Are You Ready? 6 – 7 Million More Foreclosures. Politicians criticize Fannie Mae & Freddie Mac out of one side of their mouths. Read: Who got the most money from FNMA.

Are You Ready? 6 – 7 Million More Foreclosures. Politicians criticize Fannie Mae & Freddie Mac out of one side of their mouths. Read: Who got the most money from FNMA. (by Joe /vera)

Scott Simon, a managing director and head of global asset-giant Pimco’s mortgage- and asset-backed securities teams, helped his firm avoid losses that hit Wall Street. is credited with foreseeing the housing crash and helping his firm dodge losses that plagued Wall Street.

He was recently asked if more foreclosures are expected to hit the market? He responded that over the next three years it could be as many as 6 -7 million more foreclosures.

Pulled the following from an old report. It was called shot in the Fannie Mae.

1997

Fannie Mae is a GSE (Govt. Sponsored Entity) regulated by Congress.
Fannie Mae buys mortgages from other companies.
It is backed by the taxpayers for all losses, but keeps all profits.

1998

Banks begin making thousands of bad loans,0 down, no documentation, for 120%! (1998 – 2008).
Executives at Fannie receive huge bonuses if loan targets are met.
Franklin Raines and Jamie Garelick from the Clinton Administration are appointed to run Fannie Mae.

2003

President Bush proposes a new oversight committee to clean up Fannie Mae, but Democrats derail the effort.

1999-2004

Raines earns $100 million in bonuses.
Garelick earns $75 million in bonuses.
In 2004, Enron collapses, congress investigates, Executives Skilling & Lay go to jail, for fraudulent bookkeeping.
Congress responds with the Sorbanes-Oxley Act, more heavy regulation of corporations.

2004

An OMB investigation finds massive fraudulent bookkeeping at Fannie Mae.
False numbers triggered executive bonuses every year.
Congress holds no hearings, no one goes to jail, or is punished.
WHY NOT?

1999-2005

Fannie Mae gives millions to Democratic causes, examples: Jesse Jackson & ACORN.
Fannie Mae pays millions to 354 congressmen and senators, from both parties.
Who got the most money?

#1 Sen. Christopher Dodd , (D-CT) Chairman of the Banking, Housing, & Urban Affairs Committee

#2 Sen. Barack Obama , (D-IL) Federal Financial Management Committee

#3 Sen. Chuck Schumer, (D-NY)‏ Chairman of the Finance Committee

#4 Rep. Barney Frank, (D-MA)‏ Chairman of the House Financial Services Committe

2005

Franklin Raines & top execs are forced to resign from Fannie Mae.
They do not go to jail.
There is no media “perp. walk.”
They keeps all of their bonuses
They finally pay $31.4 million in civil fines.

2005

The Federal Housing Enterprise Regulatory Reform Act is sponsored by: Sen. John McCain, (R-AZ)‏ Armed Services, & Commerce, Science, & Transportation, “If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.”
None of the top 4 recipients support the legislation.
The reform act is blocked by Democrats, never even making it out of committee.
None of the politicians return any of the money, tainted by fraud.

2008

Fannie Mae & Freddie Mac go bankrupt and the govt. takes them over completely.
Lehman Brothers, goes bankrupt from investing in bad mortgages.
AIG get $85 million in loan guarantees, after insuring bad loans & projects.
Taxpayers will ultimately pay BILLIONS.

2008

Franklin Raines is now an advisor to the Obama Campaign which wants the govt. to take over more of the economy.
Did government involvement in the mortgage market work out?
How will even MORE government involvement make it better? Do you want to be Sweden?
McCain favors revising regulations & loan standards, selling off Fannie & Freddie.

Sources

Congressional Record, 5/25/06
“Hannity & Colmes,” Fox News, 9/16-9/17/08
Herald Tribune, 4/18/08
New York Times, 9/13/03
www. govtrack.com, 9/17/08

This was produced as a Power Point presentation by an Adjunct Instructor a Dennis Jantz in 2008.