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  • Fannie and Freddie Did Not Cause This Crisis
    Sound bites from a hearing of the Socialist Republic of the United States:
    (minutes in extenso tinyurl.com/3g8hmn )


    Quote

    H.R. 2575—THE SECONDARY
    MORTGAGE MARKET ENTERPRISES
    REGULATORY IMPROVEMENT ACT

    Thursday, September 25, 2003
    U.S. House of Representatives,
    Committee on Financial Services,
    Washington, D.C.


    Mr. FRANK.
    …welcome the fact that we have in Fannie Mae and Freddie Mac a means of bringing down housing costs…Fannie Mae and Freddie Mac are sufficiently secure so they are in no great danger…I don't think that we have an impending disaster….
    Mr. KANJORSKI.
    …We must also ensure that the GSEs continue to achieve their statutory obligation of advancing affordable housing opportunities for low-and middle-income families…
    Ms. WATERS.
    …we do not have a crisis at Freddie Mac, and in particular at Fannie Mae, under the outstanding leadership of Mr. Frank Raines. Everything in the 1992 act has worked just fine
    …not to impede their affordable housing mission, a mission that has seen innovation flourish from desktop underwriting to 100 percent loans.
    …In 2002 alone, Fannie Mae provided $279 billion in credit serving low-and moderate-income households.
    …since the inception of goals from 1993 to 2002, loans to African-Americans increased 219 percent and loans to Hispanics increased 244 percent, while loans to non-minorities increased 62 percent.
    I am opposed to a new bureaucracy at HUD to track sub-goals. We should focus on those banks, many of them competitors of these GSEs, who avoid CRA and practice predatory lending.
    Mr. NEY.
    …The United States mortgage and credit markets are the envy of the world.
    …This agency has an important role in ensuring our nation is focused on providing decent and affordable housing for all Americans.
    Mr. BACA
    …One reason Fannie Mae has been successful is because the current status encourages them to be innovative… to be proactive in reaching out to low-income families…
    …we should not interfere with GSEs ability …to meet the needs of low-income families in underserved areas
    …GSE must …fulfill the responsibility of their congressional charter and housing mission.
    STATEMENT OF FRANKLIN RAINES, CEO, FANNIE MAE
    Mr. RAINES
    Today Fannie Mae is one of only two companies in America to guarantee the nationwide flow of low-cost mortgage capital at all times, even when other suppliers of mortgage capital cannot or choose not to provide such capital.
    …Fannie Mae has amassed over $30 billion of private equity capital to finance $2 trillion of mortgages today.
    …In 1994, we launched our trillion-dollar commitment, a pledge to provide $1 trillion in financing for 10 million underserved families before the decade was over.
    …In 2000, after we met this pledge, we launched a redoubled new pledge, our American Dream Commitment, to provide $2 trillion for 18 million underserved families before this decade is over.
    …lead the market in serving minority families. We pledged to provide $420 billion to help serve 3 million minority families…Fannie Mae boosted our pledge to $700 billion
    …Our senior debt of course is rated AAA.
    …It is by having new programs, with low down payments, and with the ability to deal with people with impaired credit and other innovations that have really allowed us to expand affordable housing.
    …we are one of the only people who will buy mortgages on Indian reservations that are governed solely by the Indian judicial system…
    …every time we had a new idea, a new activity, a new product, we had to go and get prior approval, that would … slow the process down…will bring innovation within the housing finance industry to a screeching halt.
    Mr. BACA.
    …I particularly want to thank Frank Raines…The work you do in the Latino community is very important. Both companies have impressive track records of expanding minority home ownership…
    Mr. FRANK.
    I don't see any financial crisis. You can always make things better, but I do think we should dispel the notion that we are here because there is something rotten that has gone on.
    Mr. RAINES. We are vitally committed to our housing mission…it is our number one priority.
    …Our housing mission, however, does require us to raise capital around the world. Our investors invest in Fannie Mae not because they necessarily share our housing mission, but because they think that Fannie Mae will be a good steward of the capital.
    Mr MILLER
    …either considering safety and soundness or considering how to make credit available…among…racial and ethnic minorities and just low-wealth families in general.
    EXECUTIVE DIRECTOR, INSTITUTE FOR OPPORTUNITY AND EQUALITY, NATIONAL URBAN LEAGUE
    Mr. SPRIGGS
    …the size of the securities and mortgage-backed security instruments issued by GSEs is …a little larger than the U.S. Treasury-note market. And so that means that all of us should be concerned about the safety and soundness of these enterprises, and that they are very important to the security of the American economy, if not the world's capital markets.
    …However, it is equally important to remember why Congress created the GSEs…to establish increasing access to home mortgages for underserved areas, and this mission must remain paramount in assessing different measures of safety and soundness…

    Unquote

    Have a good day
    Oct 05 09:14 am |Rating: 0 0 |Link to Comment |View article
  • Can the US Government Afford Future Bailouts?
    If I correctly understand, the authors solution goes something like this:

    I can chose between this terrible thing called depression (yuck - noooobody wants this) and no limits money print inflation. Benign, mild, you will not even notice (Aha, gimme some of this, that s more to my liking).

    Well why then all this fuss about a financial market crisis, Wall Street in turmoil, bail outs? Why even issue Government debt, treasury bills, bonds, notes and the like? Why not just print money, as you go, as you need. That s what the author tells us we can do. And while we are at it – why pay taxes, why doesn’t t the Treasury just send a check to every American, every month – and we all live happily ever after?

    No wonder the US is in a mess when such goofy theories are making the rounds. But then why not put the entire world on halluncinogen and off we are to financial Nirvana

    And if someone doesn’t t want to buy into this idea of paradise on earth, there are still mighty military options open – with no limits, with all the resources one can dream of, paid with the no limits Government money print our author just invented.
    Mind boggling!

    Have a good day

    Sep 10 05:36 am |Rating: 0 0 |Link to Comment |View article
  • Freddie/Fannie Plans In Motion; Why Are They Being Underplayed?
    Oh boy, here he goes again. Gabe Borenstein reminds me of a pickpocket hiding in a funeral home, waiting for the dead body to be dressed up only to then loot whatever junk he can find in the coffin.

    And he wants this metaphor to be called capitalism and free market!

    For a change, why not make money the old fashioned way: Earn it. And stop begging thy neighbors all over the world. How pathetic. The American people really deserve better.

    Have a good day
    Sep 06 12:13 pm |Rating: 0 0 |Link to Comment |View article
  • The SEC Panics
    Oh come on, please!
    There they go, talking free market rules and regulation about an entity that is one of the worst examples of socialist subsidized fiat money mirages the so called capitalist world has ever seen.
    Back to the US..., back to the US..., back to the USSR (copyright Beatles)
    The Funny Freddies should go the way of rotten meat – to the trash.

    Have a good day
    Jul 15 17:09 pm |Rating: 0 0 |Link to Comment |View article

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