The best explanation of this Fannie Mae crisis I have ever seen was on a couple of episodes of “The Sopranos”. Tony has a Newark city councilman in his pocket. He decides to buy at bargain basement prices a row of dilapidated homes, and sell them to an intermediary—something like “Homes for the Underserved”—run by a black COMMUNITY ACTIVIST.
Soprano gets a doctor friend with good credit to use as his frontman/buyer. Through much finagling, the houses are turned over to the Community Activist and with the help of the City Councilman, they are sold to un-creditworthy minorities for 3 times their value —loans guaranteed by the Federal program—and the profit all goes back to Tony and the Mob. Minus 5% to the councilman; 5% to the doctor/frontman; and 5% to the “Community Activist”.
The one who gets roughed up the most is the appraiser—a geeky guy who doesn’t want to over-appraise the houses until Tony’s boys beat the **** out of him.
Multiply this by Mob+FannieMae+corrupt-local-pols+Community Activist crooks in hundreds of cities across the nation and VOILA!!! The Fannie/Freddie crisis.
Just fiction? I think NOT!!!
Just fiction? I think NOT!!!
Well, New Jersey maybe but Chicago has a reputation of honesty and transparency. It couldn’t happen there. /s