Regulators are nearing a settlement with Fannie Mae and Freddie Mac over whether the mortgage finance giants adequately disclosed their exposure to risky subprime loans, bringing to a close a three-year investigation.
The proposed agreement with the Securities and Exchange Commission, under the terms being discussed, would include no monetary penalty or admission of fraud, according to several people briefed on the case. But a settlement would represent the most significant acknowledgement yet by the mortgage companies that they played a central role in the housing boom and bust. (Source: Andrew Ross Sorkin)
This action is similar to a plea of "no contest" in a court of law. Back near the end of the Clinton term, there was a legislative drive put in place to foster the increase of housing sales to folks who would not normally qualify for a home loan. These were called "sub-prime" loans because they included monies loaned at below prime rates. This was a Progressive bit of legislation, and George W Bush bought into it, big time. When I write "Progressive bit of legislation," I mean to say that this legislative push, called "Affordable Housing," was an important part of the Progressives' redistribution of wealth agenda. Understand that radical progressive theory believes that "wealth" is both without limit and a national resource, belonging to all of us by rite of our humanity . . . . . seriously.
Simply put, Progressives believe that if you cannot earn your fair share of wealth, then someone needs to give it to you.
The problems associated with this effort were manifold. For starters, many of those who could not afford a house mortgage, were either lazy, irresponsible, essentially broke or educationally unequipped to understand that they were getting in "over their heads," financially. And because Progressive leadership does not believe in personal responsibility, the demand for increasing high risk loan quotas became a systemic aspect of the legislative/mortgage partnership of the Clinton/Bush/Obama Administrations. Banks lending this high risk money, were told to do so by our government. In fairness to George Bush, he was aware of the increased danger all this posed to our economy, but when he sought to correct the circumstance, the Dems (i.e., the commi babe, Maxine Waters, Barney Frank and the inept Nancy Pelosi among others) demonized the man as they asserted the health of the Affordable Housing program. Soon, banks had tied up all their "lending capital" with these low interest loans and turned to Fannie Mae and Freddie Mac for rescue. The two mortgage giants bought these high risk loans and, wala, more money was available.
Get this !! Fannie Mae was created by FDR back in the Great Depression, to buy up high risk loans from the lending world, freeing lending institutions to continue to write loans without changing their lending policies. Sound familiar ???!! In 1968, Freddie Mac was invented to "keep Fannie Mae from being a monopoly." Ha !!! That is what we were told. What a crock. Actually, it was created to double down on the subtle bailout program that Fannie Mae had become. With the increased federal demand for high risk lending to poor people came the requisite circumstance that led to our current crisis. The current recession is not the fault of excesses within the lending industry of this country apart from the culpability of a Progressive legislative community. On September 28, 2008, just days after the you know what hit the fan, the Boston Globe, hardly a conservative rag, ran this headline: Frank's fingerprints are all over the financial fiasco - The Boston Globe (the article has since been scrubbed from the internet; only its web description remains) . It is a deliberate lie of the Progressive movement that lays the blame for the current recession at the feet of Wall Street and the millionaire/multimillionaires who dominant that arena. House and Senate Republicans brought attention to the shady practices of Fannie and Freddie numerous times, before the collapse, including introducing into the House HR 2803, the Housing Finance Regulatory Restructuring Act of 2003. The bill was filibustered by the Democrats along party lines and defeated
Early efforts at correcting some of the more obvious problems with Fannie and Freddie are well documented (but often forgotten), as is seen in the following video. We are in the current recession primarily because of the Progressive/socialist agenda of the Left, period.
In 2008, the Democrat controlled Congress took over both Fannie and Freddie and declared both exchanges to be "substantially sound," financially. There is no question that Progressives used Federal monies to bailout sub-prime lenders right up until the time when the poorer homeowners began to default on their loans. The world of the Progressive (a chicken in every pot and home for every American) fell apart, almost in a single moment, and we are where we are today.
Understand that prior to TARP, we were bailing out the banking industry via Fannie and Freddie. When the demand for bailout money became too great, TARP was created - a 700 billion dollar piece of legislation that put just one man, Henry Paulson, in sole charge of its administration. Since TARP, I believe that more than 24 trillion dollars were funneled through that "law" and under the radar. (Google "TARP and 24 trillion and see what you get or read this story in the Washington Times).
The SEC is about to get the two mortgage giants to admit to a degree of guilt. Fannie and Freddie will not be fined, simply because they already owe more than half a trillion dollars and cannot afford a fine of even ten bucks !!
Thanks Progressives; thanks for nothing.
You read a "Brief history of Fannie . . . . and Freddie . . here. I did not vett this article and it is written by Time, so use it as a starter and trust in nothing it says, at face value. Never ever forget that Progressives believe that the ends always justify the means (see the 2nd chapter of Rules for Radicals if you disbelieve me).
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