Fannie Mae, Home Ownership, Liberalism

Fannie Mae said it will set aside the loan of a woman who shot herself in the shoulder as sheriff's deputies tried to evict her from her foreclosed home. [link]

She bought the house in nearly 40 years ago. Shouldn't she own the home outright by now? Okay, she doesn't, but then she takes out a 30 year loan on $45k in 2004 and a line of credit for $11,380. $56,000? That's got to be at least double what she paid for the house. What the hell have you been doing with your money? That $11k should have been enough to make nearly THREE YEARS of payments. I guess all your free money was up.

This woman is mentally ill. She does not need her home loan to be forgiven. What message does that send to the American taxpayer who is paying the price (literally) for the liberal 'compassion' that helped us into this mess. They specifically sought to loosen lending standards so the poor could afford homes. To hell with standards, let's show some compassion for the poor. Shouldn't they be able to get a house, like the rest of hardworking Americans? NO! They DON'T HAVE THE MONEY.

Do you hear me Mr. Banker? This person is POOR, do not lend them the money - they cannot repay you. You thought you could fleece them into paying the "interest only" payments you teased. Then you'd be making pure profit; even if they defaulted, which I'm sure you believed was inevitable, then at least you could reclaim your "rock solid" real estate asset and sell it for an additional profit. After all, home values could never decrease, could they? You greedy, stupid piece of trash.

Part Deux

New York Times - September 11, 2003

The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.

Treasury Secretary John W. Snow: ''There is a general recognition that the supervisory system for housing-related government-sponsored enterprises neither has the tools, nor the stature, to deal effectively with the current size, complexity and importance of these enterprises.''

A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates.

Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing.

''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''

You pandering charlatan. For all the Fannie Mae money pouring into the Democratic coffers and the votes of those with unrealistic dreams of home-ownership, you pretend that we don't live in the real world, where some people can't reasonably afford a house. If only THE BUSH ADMINISTRATION WARNED THIS COULD HAPPEN.

Part Trois

Politics and the Fannie Mae Piggy Bank

Franklin Raines was the chairman of Fannie during these years. He stood to make healthy bonuses if Fannie made target earnings per share (it was a publicly traded entity). Fannie Mae used its privileged borrowing power (a la Uncle Sam) to buy up mortgages and hold them, making a profit from the difference between the low price it paid to borrow the money and the higher interest rate it received on the mortgage. It was potentially profitable, but it had nothing to do with helping low- and middle-income people buy houses. It all made perfect sense to Raines though, who called these real estate assets "riskless."

Raines and vice-chair Jamie Gorelick became obsessed with propping up Fannie Mae's earnings per share, or EPS, even if they had to use creative accounting to make it happen. Raines set a series of increasingly higher EPS goals that, if met, would trigger bonuses for the executive team that far surpassed what they received in salary.

Raines's PERSONAL earnings from 1998-2003 as chairman of Fannie Mae? $90 Million. Ninety Million Dollars. NINETY MILLION. Gorelick, $26 Million.

Well at least these bad folks are in jail, finally exposed for the cheats they are, right?

• Obama campaign seeks Franklin Raines on mortgage and housing policy matters
• Jamie Gorelick possible AG pick for Obama

Aw, crap.