Warnings saw loan problems at Freddie, Fannie: report

[kaydee457 13]

let's see where these hearing are going to take us...We'll see if this committee's going to get to the root of this debacle; the Democrats, and their insistance that banks engage exactly the kind of loans I've highlited in the article under the guise of providing "Low income" mortgages. Social engineering gone awry!

Barney Frank (D), Chistopher Dodd (D), Chuck Schumer (D) and other democrats resisted oversight of Fannie/Freddie and are responsible for this debacle.

WASHINGTON (Reuters) – Documents show that top executives at Fannie Mae and Freddie Mac were warned years ago that the firms were offering mortgages that could pose a long-term danger to the companies, borrowers and the industry, The Washington Post reported on Tuesday.

In documents obtained by the newspaper, Fannie and Freddie pushed into new, risky markets despite debates within the companies about whether the moves were prudent.

In early September, Fannie Mae and Freddie Mac, the two largest U.S. sources of mortgage finance, were seized by regulators as mounting losses and investor anxiety pushed the companies to the verge of collapse.

Former Freddie chief enterprise risk officer David Andrukonis said in a memo to former Freddie chief executive Richard Syron and other executives the firm was buying mortgages that appear "to target borrowers who would have trouble qualifying for a mortgage if their financial position were adequately disclosed."

Top officials at Fannie Mae also were told that the company needed to find ways to buy subprime mortgages because of competitive pressures, despite increasing risks and the failure of consumers to understand the terms of the loans.

The documents show top executives at both companies were told that the new subprime loans and mortgages made without verification of income, assets or employment, were dangerous both to the companies and to the borrowers they were charted by Congress to help.

Former executives from both companies are due to testify before the U.S. House of Representatives Committee on Oversight and Government Reform on Tuesday to discuss their downfall.

(Reporting by Christopher Doering; editing by Patricia Zengerle)

source

Edited December 9, 2008 by *entitlements_yay

[Ban Hammer 14,200]

the fallout from this should be interesting.

[Pinocchio Liberal 268]

Oh, the silence is deafening!

[Ban Hammer 14,200]

bump

[kaydee457 13]

Oh, the silence is deafening!

Of course. The lefties in this forum don't want to be confused by the facts; Frank, Dodd, Schumer, and Rangel, all democrats are the pricinpals in this debacle and caused this recession by resisting proposed oversight by the Bush administration......

The democrats are wholly responsible for this economic pain we're experiencing but as the lefties in this forum, as well as the lefties in the very biased media, they would rather push this off on Bush.

That's characteristic of lefty loons.....Oh, I think they're called LIBERALS but lately they want to call themselves "Progressives". Yeah, right!

Edited December 10, 2008 by *entitlements_yay

[mRx 16]

Oh, the silence is deafening!

Of course. The lefties in this forum don't want to be confused by the facts; Frank, Dodd, Schumer, and Rangel, all democrats are the pricinpals in this debacle and caused this recession by resisting proposed oversight by the Bush administration......

The democrats are wholly responsible for this economic pain we're experiencing but as the lefties in this forum, as well as the lefties in the very biased media, they would rather push this off on Bush.

That's characteristic of lefty loons.....Oh, I think they're called LIBERALS but lately they want to call themselves "Progressives". Yeah, right!

Kaydee, these are not facts.

What caused this debacle is our Federal Reserve System. This counterfeiting business was constructed by a Republican, then refined and enacted into law by Democrats. A "reach across the table" bipartisan rape of our wealth.

Both parties are for bigger government, and more regulation. For that is where they draw their power and influence. And both sides will forever bicker over the means and methods used to govern regulation and NEVER the regulation itself.

You're running in place.

[William33 110]

What caused this debacle is our Federal Reserve System. This counterfeiting business was constructed by a Republican, then refined and enacted into law by Democrats. A "reach across the table" bipartisan rape of our wealth.

Both parties are for bigger government, and more regulation. For that is where they draw their power and influence. And both sides will forever bicker over the means and methods used to govern regulation and NEVER the regulation itself.

You're running in place.

Huh? What is your basis for this supposition? Without a "non-partisan" Central Banking System, this country would run amok every few years.

[mRx 16]

What caused this debacle is our Federal Reserve System. This counterfeiting business was constructed by a Republican, then refined and enacted into law by Democrats. A "reach across the table" bipartisan rape of our wealth.

Both parties are for bigger government, and more regulation. For that is where they draw their power and influence. And both sides will forever bicker over the means and methods used to govern regulation and NEVER the regulation itself.

You're running in place.

Huh? What is your basis for this supposition? Without a "non-partisan" Central Banking System, this country would run amok every few years.

This is not a supposition, my friend. It's a fact. Where did the money come from to enable all of this lending? Did Barney Frank create it? No. Did George Bush create it? No? The answer is bannered along the top of every dollar. The Federal Reserve.

We need no quasi-governmental agency to manipulate the supply and value of our money. We run amok because of such agencies. It's called the inflationary business cycle.

[William33 110]

What caused this debacle is our Federal Reserve System. This counterfeiting business was constructed by a Republican, then refined and enacted into law by Democrats. A "reach across the table" bipartisan rape of our wealth.

Both parties are for bigger government, and more regulation. For that is where they draw their power and influence. And both sides will forever bicker over the means and methods used to govern regulation and NEVER the regulation itself.

You're running in place.

Huh? What is your basis for this supposition? Without a "non-partisan" Central Banking System, this country would run amok every few years.

This is not a supposition, my friend. It's a fact. Where did the money come from to enable all of this lending? Did Barney Frank create it? No. Did George Bush create it? No? The answer is bannered along the top of every dollar. The Federal Reserve.

We need no quasi-governmental agency to manipulate the supply and value of our money. We run amok because of such agencies. It's called the inflationary business cycle.

Incorrect. The money is US Treasury money, our tax money. The Fed also supervises and regulates Banks, process 90% of ACH transactions (like your direct deposit paycheck), checks, distribute US currency for the Bureau of printing and Engraving and a whole host of other services. The Fed, through the Federal Open Market Committee (FOMC), regulates the prime rate, to balance the economy.

Who would you suggest is best suited for this work?

[cmartyn 0]

Fractional reserve banking creates money out of thin air all by itself. Only the capitol reserve requirements along with prudent lending practices and faith keep the dollar alive. The dollar is what it is cause you have to pay your taxes in it or they will put you in jail.

[웃 910]

Unfortunately, this letter, which is proof the GOP spotted the problem 2 years 4 months before Fannie and Freddie collapsed (May 2006), was not brought to the floor to debate because not one democrat was in support of more regulation, apparently they couldn't see the extreme disaster in the making:

May 5, 2006

We are concerned that if REGULATORY REFORM LEGISLATION for the housing-finance government sponsored enterprises (GSEs) IS NOT ENACTED THIS YEAR, AMERICAN TAXPAYERS will continue to be EXPOSED TO THE ENORMOUS RISK that FANNIE and FREDDIE MAC pose to the housing market, the overall financial system, and the economy as a whole......With the fiscal challenges facing us today (deficits, entitlements, pensions and flood insurance), Congress must ask itself who would actually pay this debt if Fannie or Freddie could not? .....It is vitally important that Congress take the necessary steps to ensure that these institutions benefit from strong and independent regulatory supervision, operate in a safe and sound manner, and are primarily focused on their statutory mission. More importantly, Congress must ensure that the American taxpayer is protected in the event either GSE should fail.

Video from 2004 showing Republican Congressional leaders very concerned about Fannie/Freddie and the democrats thinking everything is fine and dandy:

Edited December 10, 2008 by Confucian

[William33 110]

Fractional reserve banking creates money out of thin air all by itself. Only the capitol reserve requirements along with prudent lending practices and faith keep the dollar alive. The dollar is what it is cause you have to pay your taxes in it or they will put you in jail.

That is the fundamental principle of banking. Without this practice, banks would not be able to loan out money, pay interest on accounts or make money in any other way. They would become insolvent immediately. Thus, the fractional reserve banking principle was created. The Federal Reserve will back these banks, to prevent "bank runs" as occurred in 1929.

[mRx 16]

What caused this debacle is our Federal Reserve System. This counterfeiting business was constructed by a Republican, then refined and enacted into law by Democrats. A "reach across the table" bipartisan rape of our wealth.

Both parties are for bigger government, and more regulation. For that is where they draw their power and influence. And both sides will forever bicker over the means and methods used to govern regulation and NEVER the regulation itself.

You're running in place.

Huh? What is your basis for this supposition? Without a "non-partisan" Central Banking System, this country would run amok every few years.

This is not a supposition, my friend. It's a fact. Where did the money come from to enable all of this lending? Did Barney Frank create it? No. Did George Bush create it? No? The answer is bannered along the top of every dollar. The Federal Reserve.

We need no quasi-governmental agency to manipulate the supply and value of our money. We run amok because of such agencies. It's called the inflationary business cycle.

Incorrect. The money is US Treasury money, our tax money. The Fed also supervises and regulates Banks, process 90% of ACH transactions (like your direct deposit paycheck), checks, distribute US currency for the Bureau of printing and Engraving and a whole host of other services. The Fed, through the Federal Open Market Committee (FOMC), regulates the prime rate, to balance the economy.

Who would you suggest is best suited for this work?

It is not US treasury money. Those were called greenbacks and continentals. But nevertheless, the end result is still the same: regulation, whether by the Federal Reserve (present) or by the Treasury (past). So who does it, is irrelevant. The question is why do we need it?

We don't.

All the Federal Reserve can do is print more money, making the money you work for worth less. That is their purpose. They can manipulate lending through determine interest rates and who can borrow, (we've learned of the negative outcome of this: subprime lending)

So what good do they do? If the fed is so great, why couldn't they stop this? Why do we go through countless recessions, depressions, and downturns?

heh, because they are the cause of our very problem.

[SpiritAlight 1]

Politicians are puppets.

Do you think it matters what colours they wear?

When it comes to power it is and will always be $$$...yes, money.

And guess who is holding the purse strings:

The Fed.

And they are not "federal" nor are they government.

This unelected bunch are simply smart capitalists that own a corporation that prints money,

lends it to the U.S. government (hence the people),

and gets paid interest (your income tax dollars hard at work).

In the end we are all just wishing for the least damage to be done;

to the country,

to other countries,

to the environment (animals, plants, the oceans, our air, etc.)

etc.

There.

Did that sound a little too cynical?

Let us not remain silly* (in this way) and wake up and smell reality.

No one person can save this country nor the world.

It is going to take us all.

One person did inspire a whole bunch though...and no one can deny that.

We might have gotten a tiny bit of momentum; let's keep things going.

*Be silly in other, fun, ways.

[mRx 16]

Fractional reserve banking creates money out of thin air all by itself. Only the capitol reserve requirements along with prudent lending practices and faith keep the dollar alive. The dollar is what it is cause you have to pay your taxes in it or they will put you in jail.

That is the fundamental principle of banking. Without this practice, banks would not be able to loan out money, pay interest on accounts or make money in any other way. They would become insolvent immediately. Thus, the fractional reserve banking principle was created. The Federal Reserve will back these banks, to prevent "bank runs" as occurred in 1929.

The Federal Reserve and their FDIC act, has ensured that all banks can inflate together without fear. Without such regulation, a bank that inflated out of it's means, would go bankrupt. The result would be a banking system more attuned to the actual real world market. This cannot be allowed with current policies.

William, you're a smart man. Snap out of those Keynesian policies. They are flawed.