Posts Tagged ‘Fannie Mae’
Posted by Larry Doyle on December 28th, 2009 8:38 AM |
I remain incensed at the sheer arrogance and brazen demeanor of the Obama administration providing a blank check on Christmas Eve to cover future losses of the failed institutions Fannie Mae and Freddie Mac. Given the fact that this check has been issued, America deserves to know what exactly it is covering. Over and above a full and total exposition of these government sponsored entities, America is in a position to demand certain retributions. Let’s bang the drum and demand some answers, including:
1. The current valuations of all of Freddie’s and Fannie’s holdings so America can fully evaluate those holdings relative to market prices.
2. The current fees being paid for all services rendered.
3. An independent audit.
4. Why aren’t these stocks delisted immediately? To allow stock in these entities to continue to trade is a total mockery of a legitimate market.
5. Clawback all bonus payments rendered to Franklin Raines, James Johnson, and Leland Brendsel, the executives at Fannie and Freddie who truly plundered these institutions. (more…)
Tags: delist fannie and freddie, fannie and freddie stock, Fannie and freddie's blank check, Fannie and freddie's contingency liabilities to Wall Street, Fannie and freddie's portfolio holdings, Fannie Mae, Fannie Mae and freddie Mac future, Franklin Raines, Freddie Mac, hat is fueling america's rage, James johnson, Leland Brendsel, socialized housing, w
Posted in Fannie Mae, Freddie Mac, General | 8 Comments »
Posted by Larry Doyle on December 26th, 2009 11:14 AM |
While Americans across the country hustled and bustled for last minute gifts and holiday preparations, our wizards in Washington tied a big red ribbon on a blank check made out to Freddie Mac and Fannie Mae. In the process, a future of socialized housing finance has been increasingly solidified.
Why would the Obama administration pass this blank check under the cover of darkness on December 24th? In hopes that America had just settled down for its long winter’s nap and would miss this act of pillage and plunder. The Wall Street Journal highlights this ‘blank check’ in writing, U.S. Move to Cover Fannie, Freddie Losses Stirs Controversy:
The Obama administration’s decision to cover an unlimited amount of losses at the mortgage-finance giants Fannie Mae and Freddie Mac over the next three years stirred controversy over the holiday.
The Treasury announced Thursday it was removing the caps that limited the amount of available capital to the companies to $200 billion each. (more…)
Tags: bailout funds for Fannie and Freddie, Barack Obama, blank check for Fannie and Freddie al, Chris Dodd, Fannie Mae, fannie's future, Freddie Mac, freddie's future, freddie's outlook, future for freddie mac and fannie mae, homeowner defaults and foreclosures, housing finance, housing losses, John Kerry, losses at Fannie and Freddie, Mortgage Crisis, socialized housing, Treasury gives blank check to Fannie and Freddie, U.S. Moves to Cover Fannie Freddie Losses Stirs Controversy
Posted in General | 3 Comments »
Posted by Larry Doyle on December 2nd, 2009 11:09 AM |
When will those charged with spending taxpayer money treat associated responsibilities with the seriousness they deserve? Indiscriminately and wastefully allocating taxpayer funds is not merely a question of competence but, in my opinion, a question of patriotism.
The Obama administration’s support of our nation’s housing market has been overwhelming. Taxpayer funds have been directed towards Freddie, Fannie, the FHA (Federal Housing Administration), and a wide number of banks. Although government spending and waste go hand in hand, the American taxpayer deserves so much better.
With the recent news that the FHA insurance fund is depleted, now the FHA decides to tighten standards. Spend money first, ask questions later? Where and when will this madness end? A recent release from the Federal Register/Department of Housing and Urban Development highlights new initiatives by Housing and Urban Development (HUD) which oversees the FHA. The FHA Summary reads as follows: (more…)
Tags: accountability and competence in Washington, correspondent mortgage brokers, Fannie Mae, Federal Register and HUD, FHA dealing with entities of integrity, FHA insurance fund, FHA new initiatives, FHA standards, Freddie Mac, Helping Families Save Their Homes Act of 2009, housing, Housing Crisis, Obama housing programs, rogue mortgage brokers
Posted in FHA, General | 1 Comment »
Posted by Larry Doyle on November 18th, 2009 9:35 AM |
Do you have any confidence that Washington even knows how to properly address our massive and growing fiscal deficit? Rahm Emanuel, Tim Geithner and others understand that from a political standpoint they need to start talking about deficit control, but will that talk lead to action?
Do you think Congressional leaders, specifically Harry Reid and Nancy Pelosi, have the character and fortitude to ‘tighten the belt?’
The first real test for this crowd is already upon us. How so? The TARP, with a $700 billion commitment, expires on December 31, 2009. Of that $700 billion, $400 billion has actually been spent. Why wasn’t the other $300 billion spent? Well, don’t forget that Obama’s Stimulus Bill totaled $770 billion and assorted other programs implemented by Treasury have run into the trillions. As a result, Geithner did not immediately need to allocate those funds.
The question begs as to what will happen to that $300 billion. While Emanuel and Geithner are starting to ‘talk’ the fiscal discipline ‘talk,’ will they ‘walk the walk?’ (more…)
Tags: allocating TARP funds, Deficit, deficit control, Fannie Mae, FDIC, FHA, fiscal discipline, Freddie Mac, GMAC, Harry Reid, insurance companies, Nancy Pelosi, Rahm Emanuel, richard trumka, Senator John Thune, stimulus bill, talk of fiscal deficit, TARP, TARP funds, TARP renewal, Treasury, walking around money
Posted in Deficit, General, Tim Geithner | 3 Comments »
Posted by Larry Doyle on May 28th, 2009 4:21 PM |
Can our economy absorb another financial hit of the magnitude of Freddie Mac and Fannie Mae?
In the process of digging for some data on Uncle Sam’s TARP commitments, I came across a compelling story at Subsidyscope, a Financial Primer (right sidebar) link here at Sense on Cents. The lead story at Subsidyscope, dated May 26, 2009: Concerns Grow Over Federal Home Loan Bank Investments. They write:
The Federal Home Loan Banks, or FHLBs, may be the biggest financial players you’ve never heard of. Collectively, they hold $1.3 trillion in assets and are the largest U.S. borrower after the federal government.
For readers here at Sense on Cents, I have raised warnings about the FHLB system both on April 3rd (Putting Perfume on a Pig!!) and just this past Monday, May 25th (FHLBs: Red Sea, Dead Sea, or Both?). In my opinion, there is little doubt that the FHLB system was the greatest beneficiary of the FASB’s relaxation of the mark-to-market. Subsidyscope says as much:
A Subsidyscope review of the FHLBs’ financial statements has found that several of the banks are carrying substantial “unrealized losses” on their investments in mortgage-backed securities. Because the banks believe these losses are temporary, they don’t have to be recognized on the banks’ accounting statements.
What’s potentially worrisome is the sheer size of the losses. For the Federal Home Loan Bank of Seattle, they are substantially larger than the capital the bank holds to protect itself against such declines. If its mortgage-backed securities don’t regain their value, the bank will have to write them down, which could wipe out its capital buffer and raise risks for taxpayers.
Remind you of Freddie Mac and Fannie Mae? I thought so. Let’s continue to dig even deeper. Subsidyscope asserts: (more…)
Tags: capital base of FHLBs, Fannie Mae, FASB relaxation of mark to market, Federal Home Loan Bank investments, Federal Home Loan Loan banks, FHLB, FHLB Boston, FHLB capital requirements, FHLB financial statements, FHLB investments, FHLB investments in mortgages, FHLB losses, FHLB San Francisco, FHLB Seattle, FHLB Seattle may be broke, FHLMC, FNMA, Freddie Mac, growing losses in Federal Home Loan Banks, growing losses in FHLB banks, housing, impending losses in FHLB banks, impending losses in FHLB system, increasing losses in Federal Home Loan Banks, investment losses in Federal Home Loan Banks, is FHLB Seattle broke?, largest borrower after government, losses adn more losses in Federal Home Loan Banks, losses increasing in FHLB banksin, mortgage losses in Federal Home Loan Banks, Sense on Cents, size of losses within FHLBs, sub-prime losses in FHLB system, Subsidyscope, taxpayer risks with FHLBs
Posted in Federal Home Loan Banks, General | No Comments »
Posted by Larry Doyle on May 25th, 2009 8:46 AM |
On April 2nd, in a post Putting Perfume on a Pig, I compared Freddie Mac, Fannie Mae, and the Federal Home Loan Bank system to the Red Sea. Why? For the very simple reason that for the foreseeable future, these entities will accrue losses. How? Unlike commercial banks, Freddie, Fannie, and their 12 FHLBs have very little earnings power in this environment while faced with a steady stream of losses on their mortgage holdings given ongoing defaults and foreclosures.
In retrospect, would it have been more appropriate to compare the FHLB system to the Dead Sea than the Red Sea? I think it may. As the Wall Street Journal highlights, Directors Are Faulted at Home Loan Banks:
Financial troubles at some of the Federal Home Loan Banks are raising questions about how well directors of these institutions are supervising their executives.
A plunge in the value of mortgage securities bought by several of the regional home-loan banks has forced them to halt dividends and curtail funding for local housing projects. An annual report issued by the banks’ regulator this past week says some of them “paid insufficient attention” to credit risks and haven’t invested enough in information technology.
Unlike giant banks or government-backed mortgage companies Fannie Mae and Freddie Mac, the 12 regional home-loan banks draw little public scrutiny. (LD’s emphasis) Created by Congress in 1932 to support the housing market, they are cooperatives owned by more than 8,000 banks, thrifts, credit unions and insurers.
Why do these home loan banks draw such little public scrutiny? They are the wholesale entity (providing funds) to their retail network (banks, thrifts, credit unions, insurers) which deals with the public. With no interaction with the public, the media and market analysts have accorded them little coverage. Thus, I make the assertion that these banks truly are a combination of both the Red Sea (ongoing losses) and Dead Sea (no coverage). (more…)
Tags: and the FHLBs, Charles Bowsher, coverage of FHLBs, credit unions, Fannie Mae, Federal Home Loan Bank debt, Federal Home Loan Bank losses, Federal Home Loan Bank Office of Finance, Federal Home Loan Banks, FHLB and relaxation of mark to market accounting, FHLB estimated losses, FHLBs, Freddie Mac, loans from FHLBs, Office of Finance FHLB, portfolios of FHLBs, relationships of FHLBs to banks, thrifts
Posted in Federal Home Loan Banks, General | 6 Comments »
Posted by Larry Doyle on April 26th, 2009 9:04 AM |
Barney Frank may try to rewrite his Congressional record on housing finance, but he will forever be linked to supporting the activities of Freddie Mac and Fannie Mae which drove irresponsible sub-prime lending. A review of a WSJ article, What They Said About Fan and Fred, is truly damning. I strongly recommend your reading it. Who can ever forget back in 2003 Barney Frank stating in Congressional testimony addressing Freddie and Fannie specifically and housing finance:
House Financial Services Committee hearing, Sept. 10, 2003:
Rep. Barney Frank (D., Mass.): I worry, frankly, that there’s a tension here. The more people, in my judgment, exaggerate a threat of safety and soundness, the more people conjure up the possibility of serious financial losses to the Treasury, which I do not see. I think we see entities that are fundamentally sound financially and withstand some of the disaster scenarios. . . .
Tension? Threat of safety and soundness? Financial losses? Fundamentally sound? Disaster scenarios? With a “watchdog” like Barney is there really any surprise how and why Freddie and Fannie were plundered by their own executives and the sub-prime lending industry? It is not a stretch in stating that Barney had the welcome mat out and held the door open.
I am not stating that Barney was directly complicit in the fraudulent sub-prime lending, but he certainly defines naivete and incompetence on this front. His Democratic sidekicks – Dodd, Schumer, and Waters -were complicit and also drinking from the same punch bowl.
What about Barney’s comment regarding oversight of Freddie and Fannie:
House Financial Services Committee hearing, Sept. 25, 2003:
Rep. Frank: I do think I do not want the same kind of focus on safety and soundness that we have in OCC [Office of the Comptroller of the Currency] and OTS [Office of Thrift Supervision]. I want to roll the dice a little bit more in this situation towards subsidized housing. . . .
Again in 2005, Barney continued to stand his ground on the housing front despite rampant signs at that point of irresponsible lending and incipient fraud:
Well now that Barney and our entire country have “crapped out” on his roll of the dice, Barney decides homeownership may not be the best thing for all concerned. In a height of pandering well beyond the Washington norm, Barney offers the following in this excerpt from an interview on the Tavis Smiley show on PBS on April 20, 2009:
Is there any doubt that the burgeoning wind power industry in our country should engage Barney as their spokesperson? In so doing, Barney’s hot air may actually become a source of revenue for our great country rather than such an enormous expense.
Barney’s hot air should come with a warning, though, “Don’t Be Downwind!!”
LD
Tags: Barney Frank, Chris Dodd, Chuck Schumer, Congressional testimony on homeownership, Fannie Mae, Freddie Mac, Maxine Waters, oversight of Freddie Mac and Fannie Mae, sub-prime lending
Posted in Barney Frank, General | 1 Comment »
Posted by Larry Doyle on April 24th, 2009 11:26 AM |
While there is tremendous focus on the Bank Stress Tests, there remains limited focus overall on the centerpieces of our domestic housing finance industry. I am talking about Freddie Mac, Fannie Mae, and the Federal Home Loan Banks. Some have categorized these institutions as “black holes.” I believe a more appropriate designation would be The Red Sea as these institutions are awash in losses and continue to bleed money.
We may never know the circumstances surrounding the death of acting Freddie Mac CFO, David Kellerman, but there is a lot of focus by government officials on these institutions. There has been much less focus by private analysts. To that end, I am most grateful to Bloomberg’s David Reilly for reporting on Fannie Mae Creates Housing Mirage With Bum Loans.
Effectively, Fannie Mae is giving funds away to very high credit risk individuals who would have otherwise most likely already defaulted on their mortgages. As Reilly reports:
Give money away. That was a solution to the housing crisis mortgage giant Fannie Mae hit on last year.
Faced with growing numbers of homeowners unable to make mortgage payments, Fannie decided to fund loans to borrowers that were instant losers.
The point was to buy time. Even though those loans resulted in a $453 million loss, they helped keep troubled homeowners from defaulting. That meant Fannie for now didn’t have to make good on loan guarantees that may have cost it as much as $2.4 billion.
Make no mistake, this Fannie Mae program was also being utilized by Freddie Mac. Reports have come out that Freddie Mac’s Kellerman was pressured by Freddie’s accountants to improperly report their financials. In a similar vein, Fannie is playing another version of the “shell game” in order to buy time and forestall losses. (more…)
Tags: Bank Stress Tests, Bloomberg's David Reilly, Fannie Mae, Federal Home Loan Banks, financial shell games, Freddie Mac, losses on second liens, PPIP, TALF, TARP
Posted in Bank Stress Test, Banking Institutions, Fannie Mae, Freddie Mac, General | No Comments »
Posted by Larry Doyle on April 21st, 2009 1:14 PM |
How does our economy and country move forward after having experienced rampant abuses throughout our financial industry? It is disheartening that we have not already seen an aggressive pursuit and prosecution of many involved in these financial improprieties. Bloomberg releases a story today indicating House Speaker Pelosi Wall Street Probe Modeled on Pecora After Wall Street Crash.
While a thorough investigation is critically important to improve the health and well being of our markets and economy, I would propose we employ an independent investigation. Why?
Our financial industry is intertwined with the regulatory and political oversight which is supposed to monitor it. If we employ a currently sitting legislative body to investigate Wall Street, can or will we receive a truly unbiased analysis? Do we recall Franklin Raines of Fannie Mae being questioned by members of Congress who had received significant campaign contributions from Fannie? The “investigation” of Freddie and Fannie was certainly more theatre than true investigation. Will we get the same with Ms. Pelosi’s probe? Bloomberg offers:
House Speaker Nancy Pelosi plans to push for a comprehensive inquiry, saying that three-quarters of Americans want to know what led to the bankruptcy of Lehman Brothers Holdings Inc. and the collapse of Bear Stearns Cos. and Merrill Lynch & Co. She favors one patterned after Senate Banking Committee hearings led by Ferdinand Pecora starting in 1933, according to her spokesman, Nadeam Elshami.
The Pecora review “was probably the single most important congressional investigation in the history of our country, except perhaps the Watergate hearings,” Donald Ritchie, associate historian for the U.S. Senate, said in an interview. (more…)
Tags: Auction Rate Securities, bankruptcy of Lehman, Barney Frank, campaign contributions by Wall Street, Center for Responsive Politics, Charles Geisst, Chris Dodd, Chuck Hagel, collapse of Bear Stearns, Donald Ritchie, Fannie Mae, FINRA, FINRA's investment portfolio, Franklin Raines, Freddie Mac, historian of U.S. Senate, independent investigation of Wall Street, Legalized Bribery, Leon Panetta, Mary Schapiro, Pecora investigation, SEC, SRO, Wall Street, Wall Street oversight, William Black
Posted in Banking Institutions, Barney Frank, Congress, FINRA, Franklin Raines, Freddie Mac, General, Government funds, Wall Street | 5 Comments »
Posted by Larry Doyle on April 13th, 2009 11:05 AM |
The best organizations are managed not only for today but for tomorrow. What do I mean by that? Great organizations assess risks, develop talent, diversify products, and grow market share. Aside from those basic business tenets, the best organizations respond well in times of crisis.
Every business and organization is ultimately a reflection of its people. To that end, the depth and quality of the people are the single greatest factors in the long term success of the organization.
Any individual or organization would relish developing a system that generates untold success and then automates the process. Neither business nor life works that way. Change is constant. How organizations proactively stay ahead of change and respond to change is paramount in succeeding in business and life.
The best sports organizations have developed a deep bench of talent both on and off the field. When players or executives leave – as they always do – the general manager moves another body in and the team does not miss a beat. The same scenario occurs in the best companies. This transition process is part of the culture of the organization. (more…)
Tags: AIG, Chrysler, Citigroup management changes, Fannie Mae, Freddie Mac, GM, Management Changes at banks, Moral Hazard, Tim Geithner, Toxic Assets
Posted in General, Moral Hazard, Toxic Assets | 4 Comments »
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