Additional Titles









The Trashing of The American Dream









Carole "CJ" Williams
October 4, 2008

Fannie Mae and Freddie Mac are “government-sponsored enterprises” (GSEs), which means they’re privately owned and operated, but still receive support from the Federal Government. The preferential treatment afforded Freddie and Fannie by the Fools in Washington, D.C. includes a $2.5 billion line of credit with the U.S. Treasury for each of the corporations. Additionally, the government doesn’t require Fannie and Freddie to pay taxes on anything other than real estate and they don’t have to register their bond issues with the Securities and Exchange Commission, which puts them beyond reach of the SEC’s anti-fraud regulatory authority.

Fannie and Freddie buy mortgages from banks and other lenders and repackage them as securities, or mortgage-backed bonds, that are then sold to investors at low interest rates. Using the money they get from those bonds and to keep the housing finance system going, the gruesome duo buys more and more mortgages from banks and other lenders, which, in turn, use Fannie and Freddie’s money to make more and more new mortgages for the lowly sheeple.

Fannie Mae, formally known as the Federal National Mortgage Association, and Freddie Mac, formally known as the Federal Home Loan Mortgage Corporation, were chartered by Congress to reduce homeowners’ borrowing costs, thus making owning a home a more lucrative proposition. But, as usual, when it comes to Congress, things are never quite that simple and the best laid plans often go awry when greed rears its ugly head.

Fannie was born in 1938 as part of Democrat President Franklin Roosevelt’s ‘New Deal’ to get America back on track after the Great Depression; her equally predatory brother, Freddie, was hatched much later.

According to an informative article ‘What Are the Origins of Freddie Mac and Fannie Mae?’ written by Rob Alford in 2003 and posted at George Mason University’s History News Network, “Fannie Mae was established in order to provide local banks with federal money to finance home mortgages in an attempt to raise levels of home ownership and the availability of affordable housing.

Initially, Fannie Mae operated like a national savings and loan, allowing local banks to charge low interest rates on mortgages for the benefit of the home buyer. This lead to the development of what is now known as the secondary mortgage market. Within the secondary mortgage market, companies such as Fannie Mae are able to borrow from foreign investors at low interest rates because of the financial support that they receive from the U.S. Government. It is this ability to borrow at low rates that allows Fannie Mae to provide fixed interest rate mortgages with low down payments to home buyers. Fannie Mae makes a profit from the difference between the interest rates homeowners pay and foreign lenders charge.

For the first thirty years following its inception, Fannie Mae held a veritable monopoly over the secondary mortgage market. In 1968, due to fiscal pressure created by the Vietnam War, Lyndon B. Johnson privatized Fannie Mae in order to remove it from the national budget. At this point, Fannie Mae began operating as a GSE, generating profits for stockholders while enjoying the benefits of exemption from taxation and oversight, as well as implied government backing. In order to prevent any further monopolization of the market, a second GSE known as Freddie Mac was created in 1970. Currently, (2003) Fannie Mae and Freddie Mac control about 90 percent of the nation’s secondary mortgage market.”

Because of the savings and loan crisis during the 1980s, the Fools in Washington decided they’d best do something about making sure there was better oversight of their spawn, Fannie and Freddie, and so in 1992 they created another bureaucratic watchdog agency to keep an eye on the two GSEs, named it the ‘Office of Federal Housing Enterprise Oversight’, and housed it in the Department of Housing and Urban Development. At that time, Fannie, Freddie, and their allies, including some foolish federal legislators, successfully beat back attempts to impose stricter oversight by the Treasury Dept., the Federal Deposit Insurance Corp., or the Federal Reserve.

All seemed well with the world, as far as Freddie and Fannie were concerned, until around January 2003 when Freddie’s corporate moguls announced that the corporation had been cooking its books for quite some time and misleading its stock holders, as well as the public and D. C. Fools. Soon after Freddie’s announcement, Fannie was forced to admit that it, too, had been doing the same.

Once again, the Fools in Washington pompously beat their chests, strutted for the cameras, and vowed to do whatever was necessary to get Fannie and Freddie under control. However, although at that time the Bush administration recommended a significant regulatory overhaul of the two lending institutions, complete with steps that should be taken to keep them in check, the obstructionist Democrats and RINOs in Congress turned thumbs down to the administration’s proposal.

Among the recommendations made, but not acted upon, was that oversight should be removed from the Office of Federal Housing Enterprise Oversight and turned over to a new agency created within the Treasury Dept. that would supervise Fannie and Freddie and closely watch their ballooning, risky portfolios to make good and sure they were being managed appropriately.

Had this been done five years ago, perhaps the American taxpayers wouldn’t now be on the hook for a multi-billion dollar bailout for the government’s two privileged and privatized lending institutions. But no, in 2003 our elected Fools, who are wined and dined by Fannie and Freddie’s lobbyists and count on campaign contributions from individuals associated with their pet lending enterprises, as well as their political action committees (PACs), took the side of Rep. Barney Frank (D-Massachusetts), the current chairman of the House Financial Services Committee and former boyfriend of Herb Moses, who was once employed as Fannie’s director of housing initiatives.

At the time of the 2003 “cooked books” scandal, Rep. Frank said, “These two entities – Fannie Mae and Freddie Mac – are not facing any kind of financial crisis. The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”

From 1989-2008, Rep. Frank has received $42,350 in campaign contributions from individuals associated with Fannie and Freddie, as well as their PACS. The top recipient during the same time frame is Sen. Christopher Dodd (D-CT) with $165,400. Barack Hussein Obama, who’s only been in federal office since 2005, follows Dodd with $126,349 and John McCain is way down the list with $21,500. As of Sept. 11, 2008, Freddie and Fannie had gifted 354 of our elected Fools with a grand total of $4,844,572.00. Is it any wonder the Fools are so willing to bail out their errant government-sponsored lending enterprises?

Last year, as many, many folks were losing their homes because they could no longer afford their “low-interest” mortgage, Freddie’s Chairman and CEO, Richard Syron, received a salary and compensation package worth nearly $19.8 million despite the fact that the mortgage company’s stock lost half its value. Fannie Mae, which lost $2.1 billion last year, paid its CEO, Daniel Mudd, $13.4 million, plus $5.4 in stock awards.

Though some may not realize it, one of the reasons so many people are losing their homes right now is because they were chummed into buying homes they really couldn’t afford. You see, back in 1998, the Rev. Jesse Jackson accused Freddie Mac of racial discrimination and began a campaign to get major shareholders to sell their stock. Jackson didn’t let up and so, perhaps to shut him up, Freddie Mac began to give money to the rabble rouser’s causes, not the least of which is his Rainbow/PUSH Coalition that promotes a financial literacy program for African Americans who are down on their luck.

Freddie’s answer to Jackson’s demands, or at least one answer, is apparently its ‘Catch the Dream’ program, which is designed to sucker in new low-income mortgage holders by teaching them to be more financially savvy.

A simple Google search using the words ‘Freddie Mac Catch the Dream’ will turn up all sorts of goodies, including a Lansing area brochure that lets poor folk know that they can own a home with as little as a $3,000 down payment. Furthermore, if the home is valued at $110,000 or under, they could likely qualify for down payment assistance, no doubt with taxpayer money. Also included in the brochure is information about Freddie Mac’s ‘Credit Smart’ program. Those who successfully complete the program can be referred to Freddie’s ‘Catch the Dream’ partners, namely the Michigan State Housing Development Authority, which may assist them in applying for mortgages and home loans. Mobile ‘financial literacy’ vans are brought into neighborhoods, making it easier to con poor folks into buying a home.

In fact, in a 2004 press release Freddie Mac let it be known to Detroiters that “local lenders will provide low down payment requirements and low cash-to-close options. In some cases, qualified borrowers can obtain a mortgage by putting down no more than $500 from their own funds.”

Now Jesse Jackson is roaming around the country with a new theme song titled, “Save the Dream.” He showed up in Michigan last October to help Gov. Granholm launch her very own “Save the Dream” campaign, whereby the state’s Housing Development Authority will implement two proposed public assistance programs to help low-income Michigan residents who are facing foreclosure. Granholm has endorsed both programs, of course, and has urged Michigan’s lawmakers to introduce and pass enabling legislation.

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So, not only are the Fools in D.C. looking to have taxpayers bail out Fannie and Freddie, but the Fools in Michigan’s state capitol are looking to have taxpayers bail out Fannie and Freddie’s victims, too.

� 2008 Carole "C.J." Williams - All Rights Reserved

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C. J. (Carole) Williams lives in Michigan's beautiful Upper Peninsula. She writes a weekly newspaper column, "On Target with C. J. Williams", for Ontonagon's Lake Superior Voice ( and is also a guest writer for the Women Hunters Club (, an online organization dedicated to the encouragement, education, and promotion of women in the hunting traditions.

For the past several years, C. J. has been monitoring the eco-environmental movement and the UN's Agenda 21 in her state, as well as America, which she strongly believes has done more to destroy our nation than to make it as strong and prosperous as it could and should be.

E-Mail: [email protected]










So, not only are the Fools in D.C. looking to have taxpayers bail out Fannie and Freddie, but the Fools in Michigan’s state capitol are looking to have taxpayers bail out Fannie and Freddie’s victims, too.