SHOT IN THE FANNIE MAE
This was emailed to us by PWiggen in Power Point format. I’ve taken the liberty of transcribing it and posting it here.
Update: Dennis Jantz has provided us with an update to his Power Point Presentation. This is now Version 2.0.
The History of a Financial Disaster
- Fannie Mae is a GSE (Govt. Sponsored Entity) regulated by Congress.
- Fannie Mae buys mortgages from other companies.
- It is backed by the taxpayers for all losses, but keeps all profits!!!
- President Clinton advocates changes to the Community Reinvestment Act from 1977.
- Atty. General Janet Reno, accuses mortgage industry of “redlining.“
- HUD, under Andrew Cuomo, changes lending rules to encourage loans to the poor, for “Community development.”
- Reno threatens banks and mortgage companies with “investigations” if they don’t comply.
- Banks begin making thousands of bad loans. EX: 0 down, no documentation of income, for 120% (1998 – 2008).
- Executives at Fannie receive huge bonuses if loan asset targets are met.
- Franklin Raines and Jamie Gorelick from the Clinton Administration are appointed to run Fannie Mae.
- Raines earns $100 million in bonuses
- Gorelick earns $75 million in bonuses
- In 2004, Enron collapses, congress investigates, Executives Jeff Skilling & Ken Lay go to jail for fraudulent bookkeeping.
- Congress responds with the Sarbanes-Oxley Act, requiring heavy regulation of corporations
President Bush proposes a new oversight committee to clean up Fannie Mae, but Democrats derail the effort.
- Rep. Melvin Watt, (D-NC) Committee on Financial Institutions & Consumer Credit stated, “I don’t see much other than weakening the bargaining power of poorer families to get affordable housing.” CLICK HERE
- Fannie Mae engages in massive fraudulent bookkeeping.
- False numbers triggered executive bonuses every year.
- Congress holds no hearings, no one goes to jail, or is punished.
- WHY NOT?
1999 – 2005
- Fannie Mae pays millions to 354 Representatives and Senators from both parties, especially on oversight committees.
- Fannie Mae gives millions to Democratic causes, example: ACORN, now under investigation for widespread voter registration fraud.
- Who got the most money?
- Sen. Christopher Dodd, (D-CT) Chairman of the Banking, Housing, & Urban Affairs Committee, 2006 and onward.
- Sen. Barack Obama, (D-IL) Federal Financial Management Committee
7. Rep. Paul Kanjorski, (D-PA) Chairman of the House Financial Services Sub-Committee on Capital Markets, Insurance, & GSE’s, 2006 and onward.
26. Rep. Barney Frank, (D-MA) Chairman of the House Financial Services Committee, 2006 and onward.
President Bush, reviled & criticized by Democrats, tried no fewer than 17 times to reform Fannie/Freddie. A bill cleared the Senate Banking Panel in 2005, but stalled due to implacable opposition from Democrats & a critical core of GOP abettors. Rep. Barney Frank spearheaded the fight.” – Investors Business Daily
- Franklin Raines & top execs are forced to resign from Fannie Mae.
- Jim Johnson takes over ($1.9 Million)
- They DO NOT go to jail…
- There is no media “perp walk.”
- They keep all of their bonuses.
- They finally pay $31.4 million in civil fines.
The Federal Housing Enterprise Regulatory Reform Act is sponsored by:
- #325 – Sen. John McCain, (R-AZ) Armed Services & Commerce, Science & Transportation
McCain said, “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.”
- NONE of the Top Recipients of Fannie money support the legislation
- The Reform Act never even makes it out of committee
- NONE of the politicians return ANY of the money, tainted by fraud.
- John McCain’s campaign manager, Rick Davis had received income from Fannie Mae & Freddie Mac
- He was a partner in a consulting firm which received $500,000 from Freddie Mac
- $2 million as president of the Homeowners Alliance, a coalition formed & financed by Fannie & Freddie
- New York Times, 9/23/08
- Regulators at the Securities and Exchange Commission and the Office of Federal Housing Enterprise Oversight, announce a settlement with Fannie Mae that includes $400 million in penalties. Washington Post
- Fannie Mae engaged in “extensive financial fraud” over six years by doctoring earnings so executives could collect hundreds of millions of dollars in bonuses, federal officials said yesterday in a report that portrayed a company determined to play by its own rules.
- Fannie Mae & Freddie Mac goes bankrupt and the Govt. takes them over.
- Lehman Brothers goes bankrupt from making bad loans.
- AIG gets $85 billion in loan guarantees.
- Obama, Pelosi, & Reid try to blame “Eight years of financial mismanagement by the Bush Administration” for the crisis.
- Barney Frank says, “The private sector got us into this mess, the govt. must get us out.”
- The Bush Administration & Congress have passed legislation to buy up all the bad loans, at an initial cost to you of: $700 BILLION.
And the future… ?
- Will any of those who committed fraud ever face justice, or pay a dime?
- Will the taxpayers ever get their money back?
- What was your Senators’ or Reps’ role, for better or worse?
- Who will pay for even more government control of the economy?
Congressional Record, 5/25/06
Herald Tribune, 4/18/08
Husock, Howard. “The Trillion-Dollar Bank Shakedown That Bodes Ill for Cities.” City Journal), Manhattan
Institute for Policy Research, 1/1/00.
New York Times, 9/13/03 & 9/23/08
Day, Kathleen. “Study Finds ‘Extensive’ Fraud at Fannie Mae” Washington Post
Jones, Terry. “Crony Capitalism is Root Cause of Fannie & Freddie Troubles.” Investors Business Daily, 9/22/08.
Mayer, Lindsay R. “Fannie Mae & Freddie Mac Invest in Lawmakers.” http://www.opensecrets.org/news/2008/09/update-fannie-mae-and-freddie
Dennis Jantz, 2008Explore posts in the same categories: Analysis, politics