Skip to comments.Fannie Mae and Freddie Mac are Pushing Banks to Buy Bad Loans
Posted on 03/05/2010 11:31:36 AM PST by Shellybenoit
Isn't this how we got into trouble in the first place? Banks being forced to write bad mortgages were forced to hold too many bad loans? Then why are the federal government-owned Fannie Mae and Freddie Mac pushing banks to buy back their lousy loans. Its kind of like the "anti-TARP," instead of helping out banks, we are forcing them to rack up losses.
Bloomberg is reporting that Fannie Mae and Freddie Mac may force lenders including Bank of America Corp., JPMorganChase & Co., Wells Fargo & Co. and Citigroup Inc. to buy back $21 billion of home loans this year as part of a crackdown on faulty mortgages.
(Excerpt) Read more at yidwithlid.blogspot.com ...
Democrats caught on tape (2008)...
“Shocking Video Unearthed Democrats in their own words Covering up the Fannie Mae, Freddie Mac Scam that caused our Economic Crisis”
Is Barney looking to inject cash into Fannie again?
Media Mum on Barney Frank's Fannie Mae Love Connection:
Democratic House Financial Services Committee Chair promoted GSEs while former 'spouse' was Fannie Mae executive
By Jeff Poor
Business & Media Institute, 9/24/2008
"Frank, who is openly gay, had a relationship with Herb Moses, an executive for the now-government controlled Fannie Mae. The column revealed the two had split up at the time but also said Frank was referring to Moses as his "spouse." Another Washington Post report said Frank called Moses his "lover" and that the two were "still friends" after the breakup.
Frank was and remains a stalwart defender of Fannie Mae, which is now under FBI investigation along with its sister organization Freddie Mac, American International Group Inc. (NYSE:AIG) and Lehman Brothers (NYSE:LEH) all recently participants in government bailouts. But Frank has derailed efforts to regulate the institution, as well as denying it posed any financial risk."
Lawmaker Accused of Fannie Mae Conflict of Interest
By Bill Sammon, October 03, 2008
WASHINGTON -- Unqualified home buyers were not the only ones who benefitted from Massachusetts Rep. Barney Franks efforts to deregulate Fannie Mae throughout the 1990s.
So did Franks partner, a Fannie Mae executive at the forefront of the agencys push to relax lending restrictions.
Now that Fannie Mae is at the epicenter of a financial meltdown that threatens the U.S. economy, some are raising new questions about Frank's relationship with Herb Moses, who was Fannies assistant director for product initiatives. Moses worked at the government-sponsored enterprise from 1991 to 1998, while Frank was on the House Banking Committee, which had jurisdiction over Fannie.
Both Frank and Moses assured the Wall Street Journal in 1992 that they took pains to avoid any conflicts of interest. Critics, however, remain skeptical.
"Its absolutely a conflict," said Dan Gainor, vice president of the Business & Media Institute. "He was voting on Fannie Mae at a time when he was involved with a Fannie Mae executive. How is that not germane?
"If this had been his ex-wife and he was Republican, I would bet every penny I have - or at least whats not in the stock market - that this would be considered germane," added Gainor, a T. Boone Pickens Fellow. "But everybody wants to avoid it because hes gay. Its the quintessential double standard."
A top GOP House aide agreed.
"Cmon, he writes housing and banking laws and his boyfriend is a top exec at a firm that stands to gain from those laws?" the aide told FOX News. "No media ever takes note? Imagine what would happen if Franks political affiliation was R instead of D? Imagine what the media would say if [GOP former] Chairman [Mike] Oxleys wife or [GOP presidential nominee John] McCains wife was a top exec at Fannie for a decade while they wrote the nations housing and banking laws."
Franks office did not immediately respond to requests for comment.
Frank met Moses in 1987, the same year he became the first openly gay member of Congress.
"I am the only member of the congressional gay spouse caucus," Moses wrote in the Washington Post in 1991. "On Capitol Hill, Barney always introduces me as his lover."
The two lived together in a Washington home until they broke up in 1998, a few months after Moses ended his seven-year tenure at Fannie Mae, where he was the assistant director of product initiatives. According to National Mortgage News, Moses "helped develop many of Fannie Maes affordable housing and home improvement lending programs."
Critics say such programs led to the mortgage meltdown that prompted last months government takeover of Fannie Mae and its financial cousin, Freddie Mac. The giant firms are blamed for spreading bad mortgages throughout the private financial sector.
Although Frank now blames Republicans for the failure of Fannie and Freddie, he spent years blocking GOP lawmakers from imposing tougher regulations on the mortgage giants. In 1991, the year Moses was hired by Fannie, the Boston Globe reported that Frank pushed the agency to loosen regulations on mortgages for two- and three-family homes, even though they were defaulting at twice and five times the rate of single homes, respectively.
Three years later, President Clintons Department of Housing and Urban Development tried to impose a new regulation on Fannie, but was thwarted by Frank. Clinton now blames such Democrats for planting the seeds of todays economic crisis.
"I think the responsibility that the Democrats have may rest more in resisting any efforts by Republicans in the Congress or by me when I was president, to put some standards and tighten up a little on Fannie Mae and Freddie Mac," Clinton said recently.
Bill Sammon is FOX News' Washington Deputy Managing Editor.
Rush Limbaugh's Barney Frank/"Banking Queen" parody of ABBA's "Dancing Queen" (fun-nee!):
I guess Fannie and Freddie bought too many bad loans from the banks in the first place.
Apparently, they learned nothing from the near-collapse.....
I’ll say it again, the government game called “affordable housing” is a scam in the same way AGW is. Anyone for it, responsible, promoting it, agreeing with it, should go straight to jail, and never work in Government ever again, beginning with those who stole multi-millions in bonuses running the program, and Barney Frank, and Chris Dodd, and that would be the tip of the iceberg.
We can thank Leftist groups who pushed to have Jimmuh Carter sign the Community Re-investment Act in 1977 that forced banks to make those riskier loans. Then ACORN came along and urged Clinton to force banks to make a higher percentage of their loans to that same demographic of people.
The push back is for loans that have been determined to fail the “reps and warrants” of the seller / servicer contract.
If you sell a loan and represent the borrower had a 720 FICO and it turns out that it was really 660, you have to buy the loan back from the buyer.
Marxist Anarchy in action.
So Fannie and Freddie are vilified for not wanting the bad loans. And then, of course, vilified for needing more money from the Feds to cover the bad loans the banks sold them. It’s a tidy system.
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