Free Republic

Newsy had a nice summary of the principal reduction debate. It focuses on California Attorney General Kamala Harris requesting that mortgage giants Fannie Mae and Freddie Mac cease foreclosures (at least in California) and perform principal reductions. FHFA Acting Director Edward DeMarco is resistant to the idea saying the principal reductions would cost taxpayers $100 billion. “Only” $100 billion? A recent Fed study covered in HousingWire found that negative equity in the U.S. is approaching $4 trillion. $100 billion is a big number, but pales in comparison to the cost of wiping out all negative equity. So, the tab to...

A Georgia Republican is set to introduce on Thursday a bill that would replace Fannie Mae and Freddie Mac with a government-owned corporation that could one day be sold off to the private sector. The proposal from Sen. Johnny Isakson, a former Realtor, is the latest in a series of competing measures to address the fate of the mortgage-finance giants whose government takeover has cost taxpayers $151 billion. (snip) To take the place of Fannie and Freddie, the bill would create a new government agency that would provide guarantees on securities comprised of mortgages that meet designated standards. Unlike Fannie...

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Webster City, Iowa (CNN) - As Newt Gingrich denies he was paid to lobby Republicans for mortgage giant Freddie Mac, fellow Republican presidential candidate Michele Bachmann on Wednesday challenged Gingrich's denial. "Whether former Speaker Gingrich made $300,000 or whether he made $2 million, the point is that he took money to also influence senior Republicans to be favorable toward Fannie and Freddie," Bachmann said after a campaign event in Webster City, Iowa.

Barack Obama has exhorted supporters to object to large bonus payouts at financial institutions that took TARP bailout money. The House Oversight Committee and its chair, Rep. Darrell Issa, want to know why Obama hasn’t objected to the ridiculous levels of compensation at the two largest bailout recipients — Fannie Mae and Freddie Mac. In a new report (embedded below) titled “Government-Sponsored Moguls: Executive Compensation at Fannie Mae and Freddie Mac,” Issa and the Oversight Committee detail executive compensation at the two GSEs, who — unlike their private-sector counterparts who have either fully repaid or are in the process of...

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Newt Gingrich's campaign is pushing back against criticism that the former Speaker consulted with embattled mortgage lender Freddie Mac, insisting that Gingrich did not lobby on behalf of the government corporation. Gingrich was pressed on the ties during Wednesday evening's Republican debate — the Speaker was paid $300,000 in 2006 — but insisted that he only met with Freddie in his capacity as a historian, not as a lobbyist. "I have never done any lobbying," Gingrich said. "Every contract was written during the period when I was out of the office, specifically said I would do no lobbying, and I...

Can not excerpt or re-post Bloomberg. Text at link.

Charles E. "Ed" Haldeman, Jr., has announced his plans to step down as chief executive officer of mortgage giant Freddie Mac sometime in the next year. The Federal Housing Finance Agency (FHFA), which regulates Freddie and its counterpart Fannie Mae, announced Wednesday that Haldeman is looking to leave the government-sponsored enterprise some time next year.

The desperate search for an acceptable Republican Party presidential candidate continues. Republican leaders apparently are pushing New Jersey Gov. Chris Christie, who previously said no, to jump into the race. The GOP's frustration is palpable. Mitt Romney has been running for four years but generates little enthusiasm. Rick Perry was an instant front-runner before losing much of his support after unimpressive debate performances. Michelle Bachmann briefly streaked across the political firmament but now barely registers in the polls. Newt Gingrich committed political seppuku shortly after announcing his candidacy. Ron Paul's support is fervent but limited. However, the real Republican problem...

The largest transfer of wealth from the public to private sector is about to begin. The federal government will be bulk-selling the massive portfolio of foreclosed homes now owned by HUD, Fannie Mae and Freddie Mac to private investors -- vulture funds. These homes, which are now the property of the U.S. government, the U.S. taxpayer, U.S. citizens collectively, are going to be sold to private investor conglomerates at extraordinarily large discounts to real value. You and I will not be allowed to participate. These investors will come from the private-equity and hedge-fund community, Goldman Sachs(GS_) and its derivatives, as...

WASHINGTON (Dow Jones)--Two Senate Republicans joined an effort to rapidly wind down government controlled mortgage titans Fannie Mae (FNMA) and Freddie Mac (FMCC), hoping to put pressure on Democrats to take action soon. Sens. John McCain (R., Ariz.) and Orrin Hatch (R., Utah) introduced a bill Thursday to wind down or privatize Fannie and Freddie over the next five years. Their bill mirrors one introduced earlier this month by Rep. Jeb Hensarling (R., Texas). "The events of the past three years have made it clear that never again can we allow the taxpayer to be responsible for poorly managed financial...

The Obama administration proposed raising fees for borrowers and requiring large down payments for home loans as part of a long-term effort to reduce the government's outsized footprint in the housing market, but warned that these moves could increase mortgage rates and potentially reduce the availability of the 30-year fixed rate mortgage, a mainstay of American housing for decades. In a long-awaited white paper, the administration said that it intends to wind down Fannie Mae and Freddie Mac, which together with the Federal Housing Administration provide more than 90 percent of housing finance, but said the process could take five...

The official view holds that Fannie and Freddie lowered their standards in pursuit of market share in the face of increasing competition from Wall Street. This is just another version of the standard view that the crisis was caused by greed and under-regulation—rather than being brought about by government policy. In his dissent to the official FCIC report, Wallison effectively demonstrates that a key part of that is not just wrong—it’s 100 percent backwards. Fannie and Freddie were lowering their credit standards and participating in the non-traditional mortgage market—eventually buying up the credit risk of 12 million of the 27...

It's common for companies to indemnify their officers and directors against lawsuits. But what happens when the company gets taken over by the government? Oh, you know.... Since the government took over Fannie Mae and Freddie Mac, taxpayers have spent more than $160 million defending the mortgage finance companies and their former top executives in civil lawsuits accusing them of fraud. The cost was a closely guarded secret until last week, when the companies and their regulator produced an accounting at the request of Congress. This would be amusing if it wasn't so outrageous. Remember, most of these allegations date...

Insiders at Freddie Mac are downplaying the memo revealed by Bloomberg yesterday. The memo revealed that a survey of mortgages Freddie bought from Citigroup [C 4.765 -0.035 (-0.73%) ] in late 2009 and early 2010 uncovered shockingly high rates of defects. In late 2009, for example, more than 30 percent of the mortgages in the review had flaws. These weren't old, housing-bubble-era mortgages. They were loans made in 2009. Among the defects Freddie Mac detected were a missing appraisal, missing documentation, loans exceeding the maximum amount permitted, and a construction loan described as a refinancing. In short, a mess of...

The housing recovery has stalled, but the gravy train rolls on for the government-appointed saviors of the housing market, Fannie Mae and Freddie Mac. The top executives of the taxpayer-backed companies stand to make millions of dollars in salary, deferred pay and long-term incentive awards for 2010 – including substantial sums that are performance-based, at least in name. Fannie (FNMA) CEO Michael Williams and Freddie (FMCC) chief Charles Haldeman each stand to make some $6 million this year, going by company filings that broadly outline 2009 pay and 2010 guidelines. Using the same data and assuming no one got a...

People are starting to fight back against mistreatment by mortgage lenders. And the extent of the housing mortgage mess is beginning to come to light.