Barney Frank

[watermock]

Frank Taunts GOP On Fannie And Freddie
By Daniel W. Reilly

Oct 21, 2008
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(The Politico) Never one to let an accusation go unanswered, Rep. Barney Frank responded Tuesday afternoon to allegations that he and other Democrats are afraid to investigate improprieties at Fannie Mae and Freddie Mac.

House Republicans are calling for a Justice Department probe into the matter, alleging that Democrats are unwilling to take on the mortgage giants.

Frank said that only when Democrats took control of Congress in 2006 did any serious attempts at regulation of Fannie and Freddie begin, after years of neglect by Republicans.

“In an unusual event, even by this year’s standards, House Republicans appear to be demanding a criminal investigation of their failure to legislate,” said Frank in a statement.

“The Republican demand that their legislative record of non-action be investigated appears to be the political equivalent of the note left to the police by serial offenders: stop me before I do not legislate again.”

[Needa Pass Rush]

Here ya go, Mock. I'll bump it for you. Does the "pissed off" brutha in this vid sound just like LABF?

[L.A. BRONCOS FAN]

Needa Pass Rush with the word from McBush's base.

[spdirty]

Originally Posted by L.A. BRONCOS FAN

Needa Pass Rush with the word from McBush's base.

and LABF with his typical "I cant form a cohesive response so I will throw stupid ass insults against the wall and hope something sticks" response.

[L.A. BRONCOS FAN]

Originally Posted by spdirty

and LABF with his typical "I cant form a cohesive response so I will throw stupid ass insults against the wall and hope something sticks" response.

Sorry - next time I'll try to provide a more "cohesive response" to your race-baiting and scapegoating tactics.

[watermock]

This is partisan but further explains the crisis..at least with fannie mae. AIG is a whole nother monster with the credit defaut swaps.

[L.A. BRONCOS FAN]

Private sector loans, not Fannie or Freddie, triggered crisis

---

By David Goldstein and Kevin G. Hall | McClatchy Newspapers

WASHINGTON — As the economy worsens and Election Day approaches, a conservative campaign that blames the global financial crisis on a government push to make housing more affordable to lower-class Americans has taken off on talk radio and e-mail.

Commentators say that's what triggered the stock market meltdown and the freeze on credit. They've specifically targeted the mortgage finance giants Fannie Mae and Freddie Mac, which the federal government seized on Sept. 6, contending that lending to poor and minority Americans caused Fannie's and Freddie's financial problems.

Federal housing data reveal that the charges aren't true, and that the private sector, not the government or government-backed companies, was behind the soaring subprime lending at the core of the crisis.

Subprime lending offered high-cost loans to the weakest borrowers during the housing boom that lasted from 2001 to 2007. Subprime lending was at its height from 2004 to 2006.

Federal Reserve Board data show that:

_ More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions.

_ Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.

_ Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that's being lambasted by conservative critics.

The "turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007," the President's Working Group on Financial Markets reported Friday.

Conservative critics claim that the Clinton administration pushed Fannie Mae and Freddie Mac to make home ownership more available to riskier borrowers with little concern for their ability to pay the mortgages.

"I don't remember a clarion call that said Fannie and Freddie are a disaster. Loaning to minorities and risky folks is a disaster," said Neil Cavuto of Fox News.

Fannie, the Federal National Mortgage Association, and Freddie, the Federal Home Loan Mortgage Corp., don't lend money, to minorities or anyone else, however. They purchase loans from the private lenders who actually underwrite the loans.

It's a process called securitization, and by passing on the loans, banks have more capital on hand so they can lend even more.

This much is true. In an effort to promote affordable home ownership for minorities and rural whites, the Department of Housing and Urban Development set targets for Fannie and Freddie in 1992 to purchase low-income loans for sale into the secondary market that eventually reached this number: 52 percent of loans given to low-to moderate-income families.

To be sure, encouraging lower-income Americans to become homeowners gave unsophisticated borrowers and unscrupulous lenders and mortgage brokers more chances to turn dreams of homeownership in nightmares.

But these loans, and those to low- and moderate-income families represent a small portion of overall lending. And at the height of the housing boom in 2005 and 2006, Republicans and their party's standard bearer, President Bush, didn't criticize any sort of lending, frequently boasting that they were presiding over the highest-ever rates of U.S. homeownership.

Between 2004 and 2006, when subprime lending was exploding, Fannie and Freddie went from holding a high of 48 percent of the subprime loans that were sold into the secondary market to holding about 24 percent, according to data from Inside Mortgage Finance, a specialty publication. One reason is that Fannie and Freddie were subject to tougher standards than many of the unregulated players in the private sector who weakened lending standards, most of whom have gone bankrupt or are now in deep trouble.

During those same explosive three years, private investment banks — not Fannie and Freddie — dominated the mortgage loans that were packaged and sold into the secondary mortgage market. In 2005 and 2006, the private sector securitized almost two thirds of all U.S. mortgages, supplanting Fannie and Freddie, according to a number of specialty publications that track this data.

In 1999, the year many critics charge that the Clinton administration pressured Fannie and Freddie, the private sector sold into the secondary market just 18 percent of all mortgages.

Fueled by low interest rates and cheap credit, home prices between 2001 and 2007 galloped beyond anything ever seen, and that fueled demand for mortgage-backed securities, the technical term for mortgages that are sold to a company, usually an investment bank, which then pools and sells them into the secondary mortgage market.

About 70 percent of all U.S. mortgages are in this secondary mortgage market, according to the Federal Reserve.

Conservative critics also blame the subprime lending mess on the Community Reinvestment Act, a 31-year-old law aimed at freeing credit for underserved neighborhoods.

Congress created the CRA in 1977 to reverse years of redlining and other restrictive banking practices that locked the poor, and especially minorities, out of homeownership and the tax breaks and wealth creation it affords. The CRA requires federally regulated and insured financial institutions to show that they're lending and investing in their communities.

Conservative columnist Charles Krauthammer wrote recently that while the goal of the CRA was admirable, "it led to tremendous pressure on Fannie Mae and Freddie Mac — who in turn pressured banks and other lenders — to extend mortgages to people who were borrowing over their heads. That's called subprime lending. It lies at the root of our current calamity."

Fannie and Freddie, however, didn't pressure lenders to sell them more loans; they struggled to keep pace with their private sector competitors. In fact, their regulator, the Office of Federal Housing Enterprise Oversight, imposed new restrictions in 2006 that led to Fannie and Freddie losing even more market share in the booming subprime market.

What's more, only commercial banks and thrifts must follow CRA rules. The investment banks don't, nor did the now-bankrupt non-bank lenders such as New Century Financial Corp. and Ameriquest that underwrote most of the subprime loans.

These private non-bank lenders enjoyed a regulatory gap, allowing them to be regulated by 50 different state banking supervisors instead of the federal government. And mortgage brokers, who also weren't subject to federal regulation or the CRA, originated most of the subprime loans.

In a speech last March, Janet Yellen, the president of the Federal Reserve Bank of San Francisco, debunked the notion that the push for affordable housing created today's problems.

"Most of the loans made by depository institutions examined under the CRA have not been higher-priced loans," she said. "The CRA has increased the volume of responsible lending to low- and moderate-income households."

In a book on the sub-prime lending collapse published in June 2007, the late Federal Reserve Governor Ed Gramlich wrote that only one-third of all CRA loans had interest rates high enough to be considered sub-prime and that to the pleasant surprise of commercial banks there were low default rates. Banks that participated in CRA lending had found, he wrote, "that this new lending is good business."

http://www.mcclatchydc.com/251/story/53802.html

[L.A. BRONCOS FAN]

Bush Admin Was Warned Re: Looming Mortgage Crisis Four Years Ago

---

NEW YORK (Reuters) – The FBI, after years spent focusing on national security, is struggling to find agents and resources to investigate wrongdoing tied to the country's economic crisis, The New York Times reported in Sunday editions.

Citing current and former FBI officials, the Times said cutbacks in its criminal investigative workforce following the September 11 attacks left the FBI weaker in areas like white collar crime.

The cutbacks were the result of a shift in focus to terrorism and intelligence matters. More than 1,800 agents, or nearly one-third of all those in criminal programs, moved into those areas, the Times said.

"Clearly, we have felt the effects of moving resources from criminal investigations to national security," the newspaper quoted FBI Assistant Director John Miller as saying. "In white collar crime, while we initiated fewer cases over all, we targeted the areas where we could have the biggest impact. We focused on multimillion-dollar corporate fraud, where we could make arrests but also recover money for the fraud victims."

While the FBI plans to double the number of agents working on financial crimes, people within and outside the Justice Department question where the agents will come from and whether that will suffice, the Times said.

Records and interviews show that FBI officials have warned of a looming mortgage threat since 2004, and asked the Bush administration to fund such nonterrorism investigations, but the requests were denied and no new agents were approved for financial criminal investigation work, the newspaper said.

Internal FBI data shows the cutbacks were especially sharp in areas of white collar crime like mortgage fraud, with more than 600 agents lost, or more than one-third of 2001 levels.

According to Justice Department data, fraud prosecutions directed at financial institutions dropped by nearly one-half from 2000 to 2007, insurance fraud cases fell 75 percent and securities fraud decreased by 17 percent, the Times said.

"The administration's top priority since the 9/11 attacks has been counterterrorism," Justice Department spokesman Peter Carr told the paper. "In part, that's reflected by a significant investment of resources at the FBI to answer the call from Congress and the American public to become a domestic intelligence agency, in addition to a law enforcement agency."

According to the Times, several former law enforcement officials said that senior administration officials, notably those at the White House and the Treasury Department, made clear that they were concerned the Justice Department and the FBI were taking an anti-business attitude that could inhibit corporate risk-taking.

One former official said some in the administration characterized aggressive corporate prosecutions as "over-deterrence."

http://news.yahoo.com/s/nm/20081018/..._fbi_resources

[watermock]

It's a process called securitization, and by passing on the loans, banks have more capital on hand so they can lend even more.

Yes, they sell the loans to freddie mac. Rinse and repeat. DUH!

As far as the agents were repositioned to concentrate on homeland security, The evidence was really clear how it was a house of cards allready, thats why they introduced legislation. That was blocked.

[L.A. BRONCOS FAN]

"But these loans, and those to low- and moderate-income families represent a small portion of overall lending. And at the height of the housing boom in 2005 and 2006, Republicans and their party's standard bearer, President Bush, didn't criticize any sort of lending, frequently boasting that they were presiding over the highest-ever rates of U.S. homeownership.

Between 2004 and 2006, when subprime lending was exploding, Fannie and Freddie went from holding a high of 48 percent of the subprime loans that were sold into the secondary market to holding about 24 percent, according to data from Inside Mortgage Finance, a specialty publication. One reason is that Fannie and Freddie were subject to tougher standards than many of the unregulated players in the private sector who weakened lending standards, most of whom have gone bankrupt or are now in deep trouble.

During those same explosive three years, private investment banks — not Fannie and Freddie — dominated the mortgage loans that were packaged and sold into the secondary mortgage market. In 2005 and 2006, the private sector securitized almost two thirds of all U.S. mortgages, supplanting Fannie and Freddie, according to a number of specialty publications that track this data.

In 1999, the year many critics charge that the Clinton administration pressured Fannie and Freddie, the private sector sold into the secondary market just 18 percent of all mortgages."

[watermock]

Which were under "insured" by the scam called Credit default swaps. Only they really WEREN'T INSURED AT ALL.

FINANCIAL FIRMS THEN TRIED TO PACKAGE SAID DEBT TO THE NEXT SUCKER, likely forien governments flush with petrodollars, but they paused.

So taxpayers are left holding the bags of worthless paper. 5 trillion is conservative.

[Garcia Bronco]

"Fannie, the Federal National Mortgage Association, and Freddie, the Federal Home Loan Mortgage Corp., don't lend money, to minorities or anyone else, however. They purchase loans from the private lenders who actually underwrite the loans."

And because these quasi government agencies were buying these loans because of laws perpetuated by Democrats the Banks didn't care if the borrower was solvent. It's right there in your own article. This does not let the banks off the hook, however, the FM's are very much to blame and the democrats repeatedly blocked regulation into the "companies"

[L.A. BRONCOS FAN]

Originally Posted by Garcia Bronco

"Fannie, the Federal National Mortgage Association, and Freddie, the Federal Home Loan Mortgage Corp., don't lend money, to minorities or anyone else, however. They purchase loans from the private lenders who actually underwrite the loans."

And because these quasi government agencies were buying these loans because of laws perpetuated by Democrats the Banks didn't care if the borrower was solvent. It's right there in your own article. This does not let the banks off the hook, however, the FM's are very much to blame and the democrats repeatedly blocked regulation into the "companies"

But these loans, and those to low- and moderate-income families represent a small portion of overall lending. And at the height of the housing boom in 2005 and 2006, Republicans and their party's standard bearer, President Bush, didn't criticize any sort of lending, frequently boasting that they were presiding over the highest-ever rates of U.S. homeownership.

.

[Needa Pass Rush]

Originally Posted by watermock

Which were under "insured" by the scam called Credit default swaps. Only they really WEREN'T INSURED AT ALL.

FINANCIAL FIRMS THEN TRIED TO PACKAGE SAID DEBT TO THE NEXT SUCKER, likely forien governments flush with petrodollars, but they paused.

So taxpayers are left holding the bags of worthless paper. 5 trillion is conservative.

This one made it's way around Wall St about a year ago. Someone set it to music on youtube.

[watermock]

[barryr]

Frank is as guilty, if not more than anyone of this sham to let go on and he did nothing. He's a phony and really anyone who apologizes for this idiot is stupid. The only reason this dullard is still in Congress is because he's a gay democrat. He's done very little of substance in his years and any republican would have been forced to resign that had a gay lover selling drugs and sex out of his house like Frank did. Very comical to believe this guy gives a rat's behind about any of us other than potential voters to keep his sorry butt in office.

[Needa Pass Rush]

Originally Posted by watermock

The news media have covered the relationship in the past, but there have been no mentions since 2005, according to Nexis and despite the collapse of Fannie Mae. The July 3, 1998, Reliable Source column in The Washington Post reported Frank, who is openly gay, had a relationship with Herb Moses, an executive for the now-government controlled Fannie Mae. The column revealed the two had split up at the time but also said Frank was referring to Moses as his “spouse.” Another Washington Post report said Frank called Moses his “lover” and that the two were “still friends” after the breakup.

It's no secret that Moses and Frank lived together for many years. During those years Moses was the Director of Product Initiatives at Fannie. Those boys must have loved talking about 'fannie' product during pillow talk time.