Posted on 04/17/2013 2:16:54 PM PDT by Slyfox
It is time to close both Fannie Mae and Freddie Mac—the government-sponsored mortgage giants. Both entities distort the country’s housing finance market by issuing mortgage-backed securities with subsidized government guarantees that the mortgages will be repaid. If guarantees are necessary, they should be priced and issued by the private sector, not by the state. Financial institutions expert David C. John details specific steps to achieve this shutdown carefully and methodically without further upsetting the delicate housing market—and without making the situation worse.
(Excerpt) Read more at heritage.org ...
UNTIL......
"They Are"...
**(silly dreamer.. must be a republican..)
Naive pipe dream. The two will be eliminated when Democrats make it illegal to own property. People will be assigned houses and they will be told where/how to work. It’s been done before, they’ll do it again.
Without them, there would be no fixed or adjustable-rate mortgage loans with 5, 10, 15, 20 or 30 year terms.
That was a good idea.
Unfortunately, politics took control and politicians starting micro-managing what was happening, based on race, ethnicity, income, etc. and the whole mess collapsed.
I once worked for a quasi-governmental agency that bought mortgage loans. The board of directors kept asking me why we made hardly any loans in one city, county or another.
I explained that we don't "make" loans. We "buy" loans. If there were no sales or qualified loan applicants, that was not our fault.
You would have thought I shot the Pope when I said that.
The same thing happened with FNMA and FHLMC, but there was nobody there to resist.
By the way, I was sh!tcanned by politicians for explaining the facts of life.
Horray for you. The same thing happened to me once on the county level for the same reason.
Best career move in my life.
Nice piece, and plan, from the Heritage Foundation - but, zero chance of it ever happening. Even though something like this should have been done decades ago.
“I was sh!tcanned by politicians for explaining the facts of life.”
It is unfortunate indeed that the two of you didn’t win the battle. Not only that but without any fear of argument, I can say the battle is ongoing, and we are doing just what was done before the crash. Perhaps not quite to the level before the crash but I recognized the business as usual not too long after. I might add, it was so obvious that even I could see it.
Excerpt ...Ten years ago the typical conforming mortgage required a down payment of 10-20%, and low-down payment mortgages were considered too risky. But then we helped to standardize the 3-5% down payment loan, brought it to global capital markets, and made it available to lenders and communities nationwide. Now low-down payment loans are commonplace. And we just adopted a new variance in our underwriting standards that will make the $500 down payment loan widely available as well...
In 1994, we pledged to provide $1 trillion in capital to ten million underserved families by the end of 2000. Thanks to our housing and industry partners, we met that goal early.
Then in 2000, we launched our American Dream Commitment, a pledge to provide $2 trillion in capital to 18 million underserved families by the year 2010, including $400 billion targeted specifically for minority families (later raised to $700 billion in response to President Bush’s Minority Homeownership Initiative). After four of the strongest years in housing and mortgage finance history, we’ve already surpassed the top-line goals of this commitment. But our work is far from complete.
So in January 2004, we announced our Expanded American Dream Commitment and pledged significant new resources to tackle America’s toughest housing challenges. Our new commitment has three main goals.
First, we will expand access to homeownership for six million first-time home buyers in the next ten years, including 1.8 million minority first-time home buyers.We also will help raise the national minority homeownership rate from 49 percent to 55 percent, with the ultimate goal of closing it entirely.
Second, we will help new and long-term homeowners stay in their homes through a series of initiatives, and commit $15 billion to preserve affordable rental housing and $1.5 billion to support the revitalization of public housing communities.
Third, we will increase the supply of affordable housing and support community development activities in at least 1,000 neighborhoods across the country through our American Communities Fund, and through targeted investments like Low-Income Housing Tax Credits that help finance affordable rental housing.
It is because of initiatives like our Trillion Dollar Commitment and our American Dream Commitment that we have exceeded our HUD affordable housing goals for ten consecutive years. (End Raines excerpt.) (NOTE Raines is a Clinton appointee)
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FRANKLIN RAINES----THE BIG F/M FISH THAT GOT AWAY WITH A BUNDLE
The Office of Federal Housing Enterprise Oversight’s report says that F/M CEO Franklin Raines---a Clinton appointee---and other Fannie Mae bigwigs, deliberately and intentionally manipulated financial reports to artificially hit earnings targets in order to trigger multi-million dollar bonuses for senior F/M executives.
Ex-Fannie CEO Franklin Raines should be behind bars for life. He is a crook of the first order. This thief Raines cooked the FM books precipitating losses of $9B (that we know of) for the single purpose of creating bonuses for himself and other F/M insiders. The SEC said Raines broke accounting rules by playing with risky derivatives.
RAINES COOKS THE F/M BOOKS---WALKS AWAY A MULTI-MILLIONAIRE After Raines was fired and exposed as a fraudster for cooking the govt books, Raines walked away w/ $90 million dollars, a $26 million parachute, PLUS..... Raines gets a MONTHLY pension of $116,300 for life. Raines had already collected $4.87 million in "special performance" shares. Raines owns options giving him $5.8 million in net profit after redemptions, plus another $8.7 million in deferred compensation for his six years at the F/M helm. There's more.
Raines keeps $5 million of paid-up life insurance. He and his spouse get free medical and dental benefits for life, worth over $1 million. NOTE: Raines earned $20 million in salary, bonuses and stock awards (that we know of) in one year.
To keep Raines happy within philanthropic circles, Fannie Mae will match Raines' charitable contributions by $10,000 a year.
After he was fired, Raines told the F/M board that he's entitled to get paychecks until June 22 giving him another $600,000, which triggers a $2,000 monthly raise in his pension.
Fannie/Freddie are centerpieces of the criminal enterprise called the Democrat Party-—where Dem cronies and collaborators loot the organization, get cushy jobs, bonuses, and the like.
Fannie Mae’s political machine dispensed campaign contributions, gave jobs to friends and relatives of legislators, hired armies of lobbyists (even paying lobbyists not to lobby against it), paid academics who wrote papers validating the home ownership mania, and spread “charitable” contributions to housing advocates across the congressional map.
Fannie Mae serves as an industrial-sized patronage factory — sharing profits with political allies, spreading taxpayer funds to voting blocs——like ethnic groups-——and doling out jobsto left-wing academics, Washington has-beens and back-scratching buddies.
Obama insider Fannie Mae exec Jim Johnson got sweetheart loans from shady subprime Countrywide. Pols raked in six-figure salaries as F/F engaged in Enron-style accounting, plunged into debt and helped usher in the subprime housing meltdown through cockamamie lending practices.
Bill Clinton appointed Franklin Raines, Daley and Rahm Emanuel just as the quasi-governmental F/M engaged in rampant book-cooking so that F/M insider could help themselves to massive bonuses.
The Chi/Tribune exposed how political whore Rahm Emanuel’s “profitable stint” was low-show w/ no work involved. Emanuel was not even assigned to committees, according to company proxy statements. Immediately upon joining the board, Emanuel and other insiders qualified for $380,000 in stock and options plus a $20,000 annual fee, public records indicate. W/ Wall Street Rahm Emanuel at F/M, accounting tricks were used to mislead shareholders about outsize profits F/M reaped from risky investments.
The goal was to cook the books to keep fraudulent earnings on the books, to make Freddie Mac look profitable on paper-——AND to fraudulently obtain humongous annual bonuses for political insiders.
Never say never.
Don’t forget about the Banksters (ie Gangsters in pin stripe suits) who lobbied to create these monsters in order to eliminate the banks risk. Another example of crony capitalism.
HOORAY David C. John at Heritage! DEFUND socialist collectives, foreign and domestic. DISMANTLE domestic social programs. BIG GOVERNMENT IS CRONY SOCIALISM
“Socialism Is Legal Plunder” - Bastiat
Proof...(with new “Sequester to Spending Ratio” and “Tax Increases to Spending Ratio”)...here....
Rapidly approaching 17 TRILLION US National Debt not including UNFUNDED MARXIST MANDATES
Music to read this post by....
http://www.youtube.com/watch?v=zQndBhB3ULg
Thanks
You, sir or madame, are a reactionary.
FNMA was chartered in the 1930's. It was fine until Jimmy Carter and his successors.
I have already said that the original purpose was laudatory - bank liquidity.
Without FNMA and FHLMC, neither your parents, nor you, nor I would have ever owned a home because long-term fixed-rate mortgages on single-family homes were simply not available.
I have also said that the problems were not created by "banksters", but by politicians who eventually pressured a needed conduit into providing social services.
FNMA and FHLMC were once the defining source for prudent mortgage underwriting criteria.
Their thrust was subsequently transmogrified into something other than what they were meant to be by politicians trying to buy votes and accelerated when Democrat operatives went straight from White House to high-level positions in both organizations.
Do you even know who Franklin Raines is?
Let up on the bankers, or as you say "banksters". They are not at fault and the majority of them would like to see a return of the FNMA and FHLMC of old. Not only did those organizations provide liquidity, they provided guidance.
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