FANNIE, FREDDIE AND THE FOOLS IN WASHINGTON
Carole "CJ"
Williams
October 4, 2008
NewsWithViews.com
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.
|
Subscribe to the NewsWithViews Daily News Alerts! |
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
