Posted on 09/21/2008 6:35:28 PM PDT by silverleaf
Andrew Cuomo and Fannie and Freddie
How the youngest Housing and Urban Development secretary in history gave birth to the mortgage crisis By Wayne Barrett ...... http://www.villagevoice.com/2008-08-05/news/how-andrew-cuomo-gave-birth-to-the-crisis-at-fannie-mae-and-freddie-mac/ There are as many starting points for the mortgage meltdown as there are fears about how far it has yet to go, but one decisive point of departure is the final years of the Clinton administration, when a kid from Queens without any real banking or real-estate experience was the only man in Washington with the power to regulate the giants of home finance, the Federal National Mortgage Association (FNMA) and the Federal Home Loan Mortgage Corporation (FHLMC), better known as Fannie Mae and Freddie Mac.
Andrew Cuomo, the youngest Housing and Urban Development secretary in history, made a series of decisions between 1997 and 2001 that gave birth to the country's current crisis. He took actions that—in combination with many other factors—helped plunge Fannie and Freddie into the subprime markets without putting in place the means to monitor their increasingly risky investments. He turned the Federal Housing Administration mortgage program into a sweetheart lender with sky-high loan ceilings and no money down, and he legalized what a federal judge has branded "kickbacks" to brokers that have fueled the sale of overpriced and unsupportable loans. Three to four million families are now facing foreclosure, and Cuomo is one of the reasons why.....
(Excerpt) Read more at villagevoice.com ...
This is McCain’s pick for a new SEC Chairman?
I’m starting to wonder if McCain was being sarcastic.
The sad thing is the same thing happened in the mid 80s. Looks like we didn't learn then, and now we must pay the price.
And McCain on 60 Minutes tonight said this was the best person for the SEC job.
McLame.
What next? Franklin Raines for Treasury?
We just have to keep shining a light on this until enough people 'get it'.
That's why we need Governor Sarah Palin to "Wake Up the World"...see the video
New York Democratic Atty General
brother of ABC reporter Chris
300,000,000 people in America, and the same 0.00001 of 1 per cent of the population getting recycled time after time into positions of authority. The same bastards who break things called on to "fix" what's broken.
We suffer mightily from a failure of vision. My Aunt Sally's cat could do as well.
You know McCain’s RINO credentials keep coming through and scaring the hell out of me. He sits there with Gramm and recommends Cuomo....sheesh. If it wasn’t for Palin I’d sit this one out.
For McCain to actually “reach across the aisle,” he’d have to be reaching out to conservatives.
like appointing Obama for his cabinet?
Wow...this is from the Village Voice? I can’t see the media throwing Cuomo and Clinton under the bus on this one.
What happened to the Village Voice? Someone over there grew some huevos.
He said that?
Sheesh.
This is precisely the kind of thing that makes me say Palin is just as qualified as all three senators in the race.
This is precisely the kind of thing that makes me say Palin is just as qualified as all three senators in the race.
btt
Cuomo as NY Attorney General also launched an investigation into Fannie Mae and Fannie Mac — maybe his time at HUD taught him how unscrupulous they were. Why not wait until all the facts are in instead of immediately trashing Senator McCain. Notice how the anti-McCain crowd has jumped on this. Now for the rest of the story:
From SEMom: Well- Cuomo apparently DID do some investigating on Freddie/Fannie:
http://www.nypost.com/seven/11082007/business/fannie__freddie_hit_in_cuomo_assess_prob_543687.htm
By JANET WHITMAN
November 8, 2007
New York Attorney General Andrew Cuomo served government-sponsored lenders Fannie Mae and Freddie Mac with subpoenas yesterday as he expands his probe into bad behavior in the mortgage business that’s behind a spike in home foreclosures.
Cuomo is investigating whether home loans purchased by Fannie Mae and Freddie Mac - the nation’s biggest investors in mortgages - were based on bogus appraisals that fraudulently inflated the value of homes.
The subpoenas come a week after Cuomo accused real-estate appraisal giant First American Corp. of colluding with Washington Mutual to slap fake values on thousands of homes to help make sure loans went through.
Cuomo said at a press conference that he believes the chicanery has gone on for more than a decade and extends far beyond Washington Mutual.
“I believe it’s widespread. I believe it’s the rule not the exception. And we’re investigating Fannie Mae and Freddie Mac and other investment banks as to the underlying practices that have allowed this to go on for so long.”
Cuomo said Washington Mutual and other banks put pressure on appraisers to provide inflated values because they were in the interest of the lenders, which would reap fees and interest but be shielded from risk by quickly selling the loans off into the secondary market.
“Knowing this, Fannie Mae and Freddie Mac cannot afford to continue buying Washington Mutual mortgages unless they are sure these loans are based on reliable and independent appraisals,” Cuomo said.
With the inflated appraisals, buyers purchased homes for substantially more than they were worth, contributing to the current mortgage crisis.
Homeowners and investors who buy mortgage securities are the ones “left holding the bag,” said Cuomo.
Shares of Fannie Mae and Freddie Mac, which were created by Congress to make home ownership affordable for low-income folks, got hammered on the news. Fannie Mae fell 10 percent to $49.79. Freddie Mac dropped nearly 9 percent to $45.13.
The companies have agreed to retain an independent examiner to review appraisals and mortgages they purchased.
Brian Faith of Fannie Mae said, “It is against our interest to purchase or guarantee mortgages with inflated appraisals, and so it is in Fannie Mae’s interest that these appraisal practices be investigated.”
If the examiner finds they own mortgages with inflated appraisals, the lender must buy back the loans, he said.
Washington Mutual shares tumbled 17 percent yesterday after it warned mortgage losses would mount in 2008.
Let McCain run his independent side his way. If we don't win this election, the country will suffer to the extreme.
I sure hope he was being sarcastic. Otherwise I’d have to conclude he was being “elderly.” :p
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