Bush and McCain Proposed Oversight of Fannie Mae and Freddie Mac

Okay.  Now somebody is not telling the whole story here.  This September 17, 2008, article in the Washington Post, begins by stating this:

A decade ago, Sen. John McCain embraced legislation to broadly deregulate the banking and insurance industries, helping to sweep aside a thicket of rules established over decades in favor of a less restricted financial marketplace that proponents said would result in greater economic growth.

It goes on to state:

In 2002, McCain introduced a bill to deregulate the broadband Internet market, warning that “the potential for government interference with market forces is not limited to federal regulation.” Three years earlier, McCain had joined with other Republicans to push through landmark legislation sponsored by then-Sen. Phil Gramm (Tex.), who is now an economic adviser to his campaign. The Gramm-Leach-Bliley Act aimed to make the country’s financial institutions competitive by removing the Depression-era walls between banking, investment and insurance companies.

But there is no mention whatsoever of the following from the New York Times in September of 2003 and this is why the credibility of most of the media is at risk because they slant the story to say what they want it to say and not even try to give an overall truthful picture:

New Agency Proposed to Oversee Freddie Mac and Fannie Mae

By Stephen Labaton

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.

Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.

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.

The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac — which together have issued more than $1.5 trillion in outstanding debt — is broken. 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.

”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,” Treasury Secretary John W. Snow told the House Financial Services Committee in an appearance with Housing Secretary Mel Martinez, who also backed the plan.

Significant details must still be worked out before Congress can approve a bill. 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.” Representative Melvin L. Watt, Democrat of North Carolina, agreed. ”I don’t see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,” Mr. Watt said.

And it is more than a little disturbing that there was no mention of John McCain’s words before congress in 2006:

Federal Housing Enterprise Regulatory Reform Act of 2005

The United States Senate May 25, 2006 Sen. John McCain [R-AZ]: 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.

The Democrats killed this measure in Committee preventing the full Senate Vote.

Now, does this tell the whole story of what is happening to the housing and financial system in the United States?  I’m sure it does not.  Mostly what I hear is that it is “complex.” But it sure is unfair and misleading, to say the least, to note something that happened ten years ago without also stating what happened in 2003 and 2006.  The truth is in there somewhere.

Check this link http://cbs2chicago.com/business/fannie.mae.franklin.2.703253.html for some interesting facts about the aforementioned Franklin Raines, former CEO of Fannie Mae, or just Google him.  According to Wiki, Raines is currently employed by Barack Obama’s Presidential Campaign as an economic adviser. Recipients of Fannie Mae and Freddie Mac Campaign Contributions, 1989-2008 Top Three:

Dodd, Christopher J S CT D $165,400
Obama, Barack S IL D $126,349
Kerry, John S MA D $111,000

See all: http://www.opensecrets.org/news/2008/09/update-fannie-mae-and-freddie.html

September 19, 2008 update “In 2005– Barack Obama and the Congressional Black Caucus met with Fannie Mae for a “family” event. In 2005 Democrats also blocked reform of Fannie Mae”  And this little piggy went to market. This video is a must see. click link below:

http://www.youtube.com/watch?v=cLQU7uNR5bM

http://bellalu0.wordpress.com/2008/10/17/shocking-video-democrats-covering-up-fanniefreddie-scam-that-has-caused-our-economic-crisis/

http://sarah-palin-2008.blogspot.com/2008/09/busted-video-of-fannie-mae-ceo-in-2005.html

…..

http://sweetness-light.com/archive/bush-mccain-tried-to-reform-housing-finance

House of Representatives Committee on Financial Services: The Committee oversees all components of the nation’s housing and financial services sectors including banking, insurance, real estate, public and assisted housing, and securities. The Committee continually reviews the laws and programs relating to the U.S. Department of Housing and Urban Development, the Federal Reserve Bank, the Federal Deposit Insurance Corporation, Fannie Mae and Freddie Mac…..

http://financialservices.house.gov/who.html

Chairman, Barney Frank (D) and members which include both democrats and republicans

…..

U.S. Senate Committee On Banking, Housing, and Urban Affairs

http://banking.senate.gov/public/index.cfm?FuseAction=Information.Membership

Christopher Dodd, Chairman (D). Members, both democrats and republicans.

http://hennessysview.com/2008/09/15/franklin-raines-criminal-enterprise-and-barack-obama-his-accomplice/

…..

Posted:  09.17.08  Updated:  09.19.08  Updated:  09.24.08

52 Comments

Filed under John McCain, politics, Uncategorized

52 responses to “Bush and McCain Proposed Oversight of Fannie Mae and Freddie Mac

  1. diogenes

    Yeah, God forbid McBush be shown for what he is: a not-too-bright politician. There were just clips of him in Nov 2007 being asked questions about subprime mortgage lenders during what appeared to be a newspaper interview that was taped. He gulped, said “oh, boy” and stared like the proverbial deer caught in the headlights. After stalling (drinking water, clearing his throat, drinking some more water, clearing his throat some more) he actually answered: I’ll be honest, this is the Straight Talk Express. I wasn’t prepared for this question. I have no idea what the answer is. The interviewer tried to help McBush off the hook he stuck solidly up his ass by asking Did you have any idea the problem was this large? McBush responded No, I had no idea. I didn’t see this coming. But I didn’t see the dotcom bubble bursting, either. There’s a whole lot of economic things I haven’t seen coming. I just don’t have a good handle on it all.

    Wow. Just wow.

    And we want this guy to “solve” our massive problems in the corporate sector? ACtually, check that…. YOU want this guy, not me.

    • John

      The proposed and then final regulations re Fannie Mae and Freddie Mac was not to fix sub prime loans from being made. And it’s a reach to suggest that it had anything to do with sub prime loans. If you could even make a connection, then the proposed 2003 legislation was to increase sub prime mortgages by ensuring FNM and FRE didn’t run out of capital.

      Someone suggested, “The REAL Stinker here is that the … 2003 legislation that would likely have prevented both the Sub-Prime mortgage crisis..” which is a complete lack of comprehension of the proposed legislation.

      Whether Bush, Obama, Barney, whomever did or did not recommend or fail to vote for such issues with FNM and FRE has little to do with anything. It’s a totally useless point. It’s no more reasonable to blame either as it would be to credit either for anything regarding stopping the mortgage crisis or allowing it to continue with regard to stabilizing capital at FNM and FRE.

      First off, FNM and FRE don’t make loans. They purchase existing loans and resell them, allowing the originating bank to continue to make new loans.

      Due to low capital, FNM and FRE were at risk of not being able to continue to buy loans. Had they failed, the feared failure was that the credit markets would have frozen. So, even if we could make a connection between them and sub prime loans, then the legislation proposed by Bush (and there was nothing wrong with it) would have been to allow more sub prime loans to be made. Except for one issue, it seems FNM and FRE were not a major player in the repackaging of sub prime loans into mortgage backed securities. While they may have had some involvement, it remains unfair to say that they did unless demonstrated.

      So, while the Glass Segal Act was dismantlement for two decades starting in the 70’s and resulted in 1) the savings and loan failures it seems 2) Enron maybe 3) potentially the sub prime mortgage market, it is unfair to put Bush’s recommendation for legislation to bolster the capital of FNM and FRE into the same category. (I say potentially because I have yet to see any real evidence that the subprime mortgage loans would have been averted by the Glass Segal Act.

      And, dude, Bush sucked as far as I’m concerned. But the FNM and FRE legislation wasn’t it.

      God, people really such at making solid connections. You’ve got a better chance at understanding the science of AWG or the economics of the Health Care Legislation than you do this one. On this one, the argument pro and con are totally off the mark.

  2. Wordwaryor

    The REAL Stinker here is that the Democrats led by Barney Frank killed in 2003 legislation that would likely have prevented both the Sub-Prime mortgage crisis and this latest Wall Street Financial meltdown. And again in 2005 the Democrats led the way in rejecting reform of financial institutions proposed by John McCain.

    Also…. Barak Obama’s convention and election platform planks of increasing capital gains taxes and huge spending program promises (ie Universal Health Care, Govt paid college tuition, ) and all his other Income Redistribution programs juist got the air let out of their tires.

    So Obama is now running on campaign promises and programs that would DESTROY the weakened economy….. NOT improve it !!

    McCain and Palin are the best choices for reforming the mess the country is in thanks to the Democratic Congress and some crossover Republicans !!!

  3. A-rod

    diogenes, kind of like when the Obamessiah was asked about when he thought of the AIG bailout and he couldn’t even come up with a response. But without his teleprompter, there is much to The One – nothing but an empty suit with DNC strings attached.

  4. jim beam

    Mccain and Palin aren’t going to reform anything, except maybe nuclear preemptive war doctrine.

    The two parties are different wings of the same bird of prey. We are …… either way, and I will bet money on it.

  5. stubbystudios

    How is Obama seriously keeping a straight face when he keeps slapping the “more of the same” line on McCain …or anyone for that matter. This is proof positive he is just as guilty as the people he keeps wagging his finger at.

    Would somebody please make some sort of attempt to mask this or give some sort of excuse for Obama? Really, I want to see someone try it. Tell me how Mr. Change is going to fluff his way out of this one.

  6. diogenes

    It’s remarkable that Republicans can espouse free-market economics and let these quasi-monopolies operate with impunity, and then apply for the most massive of big-government/welfare programs when they screw up. That’s not the fault of Obama or any other Democrat.

    Bear Stearns, Fannie Mae, Freddy Mac, Lehman Bros., Merrill Lynch, AIG, $4/gallon gasoline, foreclosure crisis, etc etc etc

    You cannot blame all of this on Democrats, although you’ll undoubtedly try.

    • bob

      You sir are a fool. The companies which collapsed did what democrats told them to. Therefore, the goverment must help them. You can’t kill a company from your actions and let them fall.

      You can blame democrats for all of this, and you the typical democrat will undoubtedly try to deny it…Considering your party votes per their party about 90% of the time, whereas republicans tend to be split closer to 55% of the time.

      I swear…No independant thought whatsoever.

  7. bellalu0

    It shows who had judgment and foresight. In 2006 John McCain said:

    “For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac–known as Government-sponsored entities or GSEs…..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.”

  8. diogenes

    One day McBush is against a bailout, then the next day he favors a bailout, and the day after that he thinks Spain is a country in Latin America that is not friendly to the United States. McBush has gotten to the point where he will TRY to say and words his people put in his mouth, to the extent that McBush can.

    Did you see th eclip of him cracking himself up over the fact that fish hang out around the offshore oil rig he visited? Wow, fish in an ocean, who woulda thunk it?

  9. JEFF

    Social Wellfare taken to a new level – Subprime lending with nothing but “Stated Income” as proof of earnings. The lack of a Democratic controlled Senate to allow independent oversight of Fannie Mae and Freddie Mac and Pressure from this same Senate to increase home ownership has lead to this massive financial crisis.

    The way I see it this election is about two primary idiolgies. People who want govenment to be responsible/accountable for the descions an individual makes and those who insist upon being responsible/accountable for ones own descions.

    Those who won’t/can’t -vs- Those who do/can

  10. diogenes

    Oh, Jeff, PLEASE! The Democrats have controlled Congress for less than 2 years. The Republicans controlled it for years and years before that, and the GOP has had the presidency for 8 years. And you want to pin this on one party, the Democrats?

    Here is a simplistic explanation, that I heard on talkradio Friday, of what this nation is currently facing:

    The GOP is for tax incentives for corporations on the way up and the fatcats have their hands out.

    The GOP is then all for free-market economics once those corporations gain control, and the fatcats want hands-off.

    And the GOP is all for socialism when it goes to hell in a handbasket, when the fatcats have their hands covering their faces as they try to slink unnoticed out the back door.

    Yeah, all these investment banks just couldn’t help themselves, could they? It’s all the fault of those irresponsible first-time hopeful homeowners.

    If you’re so bent on individuals “being accountable/responsible for ones [sic] own decisions” how come you’re absolving all those investment bankers of any responsibility? THEY are the main culprits yet THEY are the ones escaping with their hides!

    • Anonymous

      Diogenes,

      Interesting… tax hikes on corporations cost the people who buy those goods and services, so, in essense that is a tax hike on us!

      The house knocked down that legislation, not the Bush Whitehouse, and yes… the house was controlled by democrats… so, whose fault is it that it never got anywhere. Nancy Pilosi specifically did not allow that bill to be presented… so, gee… I am absolutely certain that she is secretly controlled by republicans who just want to ruin the country. Give me a break.

      Do you own a house? I do… and guess what? I read every single word that was written on my loan document. AND I am more than willing for being responsible for my signature on those documents.

  11. CoultersAdamsApple

    The Republican party has been responsible for 9 out of the last 10 recessions/depressions. Google it.

  12. bellalu0

    Why did Bear Stearns fail, and how does that relate to AIG? It all seems so complex.

    But really, it isn’t. Enough cards on this table have been turned over that the story is now clear. The economic history books will describe this episode in simple and understandable terms: Fannie Mae and Freddie Mac exploded, and many bystanders were injured in the blast, some fatally.

    http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aSKSoiNbnQY0

  13. sinz52

    McCain was becoming concerned about Fannie and Freddie–but where was the rest of the GOP-led Congress? Tom DeLay, Dennis Hastert, Bill Frist, etc., could have picked up on McCain’s initiative and started an investigation and reform of Fannie and Freddie.

    But they didn’t.

    When the GOP controlled Congress in the 1990s, they could have made reform of Fannie and Freddie a prerequisite to further deregulation of the financial sector.

    But they didn’t.

    The Republicans just deregulated anyway. McCain may have expressed some concerns about Fannie and Freddie, but it’s clear that the rest of the congressional GOP wasn’t interested in following up on it.

  14. bellalu0

    And what were these people doing?

    House of Representatives Committee on Financial Services: The Committee oversees all components of the nation’s housing and financial services sectors including banking, insurance, real estate, public and assisted housing, and securities. The Committee continually reviews the laws and programs relating to the U.S. Department of Housing and Urban Development, the Federal Reserve Bank, the Federal Deposit Insurance Corporation, Fannie Mae and Freddie Mac…..

    Chairman, Barney Frank (D). And a host of others both democrats and republicans.

    http://financialservices.house.gov/who.html

  15. bellalu0

    And what about this committee?

    U.S. Senate Committee On
    Banking, Housing, and Urban Affairs

    http://banking.senate.gov/public/index.cfm?FuseAction=Information.Membership

    Christopher Dodd, Chairman (D). Members, both democrats and republicans.

  16. David

    Research showed that it was intiated bt Sen, Chuck Hagel and McCain was one of 3 co-sponsors and it never left comitee and died because it did not survive that session of congress. No Democrats were involved. Someone trying hard to re-write history?

  17. Alan

    I’m sorry I must have missed the part of the Congressional Record where Obama went on record asking for major reform of Freddie/Fannie.

    Truth be told, both the GSEs were Democratic pet projects (The past CEOs were ALL Democrats, who walked with millions and accounting fraud totalling in the BILLIONS) that had the noble goal of helping people who couldn’t afford a mortgage get one anyhow. And now the Ponzi scheme has collapsed.

    And the biggest insult of all is that Barney Frank is trying to save the day. Funny considering that he was Freddie/Fannie’s biggest supporter.

    You may have noticed that there was NO RESISTANCE for the Freddie/Frannie bailout from the Democratically controlled congress. They were all too eager to cover their tracks.

    Now that an election nears they are trying to look out for the little guy (the one they screwed by getting him into a mortgage that they cannot afford). They’ll do anything to get elected.

    Ironic that the word Mortgage comes from the French word for DEATH.

  18. Pat

    diogenes Just another liberal idiot in denial and not accepting the FACTS that the democrats are trying to change America into a socialistic country and padding their fat pockets on the way. If Obama is elected president, this country is going down. Open your eyes and start looking at the real facts. Think with your brain if you have one and not with emotion as you ALL do. The democratic party started changing after Pres. Kennedy and has gone to HELL>

  19. MOMO

    There’s no sense trying to talk sense into liberals. They have none. That’s why Obama can do no wrong in their eyes. They don’t even care that the guy votes NV (not voting) about 75% of the time. They think that is “leadership.”

    http://www.votesmart.org/voting_category.php?can_id=9490

    Fortunately, many of his supporters are the “not voting” type too…

  20. diogenes

    Before you talk too much about Obama’s voting record, check out McBush’s too. Today was nly the second day he’s been in the Capitol all year, and he’s voted only once or twice, I believe NV means Not Voting… not that the senator was present and not voting.

    Both guys have been campaigning for President, you know?

    You better hope that Pbama’s supporters are NV types, MOMO, or McBush gets blown out. But I wouldn’t count on it. Not from all the new voters I’ve registered. They’re coming to ME to register, I’m not going to THEM.

  21. MOMO

    Good, so you agree then that Obama has no real experience in Washington. Traveling around the country pandering for votes and making promises you can’t deliver on doesn’t equate to experience or leadership.

  22. No-Bama 2008 and beyond

    I think that Obama is about as far from the solution to our problems as we can get. He’s a tax-raising (read job killing), inexperienced (community organizer doesn’t count), gov’t increasing maniac.

    Its simple. De-regulation of investment banks (repeal of Glass-Steagal in 1999, signed by Clinton and supported by McCain) and the blind-eye oversight of Fannie/Freddie (see S. 190 in 2005 that was proposed by Bush and heralded by McCain) by Barney “I love boys” Frank is the number one cause of our economic woes. Both parties are to blame…end of story. So, what’s the answer?

    Is it Obama’s economic plan which provides discentives on both end of the economic spectrum (tax credits to low income folks, tax hikes to high income folks) that will increase unemployment, lower taxes collected and increase non-producing members of our society (our government). I don’t think so…and he is muslim

  23. diogenes

    Well, there’s no intelligent conversation to be had with any nitwit who is still spewing the “he’s a Muslim” line of crap.

    And MOMO? “Traveling around the country pandering for votes and making promises you can’t deliver on doesn’t equate to experience or leadership.” I tend to agree, so here’s my question: why is McBush doing it, then?

  24. bigmoe

    It is very difficult to have free and fair elections when you have a slavish and unfair media. And I agree with you Pat and Momo. Trying to have a rational conversation with a liberal is akin to trying to talk rationally to a 2 year old. Liberals have a supreme sense of elitism and self worth that precludes them from engaging in reasoned thought. They are ruled by emotion. That is part of the reason why I think Hollywood is so populated by liberals. Liberalism is a fantasy, much like Hollywood.
    Actors and actresses try to make you believe they are the characters they are portraying. In other words, they are perpetrating a fantasy. Just like liberals try to make you believe they are something other then what they really are. Hollywood is fantasy and so is liberalism.
    So remember, when you engage in a debate with a fool, then 2 fools become engaged in the debate.

  25. diogenes

    And when you can’t win a debate, call your opponent names. Straight out of Karl Rove’s playbook.

    So all liberals are unable to think rationally and live in a fantasy world? If the things liberals believe in are a fantasy, it’s only because BushCo has done its best to destroy what this country was founded on and what we’re supposed to be about.

    You cannot export democracy via invasion. You cannot promote freedom by repressive legislation like the laughably entitled Patriot Act. You cannot win a war on terror in Afghanistan by taking your eye off the ball and launching an invasion, a war of choice, in Iraq. You don’t champion human rights by promoting torture.

    This country wasn’t formed, this country wasn’t developed, on a system where the top 1/10 of 1% outearns the bottom 85%. Even in the era of the robber barons (I’m sure you would prefer the label “captains of industry”) the socioeconomic stratification was not as extreme.

    And bigmoe, I sincerely doubt that anybody who read your post could look at your words and not see them as anything but elitist.

  26. jason johnson

    2 Important facts left out:

    1. In 2003 both the House and Senate were Republican controlled. If your own party couldn’t get this passed, you can’t blame the party that was in the minority.

    2. Those that voted against it (both Dems and Republicans) made a very smart move. The bill, as it was proposed in 2003 (and again in 2005), sought to privatize the oversight of the bank lending industry. Privitizating the oversight of the lending industry was and remains completely the wrong thing to do.

    Isn’t it funny when you tell only half the truth it completely changes things? Republicans seem really good at that.

    Give people all the facts next time you facist.

    And start thinking about why the richest 1% and businesses only gets richer under Republican economics and why the the remainder gets only poorer and looses their jobs.

  27. jason johnson

    Mr. bellalu0 – Yes. I’m my haste and anger at so many Republican websites purposefully misleading the public on this issue, I did type recklessly and mis-spelled “facist”.

    However, the word, by definition is “someone with political ideology and concern with notions of cultural decline or decadence and with extremely conservative views.” Would you disagree that this word accurately describes the current members of the Republican party? If not, then I withdraw my comment.

    Onto the more important point of country….
    I’m with all your digging and research, i’m sure you must have come across the actual bill in question. As such I’m sure you have learned that this bills proposal was infact to privatize the oversight of the mortgage lending industry.

    Today that failure of the “bank lending” industry (which has ties to the “mortgage lending” industry) is largely due to its own in ability to self-regulate. If the failure of the private sector’s ability self-regulation is what is causing today’s finicial melt-down, how can anyone propose the notion that this proposal in 2003 (which would have privatized the regulation of the mortage industry) been good?

    Here’s what the bill said:
    Federal Housing Enterprise Regulatory Reform Act of 2005 – Amends the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 to establish:
    (1) in lieu of the Office of Federal Housing Enterprise Oversight of the Department of Housing and Urban Development (HUD), an independent Federal Housing Enterprise Regulatory Agency which shall have authority over the Federal Home Loan Bank Finance Corporation, the Federal Home Loan Banks, the Federal National Mortgage Association (Fannie Mae), and the Federal Home Loan Mortgage Corporation (Freddie Mac);

    Do you see? This bill was transfering any remaining oversight FROM the government TO an INDEPENDENT Agency. That meant it had NO FEDERAL OVERSIGHT.

    Wouldn’t you consider misleading that so many Republican blogs left this detail out? Wouldn’t you be concerned that your countrymen and women and their ability to make informed decisions when the facts presented on such blogs are misleading because they are incomplete?

    I do. When someone who has the ability to make inform the public and make difference in our society, but chooses to only represent half the facts, I do get upset. I do call that facism.

    However, as you mention, it is your blog. And my posts are your descretion, for better or worse. Feel free to delete whatever you like.

    • Anonymous

      Businesses tend to know how to run companies… whereas the government has lost incredible amounts of money for the investors in Social Security because they have opted to loot the funds…

      so, you think an industry that opts to loot the funds of the American People’s future should provide oversight for a financial institution? I think that is foolhardy.

      plus, the oversight committee already in place run by Barney Frank was obviously not doing a very good job… so, what should we do? Should we have an oversight committee to oversee the oversight committee already in place? Or should we have a private institution look into this and make suggestions?

  28. bellalu0

    I do thank you for providing that information.

    The fact remains that the house and senate committees who had the responsibility for the oversight did not do their jobs.

    “House of Representatives Committee on Financial Services: The Committee oversees all components of the nation’s housing and financial services sectors including banking, insurance, real estate, public and assisted housing, and securities. The Committee continually reviews the laws and programs relating to the U.S. Department of Housing and Urban Development, the Federal Reserve Bank, the Federal Deposit Insurance Corporation, Fannie Mae and Freddie Mac…..”

    Chairman, Barney Frank, and a host of members both democrats and republicans.

    and

    U.S. Senate Committee On Banking, Housing, and Urban Affairs

    Chairman, Chris Dodd, and a host of members both democrats and republicans.

    The very people who are now negotiating the bailout deal.

  29. jason johnson

    Agreed.

  30. diogenes

    Barney Frank, Chris Dodd, and the Democrats have been in control of Congress for the last two years. That’s all.

    We’ve had a Republican President for 8 years, and a Republican Congress for the first 6 of those 8 years.

    But OF COURSE it’s the Democrats sole fault.

    • bob

      The democrats still do not have the 60 seats needed in order to pass a bill with no resistance. You are a fool. If every single democrat voted against change, every single democrat was the cause of the problem. If 80% of the rebpublicans voted for it, 80% of republicans are the solution. Using numbers…The democrats are the problem.

      Next of all: If we can’t count the two years of democrats neither can we count the first two years of republicans, 2000-2002 don’t count, 2006-2008 don’t count…2002-2006? Is that your arguement? 2006 we had the most profitable year for banks in almost the entire U.S. History. That was from Bush. In 2008 loans which had been foolishly put in place in the 90′s collapsed, and the credit swaps on them collapsed, and everyone collapsed. That’s Bill Clinton.

      Loans do not collapse overnight, and overyone knows the ones that collapsed were not started because of Bush.

      In regards to your comments on Bush: He supported us doing as we choose. That’s what America is about. Read Thomas Jefferson. It does not go in line with ANY democrat theories. Democrats destroy freedom of religion. Democrats destroy the right to your own property. This foundation was not made in order to be communist and redistribute wealth. Those wealthy made the choice and effort to get where they are and you can make the same choice. You proved how against the founding fathers you are by accidentally stating the solution and a problem with that statement: Logically the only way to solve the top people having money is to not allow people to have the choice to get to the top. That’s wrong. People get to choose how they live. That’s the difference between democrat and republican.

      See: http://www.socastee.com/politics/rep_dem_diff.html for the real differences between republican and democrat.

      Democrats in office are power hungry. Democrats in day to day life want to believe the world is their enemy and everyone is at fault for their issues, problems, or failures, and businesses must be punished.

      Please. That’s pathetic. Grow a pair.

  31. vince

    This is my favorite spin story of this election season because it appears to be such a great smoking gun in support of the Bush Administration.

    But of course nobody puts the 2003 proposed legislation in context (Enron, Arthur Andersen, accounting irregularities, the allegations that executives in FM & FM were inflating profits to increase bonuses, which was not at the time linked to subprime market problems), the fact McCain stated in Dec 2007 he didn’t see this crisis coming, the many proposals for legislation regulating the mortgage industry from both parties, including Obama’s little known 2007 STOP FRAUD act, and the money Rick Davis received from Fannie Mae.

    A more informed politician will tell you it’s just as important to analyze your successes as your failures. The Bush administration had the power to retain the best of the best to consult and assess in the midst what appeared at the time to be a robust ecomony, but really was a massive housing bubble. There were plenty of those with Wall Street experience that understood the danger of mortgage securities.

    But the roots of the crisis were overlooked by both parties, so it’s a bipartisan share of the blame.

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  33. CHUPACABRA

    There are a lot of reasons that I am afraid of this upcoming election, but the one that has me the most afraid; is listening to dio”genius”, and the millions of minds just like his out there. And when i say minds while referring to this guy i mean idiots pure and simple. This guy has his head so far up Obamas a.. and everything the messiah claims, without claiming anything at all its just down right frightful.

    I really do wish McBush would come out during this next debate and lather mr. messiah with all corruptions that he has been apart of in his short life as a senator of our great nation. Have you heard dio”genius” about obamas affiliation to ACORN and what exactly ACORN is all about. This is where obama began his career as a community organizer, only ACORN is all about pressuring banks and other lending institutions into lending money for people with not so great credit in order to serve a political means. I dont know how old you are diogenius, and i would like to think that you are quite young; in fact young enough not too understand what it means to take on a mortgage and put everything you have into a home. And i would also like to think that if you did you might feel differently about what is happening. I wish there werent any poverty and that everyone could afford a home, everyone could get access to healthcare and the many other facets of our society that arent perfect but yet still better than any other country in any part of the world at any time.
    Democrats use class warfare to appease the emotions of those who are lazy dont feel like they are being treated fairly and looking for someone to blame. Obama isnt introducing any change at all to those who have read a history book, the things he is trying to convey to people have been democratic talking points for a hundred years. Its only change for the new crop of voters because they dont know anybetter. Democrats have had control of the congress for two years now and havent changed a damn thing, they have only blocked legislation that could have prevented much of this mess. Senators like Barney Frank, Chuck Schumer and Christopher Dodd are in the pockets of Fannie and Freddie and have much at stake when it comes to their oversight. Franklin Raines who now presides as Obamas economic advisor raked in 90 million dollars after fraudulently changing the accounting papers which claimed they were exceeding their quotas, which in turn gave him and others huge bonuses. To say that democrats are not solely at fault here may not be entirely true but they sure as hell are not innocent of anything involving the mortgage crisis or credit crisis. Obama talks of greed on wall street, when he and his cronie friends have taken in tons of cash from these GSEs Obama is number two on the list after only three years in the senate. And he has even spent just under one million dollars a day for every day he has been in office in pork barrel spending. Too the tune of some 980 million dollars, if you were a tax payer i would hope you would agree with me that this kind of lax spending with our dollars is just insane. I would like for maybe not all of you who think like diogenius but at least half of you to pull your head out of obamas a.. and open your eyes to envision something quite different than obamas empty proverbs and colon. Please look at the facts and dont take them as right wing smear campains, this guy, this messiah, is not what you think; he is a changer, he will be the most liberal and socialist president we have ever encountered, i am afraid it will be a game changer and the America i love could be lost for quite some time if not forever. Higher taxes and bigger govt are never the answer to a more prosperous society, use your heads, and think this through.

  34. CHUPACABRA

    The democrats had more seats on the Senate banking committee and thus could stop whatever legislation they wanted no matter who had control of congress as a whole. Dumbass. Bi partisan mess my left testy, This whole damn thing is stemed from redistribution of wealth the dems wanted to enforce. Govt interfears and screws up the system once again, i wish they would learn they dont help anything.

  35. Democrats Farming Votes, Black Republicans speaking up.

  36. bellalu0

    You are so right, cupacabra.

    The facts are right out there for all to see.

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  38. diogenes

    Chupcabra said “The democrats had more seats on the Senate banking committee and thus could stop whatever legislation they wanted no matter who had control of congress as a whole. ”

    Sorry, but you have NO IDEA what you’re talking about. Whatever party controls the Senate or the House automatically controls each and every committee, by getting the extra vote. That’s why it’s so important for both parties to get control of their body; it gets them control of the whole committee process.

    For instance, Barney Frank became Chair of the committee after the 2006 election, but before that, Mike Oxley (R-OH) was the chair.

    Despite the gratuitous and incessant anatomical references, I think I see Obama pretty clearly. And I would suggest that I probably see McBush better than many here, who suppport McBush simply because he is running against the guy who defeated their personal savior, St. Hillary.

    I don’t believe for a second that Obama is a Socialist, but he is certainly more liberal that Bush and McBush. Considering the mess we find ourselves in both domestically and internationally, I might suggest that Obama couldn’t hardly do a worse job than Bush and McBush.

    If there had been a more attractive candidate, I probably would have preferred Obama to get some more seasoning before running for President, but I sensed as soon as I heard him at the 2004 DNC convention that this guy would be the first serious African-American candidate for President. Despite the protests of the PUMAs to the contrary, Hillary wasn’t an acceptable option in 2008, as determined by millions of Democrats with whom I agree. Obama was the choice in 2008. McBush, on the other hand, may very well be the best of the Republican options, which says something about the GOP.

    America will not tolerate a Socialist governing our country; Obama, to the extent that he is too liberal, will be reined in, just like Bill LCinton was. But Obama has the intelligence and good sense to govern well. McBush has neither. He has, as politely as I can put it, a less-than-mediocre IQ, and many of his cognitive abilities, limited as they are, dissipated years ago. I voted for McCain in 2000, but there is NO WAY I would vote for McBush in 2008.

  39. diogenes

    Funny how facts usually shut down a PUMA in mid-sentence.

    Reviewing your 10th grade Civics textbook, Chupacabra?

  40. diogenes

    Hey, bella? You’ve gotten really proficient at deleting my posts, especially when I point out how your BFFs are flat-out wrong and are probably intentionally deceiving others into believing their misstatements. How about considering deleting some of their horribly erroneous and factually inaccurate nonsense — aw, screw it, their LIES ?

  41. bellalu0

    Settle down, diogenes.

    You’re getting a little hysterical.

  42. diogenes

    Yeah, it was stupid of me to think a PUMA might ever act reasonably. I should have realized that you’d “moderate” your forum in the least moderate tone you could find.

    But in 26 days, I’ll have my reward. And you’ll have a forum of (another inappropriate word by His Sweetness has been deleted), (and yet another one) and moaning about what went wrong.

    See? I’m calmer and happier already!

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  44. John

    The proposed and then final regulations re Fannie Mae and Freddie Mac was not to fix sub prime loans from being made. And it’s a reach to suggest that it had anything to do with sub prime loans. If you could even make a connection, then the proposed 2003 legislation was to increase sub prime mortgages by ensuring FNM and FRE didn’t run out of capital.

    Someone suggested, “The REAL Stinker here is that the … 2003 legislation that would likely have prevented both the Sub-Prime mortgage crisis..” which is a complete lack of comprehension of the proposed legislation.

    Whether Bush, Obama, whomever did or did not recommend or fail to vote for such issues with FNM and FRE has little to do with anything. It’s a totally useless point. It’s no more reasonable to blame either as it would be to credit either for anything regarding stopping the mortgage crisis with regard to stabilizing capital at FNM and FRE.

    First off, FNM and FRE don’t make loans. They purchase existing loans and resell them, allowing the originating bank to continue to make new loans.

    Due to low capital, FNM and FRE were at risk of not being able to continue to buy loans. Had they failed, the feared failure was that the credit markets would have frozen. So, even if we could make a connection between them and sub prime loans, then the legislation proposed by Bush (and there was nothing wrong with it) would have been to allow more sub prime loans to be made. Except for one issue, it seems FNM and FRE were not a major player in the repackaging of sub prime loans into mortgage backed securities. While they may have had some involvement, it remains unfair to say that they did unless demonstrated.

    So, while the Glass Segal Act was dismantlement for two decades starting in the 70′s and resulted in 1) the savings and loan failures 2) Enroll 3) potentially the sub prime mortgage market, it is unfair to put Bush’s recommendation for legislation to bolster the capital of FNM and FRE into the same category. (I say potentially because I have yet to see any real evidence that the subprime mortage loans would have been averted by the Glass Segal Act.

    And, dude, Bush sucked as far as I’m concerned. But this wasn’t it.

    God, people really such at making solid connections.

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