Posted on 09/11/2010 4:46:09 PM PDT by Libloather
Bankers urge gov't to pull plug on Fannie, Freddie
By Corbett B. Daly
Published September 08, 2010
WASHINGTON (Reuters) - The federal government should take mortgage finance giants Fannie Mae and Freddie Mac off life support sooner rather than later, the Mortgage Bankers Association urged Wednesday.
The bankers said Fannie Mae and Freddie Mac should move beyond the "conservatorship" that started two years ago and be placed "receivership."
"Fannie Mae and Freddie Mac have already moved well beyond the points where any other financial institution would have been put into receivership," MBA Chief Executive John Coursonand MBA Chairman-elect Michael Berman wrote in a seven-page letter to the Federal Housing Finance Agency.
As the financial crisis unfolded in 2008, then-Treasury Secretary Henry Paulson effectively took control of the firms, although he stopped short of full nationalization by placing them in a "conservatorship" to keep them off the federal balance sheet.
The government controls 79.9 percent of Fannie Mae and Freddie Mac, just shy of the 80 percent threshold for placing them on the federal books. Conservatorship is intended for firms that could be restored to health, while receivership is the end-of-the-line liquidation phase.
"The current situation is not unlike a brain dead patient who is being kept alive indefinitely by artificial life support," Courson and Berman wrote.
(Excerpt) Read more at foxbusiness.com ...
It’s not just Chase ,, it’s all the “lenders” that used the fraudulent company MERS to hide transfers and assignments ,, no docs today , no docs tomorrow ,,,
http://livinglies.files.wordpress.com/2010/09/9-09-10-ny-mers-no-authoriy-dismissed.pdf
FNM FRE have nothing to show for what they bought , the chain was broken at the very first link...
Nice to see someone else paying attention. From the article:
The government controls 79.9 percent of Fannie Mae and Freddie Mac, just shy of the 80 percent threshold for placing them on the federal books.
L
Here’s some light reading ... http://www.reoi.com/news/gse-foreclosures-and-short-sales-rising-despite-loss-mit-efforts
So you're telling me that there's a very high likelihood that almost none of these companies could actually produce the original paperwork for these mortgages if the were ordered to by a Court?
I'm not being flippant I just want to be sure I understand what you're trying to tell me.
Thanks.
Yes, you’ve nailed the issue. Once they move beyond that 79.9% threshold, the government has to own up to the liabilities, and the liabilities are HUGE. I don’t know, however, if we realized these liabilities whether we’d surpass Japans debt:GDP ratio (which is currently 190% and going up).
This was the very reason why Fannie was spun out as a “private” enterprise during the Johnson administration: to get the Fannie liabilities off the US Treasury’s balance sheet, back in the days when the US dollar was already under pressure in value and it was backed by gold, which other central banks could demand in return for Federal Reserve Notes and other obligations.
So to stall the devaluation of the US dollar in the face of the deficits caused by combined outflows from Vietnam and The Great Society, Johnson spun Fannie out. And then because Congress didn’t want to be seen as creating a ready-made monopoly, they created “Freddie” as “competition.”
The situation was made far worse in the Nixon administration, when Nixon allowed Fannie/Freddie to purchase “conforming” mortgages from the private sector.
The problem with Fannie and Freddie are that they’ve cultivated a very lush network of political hacks on their payroll from both parties. Short of a “throw all the bums out of office” revolution, there’s scant chance of any real reform of these organizations by Congress.
Its definitely true as one of my customers hired another 100 people to support a big bank affected by the decision. I don’t have any specific case information.
I’ve tried doing a search but there are too many lawsuits against the specific bank.
Here is a link with some background on what they are doing - http://online.wsj.com/article/SB10001424052748704343104575033543886200942.html
And if these now Nationalized banks don't happen to have $2.7 billion dollars lying around?
It was the derivatives desks that sat along side the RE and loan desks. Leveraged a mortgage 20 maybe 30 times or more when it was all said and done.
It’s no secret that banks are losing foreclosure cases in Courts when asked to produce the title deed. Sliced and diced 20 times, there is no document showing the deed holder any longer. Banks who sold derivatives of their mortgages are left with just servicing the loans and have no standing in a court trying to foreclose.
Could account for the backlog of foreclosures and ex-note payers hanging out for years in bank owned home. Beside the GSEs beginning to kick back bailed out mortgages to originating banks due to lack of proper paperwork.
No wonder entities want the GSEs shut down before banks go belly up.
Very interesting. Thank you.
Most of the original paperwork was reduced to a scanned image and was shredded, some companies did the right thing and stored the paperwork at a secure place like an “Iron Mountain” sort of company.
More importantly in the securitization process the note and the deed were seperated so that the borrower received claim on the deed while the note was never acted upon and instead the actual cash money lender created and sold some kind of a mortgage backed bond through their purchase of a CMO/CDO. The “bifurcation” of the note (splitting and selling the obligation , usually to a pool , and the comingling of funds by the servicer & master servicer) makes it a legal nullity, it is unenforceable on the borrower... the borrower is not a part of the “bond” agreement, the parties there are the cash money lender and his pigeon.
This explains why the mortgage creators were unconcerned with the creation of MERS to track ownership of the notes through their electronic system. They knew what was being tracked was a nullity and would eventually be challenged in the courts, however it made their system workable by allowing mortgages to be traded rapidly and without paying the counties their recording fees, they just assumed with 62 million mortgages in the system that the courts would allow it to continue just on the sheer weight of the fraud they were perpetuating.
IMO its larger than $2.7B since Fannie and Freddie back 90% of the loans in the US. Most loans are sold shortly after closing. The problem they are having is in the transfer of the loan from the originator to the investment company. They transferred ownership electronically and not the actual paper. From what I've read and seen I'd wager a significant portion of those loans are legally un-collectable.
For 12 years or so the “assignments” (transfers of ownership) were nothing more than a name change on one line of a spreadsheet,,, NEVER LEGALLY SIGNED, NOTARIZED or RECORDED AT YOUR COUNTY COURTHOUSE ... This is where the foreclosures fail ,, the lawyers are forging proper assignments (years after they should have actually occurred) and offering them as “evidence” of ownership...
The homeowners owe “somebody” , the discovery of who that “somebody” is and what they owe is being blocked... and false lenders are substituting themselves as the “party in interest” ... It’s a KLUGE.
I’ve considered requesting this information from my mortgage servicing company. I’m sure it would require a subpeona.
Wow and you deduced that I am a liberal merely from my statement that you have no clue on the subject? As if we needed more proof that you have not ability to think whatever.
It's also funny to see a leftist ignoramus calling someone a "liberal." Your level of discourse is really an asset here.
Take more meds and buy yourself a book. Without pictures this time.
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