Tag Archives: Fannie Mae

Obama to Follow Governor Sarah Palin’s Advice on Fannie/Freddie That Corrupt Media Called a Gaffe in 2008

palin2

Hey media, now do you get it?

~ Governor Sarah Palin on Obama and the media’s continued dishonesty

By Gary P Jackson

Once again, Governor Sarah Palin has been proven right on something. It gets rather tiring laughing at liberals and their corrupt media partners, or as I like to call them, lying liars who lie!

Unless you’ve been on another planet for the last decade or so, you know the big financial meltdown that happened in 2007-2008 was all due to a law put in place by failed democrat president Jimmy Carter in the 1970s, and put on steroids by Bill Clinton.

Carter created something called the “Community Re-Investment Act” after pressure from the usual suspects in the race hustling industry. What the CRA did was force banks to abandon best practices, like making sure they were loaning money to people who could actually pay the loans back. As you can imagine, having a good credit history, and the ability to repay the loan as spelled out by a contract, was deemed “racist” by those who go around deeming things racist for their own gain.

What Clinton did, was not only put his blessing on this disaster-waiting-to-happen, but help investors monetize loans that should have never been made in the first place. Trillions of dollars worth of loans that should have never been made. Now Fannie and Freddie are the nation’s largest mortgage holders.

Fannie Mae

Though President George W Bush didn’t exactly stop this nonsense, he did want stronger controls put in place back in 2003, and the Republican controlled Congress tried to reform Fannie Mae and Freddie Mac, the two MASSIVELY CORRUPT government sponsored agencies behind all of these failed loans, on more than 30 occasions, with about the same luck the GOP controlled House is having repealing ObamaCare today.

Here’s video excerpts from hearings in 2004:

You see, financial responsibility is RACIST.

In the middle of all of this, Franklin Raines, the CEO of Fannie Mae, was under investigation by the Securities and Exchange Commission for massive fraud.

In 2005 Fortune magazine had a lengthy article talking about all the risky loans and the multi-billion dollar accounting fraud that rivaled Enron, WorldCom, and other scams of the day. It’s a solid read.

In 2009 John Carney wrote an extensive history of Carter’s CRA and how it caused the financial meltdown. This is another must read.

During all of this, John McCain had sponsored legislation that would have greatly reformed Fannie/Freddie, and possibly averted the pending financial collapse. Of course, it failed, because democrats fought it with every ounce of their beings.

From Mary Katharine Ham:

First off, I welcome President Barack Obama’s call to shutter mortgage giants (and giant pains in the public arse) Fannie Mae and Freddie Mac. Many conservatives and libertarians have been beating that drum since 2008 and before, back when Obama was voting present on regulation of Fannie/Freddie and taking more in donations from them than all but one lawmaker.

Now, it seems, we can work together on this project, as Obama pushed a Senate plan to close Fannie and Freddie during an economic address in Arizona:

But as home prices rise, we can’t just re-inflate a housing bubble. That’s the second thing I’m here to talk about today: laying a rock-solid foundation to make sure the kind of crisis we just went through never happens again.

That begins with winding down the companies known as Fannie Mae and Freddie Mac. For too long, these companies were allowed to make big profits buying mortgages, knowing that if their bets went bad, taxpayers would be left holding the bag. It was “heads we win, tails you lose.” And it was wrong.

The good news is that there’s a bipartisan group of Senators working to end Fannie and Freddie as we know them. I support these kinds of efforts, and today I want to lay out four core principles for what I believe this reform should look like.

First, private capital should take a bigger role in the mortgage market. I know that must sound confusing to the folks who call me a raging socialist every day. But just like the health care law that set clear rules for insurance companies to protect consumers and make it more affordable for millions to buy coverage on the private market, I believe that while our housing system must have a limited government role, private lending should be the backbone of the housing market, including community-based lenders who view their borrowers not as a number, but as a neighbor.

Second, no more leaving taxpayers on the hook for irresponsibility or bad decisions. We encourage the pursuit of profit – but the era of expecting a bailout after your pursuit of profit puts the whole country at risk is over.

A Senate bill co-sponsored by Sen. Bob Corker (R-Tenn.) and Sen. Mark Warner (D-Va.) “would end Fannie and Freddie as government-sponsored enterprises,” though a Rep. Jeb Hensarling companion bill in the House is more ambitious, cutting down government participation in the mortgage market to about 20 percent, according to an AEI evaluation

Obama fannie_mae_rect

MKH goes on to say:

I also welcome the inevitable change of heart from the press and fact-checkers who called this exact sentiment a “gaffe” when newly named vice presidential candidate Sarah Palin said it in 2008. Here’s Palin in Colorado Springs in September of 2008:

John McCain has been calling for years to reform things and cut bureaucracy, even at the lending agencies that our government supports. The fact is Fannie Mae and Freddie Mac have gotten too big and too expensive to the taxpayers. The McCain-Palin administration will make them smaller and smarter and more effective for homeowners who need help.

[….]

Fact-checkers, reporters, and critics preserved the ridiculous fiction that government-sponsored entities don’t cost taxpayers anything in order to lambaste the political newcomer.

MKH goes on to list all of the corrupt “journalists” [and their statements] who called Governor Palin’s statement a “gaffe” back in 2008. So far none of them have called Obama’s speech a “gaffe” though.

On Facebook, Governor Palin simply responded to Obama and the media’s hypocrisy with: “Hey media, now do you get it?

Not a mea culpa, but in 2012 the far left Salon attacked Obama for being asleep at the wheel on Fannie and Freddie, and reminded it’s readers that both were, for all intents and purposes, government agencies:

And here’s the rub. The Obama administration wants — or says it wants — principal reduction. And for all intents and purposes, the government owns Fannie Mae. Originally a quasi public-private entity referred to with the weasel words “government-sponsored enterprise,” Fannie Mae was essentially nationalized during the housing crisis in a bailout that cost taxpayers hundreds of billions of dollars.

You buy it, you own it, right? So how is it possible that the new CEO of an institution that is basically a fully taxpayer-funded government agency can be directly at odds with White House policy?

More here.

Of course, Fannie and Freddie were GOVERNMENT SPONSORED “quasi-public-private” enterprises BEFORE the housing crisis, as history tells us.

We’ve known Carter’s failed policies have been destroying America, little by little, for decades. Just look at the state of primary education since Carter nationalized it. We’ve also known that Fannie and Freddie were the cause of the financial crisis. What this episode really serves to remind us though, is that the media is as corrupt and untrustworthy as it could possibly be, and that in fact, Sarah Palin is always proven right on these things.

Unlike M-Kat, I won’t hold my breath waiting for the “journalists” to apologize or admit they lied. We still haven’t heard an apology on “death panels“, Libya, Quantitative Easing, or any of the other dozens of things the media lied about, concerning Governor Palin, in which she has proven to be spot on.

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Newt’s Ties To Fannie Mae and Freddie Mac Longer, Deeper, More Corrupt than You Thought

By Gary P Jackson

First we heard Newt Gingrich had gotten a few hundred thousand from mortgage giant Freddie Mac, for some unknown reason.

That actually turned into a number reportedly between $1.6 and $1.8 million.

Newt claimed he was merely playing the role of historian. No one but the mentally afflicted actually bought that load of BS though, as few historians have D.C. offices on K Street. You know who has a lot’s of offices on K Street in D.C.? Lobbyists.

Now there is a new report out that helps us understand how Newt, a lifelong politician with no history or demonstrated skills in sales, marketing, or mortgage lending, landed a $25,000 a month gig at Freddie Mac, almost immediately after he left Congress in disgrace.

According to the Eric Lichtblau of the New York Times, Newt’s ties to both Freddie Mac and Fannie Mae go back to his time as Speaker of the House. Just as we’ve reported many times that Newt’s work with Freddie, after he left Congress, included trying to stop Congress from coming down hard on the corrupt lender, it now seems he played that same role as Speaker, blocking important legislation. Legislation, that had it been enacted, and enforced, might have staved off the looming housing bubble, that would eventually cause the financial crash of 2007-2008.

If you are thinking I am saying Newt played a direct role in the collapse of the American economy, you would be right.

Both as Speaker and later as a lobbyist, Newt stood with his buddies on the left to stop commonsense legislation that may have been able to stop the absolute mess we are in now.

No allegations, so far, that money changed hands while Newt was Speaker, but he was certainly wined and dined, and there was that lucrative “consulting job” just waiting for him when he left Congress.

From the Times: [emphasis mine]

WASHINGTON — On a trip to Ireland in 1998, Speaker Newt Gingrich researched his Irish roots, discussed the prospects for peace in Northern Ireland and entertained speculation about his presidential ambitions. He even donned work gloves and blue jeans to help build a home in Belfast for a good-will project.

Two of the sponsors for part of the Ireland trip were frequent partners of Mr. Gingrich: Freddie Mac and Fannie Mae — the government-backed housing industry giants that Mr. Gingrich has denounced as he fights to stay in contention against Mitt Romney in the Republican primaries.

Mr. Gingrich has faced many questions recently about the more than $1.6 million in consulting fees he got from Freddie Mac since leaving Congress in 1999. But part of the relationship started years earlier, as records and interviews show that Mr. Gingrich, as House leader in the 1990s, aligned himself with Freddie and Fannie on a number of key issues — defending them in Congress against political attacks, joining with them on housing projects and seeing top aides go work for them.

While Mr. Gingrich has minimized his past connections to the two closely related companies on the campaign trail, his Congressional record shows that his political and financial ties to the firms run deeper and farther back than he has acknowledged publicly and, in fact, set the stage for the lucrative consulting work that followed.

Mr. Gingrich, whose campaign declined to comment on his ties with Fannie and Freddie while in Congress, has been blistering in his recent criticism of the mortgage finance companies. He has blamed them in part for the 2008 housing collapse, said they should now be “broken up,” and in an October debate he declared that Representative Barney Frank should be “in jail” for associating with lobbyists close to Freddie.

But while in Congress, Mr. Gingrich had kind words for the companies. Announcing a housing partnership in Atlanta in 1995, for instance, he held up Fannie as “an excellent example of a former government institution fulfilling its mandate while functioning in the market economy.”

He was far from Fannie and Freddie’s only Congressional supporter in those years; before the stain of the 2008 housing collapse, the companies’ allies were legion.

But Mr. Gingrich’s help was seen as particularly crucial after the Republicans took control of the House in 1994, as Freddie and Fannie tried to turn back rising hostility from some Republicans over their mission, structure and financing.

Once he became speaker in 1995, Mr. Gingrich’s support loomed large as the companies sought to shore up flagging confidence among the Republicans and bolster the case for home ownership, officials said.

Whenever you could get Republicans who supported you, it was important, and the more prominent the Republican, the better,” said William Maloni, a senior vice president at Fannie Mae until 2004. “Newt would have been important.”
Mr. Gingrich’s senior advisers were important as well, with a handful of his aides and confidants going on to work for Freddie and Fannie or for lobbying groups that represented them. Of particular significance, several officials said, was Fannie’s hiring of Arne L. Christenson, Mr. Gingrich’s chief of staff, as a top executive and lobbyist in 1999.

From their perspective, hiring someone who could beef up their Republican credentials made perfect sense,” said Jack Howard, policy director for Mr. Gingrich at the time. Mr. Christenson did not return a call seeking comment.

In a showdown critical to the companies’ fortunes, Mr. Gingrich played an important behind-the-scenes role in helping block a proposal in 1995 that would have forced Fannie and Freddie — rather than taxpayers — to pay potentially billions of dollars in increased fees, according to interviews and press accounts at the time.

At the time, Representative Jim Leach, a senior Republican from Iowa who led the House banking committee and was a fierce critic of Fannie and Freddie, wanted the companies to pay the bulk of about $4.8 billion to finance a reserve for ailing savings and loan institutions.

Through their lobbyists, Freddie and Fannie fought hard against the plan, and Mr. Gingrich made his opposition to it clear in a meeting with Mr. Leach on Capitol Hill. By the time the two men emerged, the proposal was dead.

Newt was quite a pragmatist,” said a Republican official who was involved in the fee increase debate and spoke on the condition of anonymity to avoid becoming embroiled in the current Republican race. In coming to the defense of Freddie and Fannie, Mr. Gingrich “was going with the consensus of his party — of both parties, really,” the official said.

A separate attempt within the House budget committee in 1995 to raise fees on Freddie and Fannie by hundreds of millions of dollars also died without a vote after Mr. Gingrich rejected it. The speaker asserted that raising fees would violate the Republicans’ oft-cited no new tax pledge.

Fannie and Freddie each declined to comment on the companies’ relationships with Mr. Gingrich in the 1990s.

Beyond his role in thwarting legislative threats, Mr. Gingrich also worked with Fannie and Freddie on a number of housing projects in the United States and overseas.

The visit to a Belfast neighborhood in 1998 to start building a home for a low-income family was part of a foreign extension of an American program called “The House that Congress Built.”

The Belfast project was sponsored principally by Fannie and Freddie, along with Habitat for Humanity and the National Association of Realtors. The Realtors’ association called the housing project “a truly unique partnership” between lawmakers and the housing industry.

Marianne Gingrich, Mr. Gingrich’s wife at the time, joined him in Ireland, as did other members of Congress. Public money was apparently used for portions of the trip, considered Congressional business, but the breakdown on the financing, and what part was covered by Fannie and Freddie, could not be determined. Congressional records indicate that Mr. Gingrich did not file a financial disclosure statement for 1998 that would show gifts and trips provided by outside groups that year, although House rules appear to require him to have filed a report within 30 days after he left Congress under an ethics cloud in January 1999.

The Gingrich campaign said he was invited on the trip by Habitat for Humanity. “Improving access to home ownership has long been an aim of his public policy,” the campaign said.

Mr. Howard, the former Gingrich aide, said he associated the housing projects more with Habitat for Humanity, a nonpartisan Christian group headquartered in Mr. Gingrich’s home state of Georgia, than with the corporate sponsors Fannie and Freddie.

It was a feel-good thing,” he said of the projects. “I think Newt probably saw this as just a good opportunity to do something for Habitat for Humanity.”

In general, Mr. Howard said, issues connected to Fannie and Freddie — whether legislative, political or civic — “were not a priority” for Mr. Gingrich during his time as speaker. “I don’t remember him being directly involved at all,” he said.

But months after Mr. Gingrich left Congress, his direct involvement became clear, as his consulting company signed a $25,000-a-month contract with Freddie. In 2006, he signed a second contract with Freddie as a strategic adviser, a role he described initially as a “historian.” Mr. Romney has branded the work as “influence peddler.”

Defending the contracts, Mr. Gingrich has contrasted the work he did for Freddie as a consultant with the work he did in Congress, when he said he was aligned with those seeking industrywide changes in housing policies.

There’s a huge difference between what you do when you’re in public office and you’re dealing with the public trust,” he said on Fox News, “and what you do as a private business person who has no direct power and no direct responsibility and you’re sitting there offering advice.

Some of Mr. Gingrich’s defenses have fallen flat, however, as when he attacked Mr. Romney in a debate last month for holding mutual fund investments in Freddie and Fannie.

Have you checked your own investments?” Mr. Romney retorted, pointing out that Mr. Gingrich also held investments in them through mutual funds.

All right,” Mr. Gingrich responded, falling silent.

It’s interesting how Newt drags Habitat for Humanity, a wonderful charity, into this as cover for his trip that was most certainly paid for by Fannie and Freddie.

Typical politician.

How Newt has conned people into thinking he is some sort of “political outsider” is beyond me. This guy is the poster boy for the corrupt, influence peddling, political insider we should be running out of politics forever. The sort Sarah Palin’s chief adviser Peter Schweizer talks about in his must have book, Throw Them All Out.

Newt is one of those who went to Washington and became a very rich man, not by producing a damned thing, but instead by manipulation and influence peddling. Thanks to Newt and his time in office we now have less Liberty, less Freedom, and less money.

I wonder if we will ever know how much Newt’s shenanigans actually cost us taxpayers.

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Flashback: Newt Took $300,000 From Freddie Mac to Stop Congress From Making Much Needed Reform

By Gary P Jackson

Let’s take a trip back to the “good old days” when George W Bush was President and Republicans controlled Congress.

All of us remember the collapse of the mortgage industry and the billions of dollars lost. We also remember this was because of mismanagement and outright fraud at Fannie Mae and Freddie Mac. The top executives at these two quasi-government agencies were stealing the money hand over fist, and thanks to the Carter era “Community Re-investment Act” that was later supercharged by Bill Clinton, making high risk loans to people who had absolutely no ability to repay these loans.

We’re still suffering from the results of this mess. It was the misdeeds by those who ran Fannie and Freddie that caused the financial collapse of 2008. The economy is still in shambles thanks to this.

The Bush administration tried on numerous occasions to fix this problem, starting in 2003. As usual, the democrats pulled out the race card, and proceeded to demonize anyone who dared to stop the madness. This from 2004:

This was in 2004. Notice all of them say nothing was wrong with Fannie Mae and Freddie Mac.

As John Gibson points out these agencies were corrupt, and basically slush fund to pay off democrats [and some Republicans] so they could keep their scheme going. To keep stealing, to keep wasting taxpayer money.

Notice, Barack Obama, who had only been in the Senate a short time, was second only to Chris Dodd in the money received.

In 2005 Congress once again tried to regulate Fannie and Freddie, and once again met steep resistance from the democrats. On May 25, 2006 John McCain spoke forcefully in support of the legislation and against the evils and corruption at Fannie and Freddie:

Mr. President, this week Fannie Mae’s regulator reported that the company’s quarterly reports of profit growth over the past few years were “illusions deliberately and systematically created” by the company’s senior management, which resulted in a $10.6 billion accounting scandal.

The Office of Federal Housing Enterprise Oversight’s report goes on to say that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives. In the case of Franklin Raines, Fannie Mae’s former chief executive officer, OFHEO’s report shows that over half of Mr. Raines’ compensation for the 6 years through 2003 was directly tied to meeting earnings targets. The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac.

The OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulator’s examination of the company’s accounting problems. This report comes some weeks after Freddie Mac paid a record $3.8 million fine in a settlement with the Federal Election Commission and restated lobbying disclosure reports from 2004 to 2005. These are entities that have demonstrated over and over again that they are deeply in need of reform.

For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac–known as Government-sponsored entities or GSEs–and the sheer magnitude of these companies and the role they play in the housing market. OFHEO’s report this week does nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO’s report solidifies my view that the GSEs need to be reformed without delay.

I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.

I urge my colleagues to support swift action on this GSE reform legislation.

This was a full two years before the collapse. Ed Morrissey has a good article here.

While the Republicans were doing their jobs: sounding the alarms, and trying to stop this, where was Newt Gingrich?

Well, good old Newt was taking a $300,000 pay-off from Freddie Mac, to help STOP the Republicans: [emphasis mine]

Internal Freddie Mac budget records show $11.7 million was paid to 52 outside lobbyists and consultants in 2006. Power brokers such as former House Speaker Newt Gingrich were recruited with six-figure contracts. Freddie Mac paid the following amounts to the firms of former Republican lawmakers or ex-GOP staffers in 2006:

*Sen. Alfonse D’Amato of New York, at Park Strategies, $240,000.

*Rep. Vin Weber of Minnesota, at Clark & Weinstock, $360,297.

*Rep. Susan Molinari of New York, at Washington Group, $300,062.

*Susan Hirschmann at Williams & Jensen, former chief of staff to House Majority Leader Tom DeLay, R-Texas, $240,790.

[ …. ]

The records obtained by the AP reflect growing concern within Freddie Mac over a chorus of criticism from Republicans worried that Freddie Mac and Fannie Mae had grown too big. The two companies owned or guaranteed over $5 trillion in mortgages.

The Bush administration and Federal Reserve Chairman Alan Greenspan were sounding the alarm about the potential threat to the nation’s financial health if the fortunes of the two mammoth companies turned sour. They did eventually, when they took on $1 trillion worth of subprime mortgages and when their traditional guarantee business deteriorated. Commercial banks regarded Freddie Mac and Fannie Mae as competitors and were anxious to pick up business that would result from scaling back the two companies.

Pushing back, Freddie Mac enlisted prominent conservatives, including Gingrich and former Justice Department official Viet Dinh, paying each $300,000 in 2006, according to internal records.

Gingrich talked and wrote about what he saw as the benefits of the Freddie Mac business model.

Read more here.

The “Freddie Mac business model” consisted of stealing the investors blind and making irresponsible loans. Did Newt actually think Freddie Mac’s business was sound, or was he just earning his $300,000?

We’ve talked about the many betrayals of Newt Gingrich, and this is yet another. While his former colleagues in Congress were trying to actually do their jobs, something that might have saved the Republic from one of the worst economic meltdowns in history, good old Newt sold his soul to the very people who would destroy our economy, for a few pieces of silver.

As the 2012 Republican presidential candidates continue to look less and less appealing, some are starting to fall for Newt’s pretty words and big promises.

Without a true leader in the bunch, no one to really get excited about, many conservatives are falling into the deadly pattern of listening to flowery speeches instead of researching the records of the candidates. Suddenly beating Obama is more important than electing an honest man who will actually bring the reform necessary for the nation to survive.

We must defeat Obama, for sure, but putting in another life-long politician, whose integrity can be bought for a pittance, ain’t gonna get it done. Newt Gingrich is not a man of principle. He’s someone who is always ready to bring aid and comfort to those who would destroy our country. Especially if there is money to be made while doing it.

It would be an incredible mistake to elect a man like Newt. A man who can’t be trusted in any situation.

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