Posted on 03/05/2009 5:49:51 AM PST by tentmaker
During the Great Depression, as borrowers defaulted on mortgages en masse and banks found themselves strapped for cash, President Franklin D. Roosevelt and Congress created Fannie Mae in 1938 in order to buy mortgages from lenders, freeing up capital that could go to other borrowers. Although Fannie Mae began with just $1 billion in purchasing power, the agency helped usher in a new generation of American home ownership, paving the way for banks to loan money to low- and middle-income buyers who otherwise might not have been considered creditworthy.
(Excerpt) Read more at time.com ...
"We've been through nearly a dozen hearings where frankly we were trying to fix something that wasn't broke. Mr. Chairman we do not have a crisis at Freddie Mac and in particular at Fannie Mae under the outstanding leadership of Mr. Frank Raines."-Rep. Maxine Waters, 2004
http://www.youtube.com/watch?v=_MGT_cSi7Rs
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History of Fannie Mae scandal
"Fannie Mae announces its long-awaited restatement, erasing $6.3 billion in profit from 2001 through June 30, 2004."
http://www.boston.com/business/articles/2006/12/07/history_of_fannie_mae_scandal/?page=1
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Bailout Politics: The Congressional Dems who enabled this crisis are now being trusted to fix it?
Thomas Sowell, September 30, 2008
http://article.nationalreview.com/?q=OWE3OWU3OTExYzNlNTUzMzY2YmJmOWZjMzcwN2M1NjU=
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Guilty Party: ACORN, Obama, and the mortgage mess
Mona Charen, September 30, 2008
http://article.nationalreview.com/?q=Mzk4MmVkNzA1NGQ2NGRkZjQ2YjNmYjdlODZkMmQ4N2I=
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An ACORN Falls from the Tree: A congressional outrage
Ken Blackwell, September 29, 2008
http://article.nationalreview.com/?q=N2Y5MTc0ZTAyMmE1Mjk3NGE3OWRiY2FkMjZlN2YxYzc=
By Jeff Poor
Business & Media Institute, 9/24/2008
excerpt...
"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."
http://www.businessandmedia.org/printer/2008/20080924145932.aspx
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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 Frank’s efforts to deregulate Fannie Mae throughout the 1990s.
So did Frank’s partner, a Fannie Mae executive at the forefront of the agency’s 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 Fannie’s 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.
"It’s 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 what’s 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 he’s gay. It’s the quintessential double standard."
A top GOP House aide agreed.
"C’mon, 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 Frank’s political affiliation was R instead of D? Imagine what the media would say if [GOP former] Chairman [Mike] Oxley’s wife or [GOP presidential nominee John] McCain’s wife was a top exec at Fannie for a decade while they wrote the nation’s housing and banking laws."
Frank’s 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 Mae’s affordable housing and home improvement lending programs."
Critics say such programs led to the mortgage meltdown that prompted last month’s 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 Clinton’s 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 today’s 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.
http://www.foxnews.com/printer_friendly_story/0,3566,432501,00.html
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Rush Limbaugh's Barney Frank/Banking Queen parody of ABBA's "Dancing Queen":
http://www.youtube.com/watch?v=ZwVWXN0Pyq4
In an article, above, it notes that in Fall 2008 the FBI was investigating Fannie Mae. Six months later... nothing. Par for the course with the FBI, an organization that leaves so much to be desired.
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