Meet Barney Frank...

[Conan71]

From the Manchester (NH) Union Leader:

http://www.unionleader.com/article.aspx?headline=Rewriting+history%3A+Shaheen+attacks+the+reformers&articleId=4bd5a12c-fafe-4a6b-bcf2-59f2db753cb0

In 2003, President Bush proposed a new regulatory agency within the Treasury Department to oversee Fannie and Freddie. Here is how The New York Times described the proposal:

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

"The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios."

Note the phrase, "the authority, which now rests with Congress." President Bush had to propose a new regulatory agency because Congress was not doing its job in overseeing Fannie and Freddie. For his part, Sen. John Sununu not only supported that reform, but twice introduced his own legislation proposing similar increases in federal oversight of Fannie and Freddie.

But here is what Rep. Barney Frank, D-Mass., ranking Democrat on the House Financial Services Committee, said of Bush's proposal back then: "These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis. The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing."

Even Fannie Mae and Freddie Mac supported the Bush proposal! But Frank led the Democrats in opposing every effort at serious reform because they wanted to use Fannie and Freddie to push "affordable housing." What did they mean by that? They meant giving loans to high-risk people who would not normally qualify for regular bank loans. We can now see what a good idea that was.

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And more, I guess his neighbors in New Hampshire don't think much of Barney.

For 16 years reformers in Congress have tried to improve oversight of Fannie Mae and Freddie Mac and prevent the government-chartered companies from putting the housing market and the whole economy at risk. All that time, Frank was involved in efforts to block those attempts, and in the last eight years he was a leader of those efforts.

In 2002, shortly before accounting irregularities were exposed at both companies, Frank said, "I do not regard Fannie Mae and Freddie Mac as problems," The Wall Street Journal reported. After the Freddie Mac accounting scandal in 2003, Frank said, "I do not think we are facing any kind of a crisis."

But there was a crisis, thanks in large part to Frank, Sen. Charles Schumer and others on the leash of these companies. In Congress, they made sure there was no additional oversight, no additional limit on executive behavior and compensation, and no further restraint on the growth of the companies' mortgage-backed-securities portfolios, among other changes.

(All of these needed reforms, by the way, have been championed for years by Sen. John Sununu.)

In fact, Frank & Co. made matters worse by pushing Fannie Mae and Freddie Mac to take on greater risk. They wanted more loans to people who might not qualify for traditional bank financing. And, as The Wall Street Journal has pointed out, Frank "pressured regulators to ease up on their capital requirements -- which now means taxpayers will have to make up that capital shortfall."

http://www.unionleader.com/article.aspx?headline=Featuring+Frank%3A+Symbol+of+failure&articleId=f78b0491-9b36-4478-9ee9-e23d6c06b24e

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Money Trail?

Brown Brothers Harriman & Co $29,300
Manulife Financial $15,000
Royal Bank of Scotland $13,800
American Bankers Assn $11,300
American Society of Appraisers $11,000

Real Estate $182,101
Securities & Investment $176,400
Lawyers/Law Firms $167,118
Insurance $155,798
Misc Finance $52,700

http://www.opensecrets.org/politicians/summary.php?cid=N00000275#raised

Just an example of one more dinosaur DC politician who was paid to look the other way.

[swake]

Conan,

You are partly right here, but aren't quite on the whole ugly picture. First off, the actual oversight of Fannie and Freddie was done by Office of Federal Housing Enterprise Oversight which was part of HUD and under Bush so a lot of blame can be shared here.

And it wasn't loans on "affordable" housing that got Fannie and Freddie in trouble. They got in trouble in a very lucrative side business they had. They used their status and ability to borrow money at fed rates to buy securities at below market interest rates and then flip the security to another buyer making money on the gap in available interest rates. They also had very low and non-standard limits on the amount of equity they had to maintain. They used their status as a government backed mortgage lender to make money in bonds, and lots of it. When the bond market went belly up because of non-FHA backed substandard loans Fannie and Freddie got in trouble as basically highly leveraged investment banks up to their necks in the bond market. But the loans they got in trouble on were not the loans that they backed as part of the FHA program. They got in trouble just like Bear-Stearns only much bigger and even more leveraged.

Fannie and Freddie's core government sponsored activity of mortgage backing (with five Trillion dollars in mortgages) is and always was stable.

All that money to lobby member of congress was money spent to make sure that Fannie and Freddie were able to stay in the bond market without all the normal rules of other banks, it had nothing to do with mortgages for minorities or the disadvantaged.

[mrburns918]

No surprises or shock in your post.

However, It does not excuse Paulson/Bernanke to kick back and not do their job.

Mr. Burns
Bob Barr for President

[Friendly Bear]

quote:Originally posted by swake

Conan,

You are partly right here, but aren't quite on the whole ugly picture. First off, the actual oversight of Fannie and Freddie was done by Office of Federal Housing Enterprise Oversight which was part of HUD and under Bush so a lot of blame can be shared here.

And it wasn't loans on "affordable" housing that got Fannie and Freddie in trouble. They got in trouble in a very lucrative side business they had. They used their status and ability to borrow money at fed rates to buy securities at below market interest rates and then flip the security to another buyer making money on the gap in available interest rates. They also had very low and non-standard limits on the amount of equity they had to maintain. They used their status as a government backed mortgage lender to make money in bonds, and lots of it. When the bond market went belly up because of non-FHA backed substandard loans Fannie and Freddie got in trouble as basically highly leveraged investment banks up to their necks in the bond market. But the loans they got in trouble on were not the loans that they backed as part of the FHA program. They got in trouble just like Bear-Stearns only much bigger and even more leveraged.

Fannie and Freddie's core government sponsored activity of mortgage backing (with five Trillion dollars in mortgages) is and always was stable.

All that money to lobby member of congress was money spent to make sure that Fannie and Freddie were able to stay in the bond market without all the normal rules of other banks, it had nothing to do with mortgages for minorities or the disadvantaged.

Barney is good at blowing taxpayer money. Wants to blow another $700 Billion that HE CAUSED THE PROBLEM.

He likes to blow things.

He's was also VERY good at sucking up to Fannie Mae and Freddie Mac for campaign contributions.

He's REALLY good at sucking, too.

Hold onto your pants.

[Hometown]

The Democrats wanted to make sure that Banks loaned money to qualified borrowers to purchase homes in minority neighborhoods that had been flagged by banks.  Banks had been refusing to make loans on properties in those neighborhoods.  End of story.

The Democrats were "not" encouraging $40,000 a year households to borrow money for $800,000 homes.  That kind of craziness didn't happen until very late in the housing bubble and it had to do with the packaging subprime loans into new kinds investment vehicles.

The later is what got us into trouble -- not qualified borrowers putting down a 10% downpayment and borrowing $100,000 to purchase a home in a minority neighborhood.  That kind of borrowing is good for the economy.

MODERATORS, I WANT TO OBJECT TO BEAR'S ABOVE POST.  IT IS A SEXUAL SLUR AIMED AT FRANK BECAUSE HE IS HOMOSEXUAL.  IN IS INAPPROPRIATE AND VIOLATES YOUR RULES ABOUT SEXUAL CONTENT.

[mrburns918]

quote:Originally posted by Hometown

The Democrats wanted to make sure that Banks loaned money to qualified borrowers to purchase homes in minority neighborhoods that had been flagged by banks.  Banks had been refusing to make loans on properties in those neighborhoods.  End of story.

The Democrats were "not" encouraging $40,000 a year households to borrow money for $800,000 homes.  That kind of craziness didn't happen until very late in the housing bubble and it had to do with the packaging subprime loans into new kinds investment vehicles.

The later is what got us into trouble -- not qualified borrowers putting down a 10% downpayment and borrowing $100,000 to purchase a home in a minority neighborhood.  That kind of borrowing is good for the economy.

MODERATORS, I WANT TO OBJECT TO BEAR'S ABOVE POST.  IT IS A SEXUAL SLUR AIMED AT FRANK BECAUSE HE IS HOMOSEXUAL.  IN IS INAPPROPRIATE AND VIOLATES YOUR RULES ABOUT SEXUAL CONTENT.

You make a good point here, that good ol' redlining move. A tradition in our fine country.

Mr. Burns
Bob Barr for President

[Friendly Bear]

quote:Originally posted by Hometown

The Democrats wanted to make sure that Banks loaned money to qualified borrowers to purchase homes in minority neighborhoods that had been flagged by banks.  Banks had been refusing to make loans on properties in those neighborhoods.  End of story.

The Democrats were "not" encouraging $40,000 a year households to borrow money for $800,000 homes.  That kind of craziness didn't happen until very late in the housing bubble and it had to do with the packaging subprime loans into new kinds investment vehicles.

The later is what got us into trouble -- not qualified borrowers putting down a 10% downpayment and borrowing $100,000 to purchase a home in a minority neighborhood.  That kind of borrowing is good for the economy.

MODERATORS, I WANT TO OBJECT TO BEAR'S ABOVE POST.  IT IS A SEXUAL SLUR AIMED AT FRANK BECAUSE HE IS HOMOSEXUAL.  IN IS INAPPROPRIATE AND VIOLATES YOUR RULES ABOUT SEXUAL CONTENT.

He IS?

Really?

Oh, my!

Can't take a $700 BILLION Tax-Payer financed joke?  

Where's your sense of humor?

[:X]

[Hometown]

You are out of your league Bear.

[Conan71]

quote:Originally posted by Hometown



The later is what got us into trouble -- not qualified borrowers putting down a 10% downpayment and borrowing $100,000 to purchase a home in a minority neighborhood.  That kind of borrowing is good for the economy.

You are correct, qualified borrowers with performing loans, the loans which paid and are paying, are not part of the problem.

Swake is incorrect.  ALL defaults ARE a part of the problem, not just the greedy dumbasses who bought $800K homes on $40K/year.  Sounds like some acceptance with more carefully-crafted  denial.

What was the "gateway drug" here?  Sub-prime mortgages.

I really don't care to re-state the whole chain of events, I believe I've explained plenty.  And yes, I do have a background in consumer lending- primarily to risker borrowers- back when "AIG" was American General. []

[Breadburner]

I think Barney Frank took speech from Lou Holtz......

[Hometown]

Gateway drug was lenders waiving sound lending principles; dropping proof of income requirements; making 120% loans; encouraging unsophisticated people to purchase homes they clearly could not afford.

This didn't happen until late.  In 2003 I did a refi with eloan and was floored when they asked me if I would be willing to prove my income -- like it was some kind of option.

Underwriters looked at the numbers and signed off on these crazy loans?  Blame the lenders.

[Conan71]

quote:Originally posted by Hometown

Gateway drug was lenders waiving sound lending principles; dropping proof of income requirements; making 120% loans; encouraging unsophisticated people to purchase homes they clearly could not afford.

This didn't happen until late.  In 2003 I did a refi with eloan and was floored when they asked me if I would be willing to prove my income -- like it was some kind of option.

Underwriters looked at the numbers and signed off on these crazy loans?  Blame the lenders.

All the while, the mortgage and housing industries kept paying the lobbyists to keep the politicians greased in DC to keep their heads turned so that they could propagate this risky behavior.

I'm not absolving the lenders nor their investors of gross stupidity.

Here's where I stand on the issue:

I'm incredibly pissed that everyone is playing partisan politics with the unintended consequences of good government intentions,   while these assmonkeys on Wall St. are begging for a bail out to their own greed and stupidity.

Our Congress sat idly by and allowed this to happen un-mitigated.

People who believe it's the exclusive fault of Democrats are dupes.

People who believe it's the exclusive fault of Republicans are dupes.

[Hometown]

In 2005 I chatted with a mortgage broker in San Francisco who talked about funds that had been formed to take advantage of the buying opportunities that would arise when the housing bubble burst.  Everyone knew what was going to happen.  

That's why we sold our home in Oakland and cashed out and left California.  I sure would hate to be holding an $800,000 mortgage there or here for that matter.

The housing bubble has been very disruptive in many different ways for some time now.

I have heard that realtors were the largest contributors to Baby Bush.  But no, I don't hold the Republicans accountable for this other than the fact that they were largely in charge when it started and ripened.

I blame the lenders.

[waterboy]

quote:Originally posted by Friendly Bear

quote:Originally posted by swake

Conan,

You are partly right here, but aren't quite on the whole ugly picture. First off, the actual oversight of Fannie and Freddie was done by Office of Federal Housing Enterprise Oversight which was part of HUD and under Bush so a lot of blame can be shared here.

And it wasn't loans on "affordable" housing that got Fannie and Freddie in trouble. They got in trouble in a very lucrative side business they had. They used their status and ability to borrow money at fed rates to buy securities at below market interest rates and then flip the security to another buyer making money on the gap in available interest rates. They also had very low and non-standard limits on the amount of equity they had to maintain. They used their status as a government backed mortgage lender to make money in bonds, and lots of it. When the bond market went belly up because of non-FHA backed substandard loans Fannie and Freddie got in trouble as basically highly leveraged investment banks up to their necks in the bond market. But the loans they got in trouble on were not the loans that they backed as part of the FHA program. They got in trouble just like Bear-Stearns only much bigger and even more leveraged.

Fannie and Freddie's core government sponsored activity of mortgage backing (with five Trillion dollars in mortgages) is and always was stable.

All that money to lobby member of congress was money spent to make sure that Fannie and Freddie were able to stay in the bond market without all the normal rules of other banks, it had nothing to do with mortgages for minorities or the disadvantaged.

Barney is good at blowing taxpayer money. Wants to blow another $700 Billion that HE CAUSED THE PROBLEM.

He likes to blow things.

He's was also VERY good at sucking up to Fannie Mae and Freddie Mac for campaign contributions.

He's REALLY good at sucking, too.

Hold onto your pants.

Soooo...Aryan Bear is not only afraid of Black men but gays as well. Interesting. And how do you feel about domineering women AB? I notice you're fascinated with Palin. Have you shared this with your analyst?

I'm sensing reaction formation here. Come out of the closet little bear. Its a big tent now.[]

[Friendly Bear]

quote:Originally posted by waterboy

quote:Originally posted by Friendly Bear

quote:Originally posted by swake

Conan,

You are partly right here, but aren't quite on the whole ugly picture. First off, the actual oversight of Fannie and Freddie was done by Office of Federal Housing Enterprise Oversight which was part of HUD and under Bush so a lot of blame can be shared here.

And it wasn't loans on "affordable" housing that got Fannie and Freddie in trouble. They got in trouble in a very lucrative side business they had. They used their status and ability to borrow money at fed rates to buy securities at below market interest rates and then flip the security to another buyer making money on the gap in available interest rates. They also had very low and non-standard limits on the amount of equity they had to maintain. They used their status as a government backed mortgage lender to make money in bonds, and lots of it. When the bond market went belly up because of non-FHA backed substandard loans Fannie and Freddie got in trouble as basically highly leveraged investment banks up to their necks in the bond market. But the loans they got in trouble on were not the loans that they backed as part of the FHA program. They got in trouble just like Bear-Stearns only much bigger and even more leveraged.

Fannie and Freddie's core government sponsored activity of mortgage backing (with five Trillion dollars in mortgages) is and always was stable.

All that money to lobby member of congress was money spent to make sure that Fannie and Freddie were able to stay in the bond market without all the normal rules of other banks, it had nothing to do with mortgages for minorities or the disadvantaged.

Barney is good at blowing taxpayer money. Wants to blow another $700 Billion that HE CAUSED THE PROBLEM.

He likes to blow things.

He's was also VERY good at sucking up to Fannie Mae and Freddie Mac for campaign contributions.

He's REALLY good at sucking, too.

Hold onto your pants.

Soooo...Aryan Bear is not only afraid of Black men but gays as well. Interesting. And how do you feel about domineering women AB? I notice you're fascinated with Palin. Have you shared this with your analyst?

I'm sensing reaction formation here. Come out of the closet little bear. Its a big tent now.[]

I'm afraid of bending over in the House Cloak Room to tie my shoe with Barney looming behind me......

Otherwise,

Dominating women with Black High Heels, Garter Belt, Teddy or bustier, and Wunder Busen I'm definitely in favor of.

Wunderbar!

Ja, Liebling!!

Do your Wurst!