Department and still has access to an additional $149.3 billion to help it finance operations.

The blunt truth is that even if we had had President Obama's financial regulatory "reforms" in place four years ago--reforms designed to prevent another financial meltdown--we would still have experienced a horrific economic disaster. In other words, the Administration's prescriptions deal with the symptoms--and those badly--not the underlying causes. The astonishing housing bubble could not have happened without the Federal Reserve's easy-money policy, which got under way in late 2003. If not for the excess liquidity created, there would not have been sufficient fuel to distort the housing market and ultimately the financial system. Yet President Obama has remained mum...

How many uninsured Americans are there really? It’s a number that the mainstream media have repeatedly misrepresented to make the health care “crisis” seem worse than it is.

Earlier this year, their cramped mobile home growing smaller every day, Milford couple Lora Painter and Nick Dumont set about searching for larger, more suitable quarters for them and their three sprouting children. Times being what they are, though, scoring such a property for what they could afford was about as likely as all the nation's teens giving up their cell phones. But then, as April showers began bringing May flowers, what Painter calls "our miracle" happened. It came in the form of a tidy, hillside ranch with three good-sized bedrooms and a potential fourth, a couple of airy walk-in...

President Obama and James Lockhart have decided to (financially) rape Americans. Yes, really: June 19 (Bloomberg) -- President Barack Obama’s program to help more homeowners refinance may be expanded to include borrowers who owe more than 105 percent of their homes’ values, Federal Housing Finance Agency Director James Lockhart said. The Obama administration is considering allowing Fannie Mae and Freddie Mac to refinance loans with current loan-to-value ratios of 125 percent or higher, Lockhart said at a National Association of Real Estate Editors Association conference in Washington yesterday. Let me be absolutely clear so nobody can ever accuse me of...

George W. Bush: After being pummeled by his successor, the 43rd president ends his silence on America's slide into socialism and timidity. He reminds us leadership is not something that comes off a teleprompter. Perhaps tired about being publicly blamed by the current administration for all our current ills, Bush spoke out in Erie, Pa., on Wednesday at the 104th annual gathering of the Manufacturers and Business Association. On the same day President Obama announced expanded policing authorities for the Fed to deal with a "culture of irresponsibility," another move many feel will stifle the risk takers and entrepreneurs needed...

Former Freddie Mac national director of Expanding Markets, Vaughn Irons, is now CEO of APD Solutions, a firm established to provide capital support for socially responsible investing. The capital will be made available from Waterfall Asset Management’s billion dollar portfolio, according to a release on the matter. While APD is a business, it is rooted in activities more closely associated with charities; it’s aims are to “revitalize communities” hardest hit by the economic recession in an effort to “jump start” housing activity. Waterfall is a high-yield asset-backed securities and non-performing residential mortgage loan investment adviser with $1.1bn under management. “The...

The American people are pretty well convinced that the mortgage meltdown was the fault of greedy bankers, stupid borrowers, and the odd Friend of Angelo Mozilo like Sen. Christopher Dodd (D-CT). That's hardly surprising, since the mainstream media has shown a vivid disinterest in getting to the bottom of it all. That's why we have Thomas Sowell. His latest book, The Housing Boom and Bust, is a workmanlike analysis of the housing crisis. It's short enough, at about 50,000 words, for anyone to get through on a weekend. Needless to say, Dr. Sowell does not find that the meltdown was...

NEW YORK (Reuters) – U.S. lawmakers on Wednesday will open a debate that has stymied them for at least a decade: the future of Fannie Mae and Freddie Mac, the giant housing finance agencies nearly felled by the credit crisis. Congress is facing the daunting task of remaking the companies after steep mortgage losses led the Treasury in September to seize control of the two financing agencies. The stakes are high, with President Barack Obama counting on the reach of Fannie Mae and Freddie Mac to carry out his plans to improve housing affordability for nine million Americans. Decisions made...