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<p>Agreed, but Freddie and Fannie are the PERFECT example of hidden earmarks gone awry. Nearly EVERY Congressperson (forget the White House) loved those agencies bcos they funded projects in their own districts which would have never seen the light of day.</p>
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<p>I had not heard that one. Are these congress initiated projects the ones who are going under and causing problems? Or are they stable projects? Any idea?</p>
<p>Does this have any implications for college student loans for the 2009 HS graduating class?</p>
<p>(trusting the the collective CC expertise!)</p>
<p>deflation = taxation to the middle class.</p>
<p>Hypocrisy, Dstark?</p>
<p>Seems to be the Republicans’ middle name.</p>
<p>Allmusic, if you had read my post, you would have known there was no hyprocrisy. Fannie Mae was created by a Democrat under government mandate. There is no freemarket on this issue. You sound like a broken record. At least try to examine the issue objectively if you can.</p>
<p>Razorsharp, how much is the bailout going to cost the taxpayers?</p>
<p>I rest my case.</p>
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<p>I don’t see how you can conclude this. If the cost of computers is going down, fuel going down, food going down, it means there is more money left in the pockets of consumers. Thus deflation is not a tax on the middle class, it is a windfall.</p>
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<p>Many billions of dollars. But not nearly as much as Medicaid costs the taxpayers. Does Medicaid show hyprocrisy too?</p>
<p>Do you consider people who overborrow the same as people who get old?</p>
<p>"To be fair, I don’t know that the free market would have created something like FNM if FDR had not created it. Even if the free market would have created FNM, it doubt the market would have created FNM at the time FDR created it."r</p>
<p>You may be correct. However, FNM and FRE were created to protect the Banks and not anyone else. FDR may have created these entities, LBJ denationalized them, and GWB bailed them out.</p>
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No, unless old people borrow. BTW, Medicaid is for poor people not just old poor people.</p>
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<p>The Fannie Mae web site says it was created:
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<p>Are you saying GWB should not have bailed them out?</p>
<p>^^No; but I believe there is an important role for the government. I’m not running or voting on anti-government, “throw the rascals out” platform.</p>
<p>razorsharp:</p>
<p>As LaFalum posted earlier, both Freddie and Fannie used to have rather strict formulas for when they would approve a loan. However, that meant that primary beneficiaries were the middle & upper classes who had good credit and/or down payments. However, folks in the 'hood didn’t necessarily have great credit scores or the cash for the downpayment, so Congresspersons (and the real estate industry) put indirect pressure on Freddie and Fannie to lighten up their requirements (but with a tacit federal guarantee, wink-wink, nod-nod) so they would back home loans in more districts and more constituents; but higher risk loans were the natural result. </p>
<p>The point is that BOTH parties have been sleeping in this bed for a LONG time.</p>
<p>private profits and public liabilities, don’t ya just love “free markets” lol</p>
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<p>Ok, fair enough. But isn’t the goal of having lower income people experience the American dream of homeownership a very very very good thing? Shouldn’t we be taking some risks to see that accomplished?</p>
<p>One of the last place i look for information on a company, is on a company’s website. One of the last place I look for information on a college, is a college’s website. </p>
<p>I don’t know if GWB should bail out FNM or FRE. He’s in a better position to answer that question. But its a fact that he’s [W] doing it, just like FDR and Congress created these entities. What do you think?</p>
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<p>Glad you asked. I am thinking that you have to play the hand you have been dealt. GWB can either bail our FNM or let them go under. If FNM goes under, wouldn’t that effectively end the mortgage market? If no one can get mortgages then the economy will go into depression.</p>
<p>On a sort of separate concept, if you look historically at periods of inflation, housing usually rises and creates a lot of paper profit for a lot of people. There were developers in Calif in the 70s who became millionaires by just sitting on property and doing nothing. Today we are seeing a lot of inflation but housing is stagnate. I have to wonder what the next five years will be like for housing?</p>
<h1>36. It was W’s goal to provide easy home ownership. (I cringed when I heard that speech, with a gaggle of ethnic groups standing behind him). Some risks perhaps, with OPM and entities willing to risk their money - just not mine.</h1>
<p>“We’ve had more Republican administrations than Democratic. Why were Fannie and Freddy not dismantled? because the public thought that government oversight was a good thing, and if things went wrong, as they did, the government would step in, as it did. Hurray for the government!”</p>
<p>Franklin Delano Raines (born January 14, 1949 in Seattle, Washington) is the former chairman and chief executive officer of Fannie Mae who served as White House budget director under President Bill Clinton.</p>
<p>The son of a Seattle janitor [1], Raines graduated from Harvard University, Harvard Law School; and Magdalen College, Oxford University as a Rhodes Scholar. He served in the Carter Administration as associate director for economics and government in the Office of Management and Budget and assistant director of the White House Domestic Policy Staff from 1977 to 1979. Then he joined Lazard Freres and Co., where he worked for 11 years and became a general partner. In 1991 he became Fannie’s Mae’s Vice Chairman, a post he left in 1996 in order to join the Clinton Administration as the Director of the U.S. Office of Management and Budget, where he served until 1998. In 1999, he returned to Fannie Mae as CEO, “the first black man to head a Fortune 500 company.”[1]</p>
<p>On December 21, 2004 Raines accepted what he called “early retirement” [2] from his position as CEO while U.S. Securities and Exchange Commission investigators continued to investigate alleged accounting irregularities. He is accused by The Office of Federal Housing Enterprise Oversight (OFHEO), the regulating body of Fannie Mae, of abetting widespread accounting errors, which included the shifting of losses so senior executives, such as himself, could earn large bonuses [3].</p>
<p>In 2006, the OFHEO announced a suit against Raines in order to recover some or all of the $50 million in payments made to Raines based on the overstated earnings [4] initially estimated to be $9 billion but have been announced as 6.3 billion.[2].</p>
<p>Civil charges were filed against Raines and two other former executives by the OFHEO in which the OFHEO sought $110 million in penalties and $115 million in returned bonuses from the three accused.[5] On April 18, 2008, the government announced a settlement with Raines together with J. Timothy Howard, Fannie’s former chief financial officer, and Leanne G. Spencer, Fannie’s former controller. The three executives agreed to pay fines totaling about $3 million, which will be paid by Fannie’s insurance policies. Raines also agreed to donate the proceeds from the sale of $1.8 million of his Fannie stock and to give up stock options. The stock options however have no value. Raines also gave up an estimated $5.3 million of “other benefits” said to be related to his pension and foregone bonuses.[6]</p>
<p>An editorial in The Wall Street Journal called it a “paltry settlement” which allowed Raines and the other two executives to “keep the bulk of their riches.” [7] In 2003 alone, Raines’s compensation was over $20 million.[3]</p>
<p>A statement issued by Raines said of the consent order, “is consistent with my acceptance of accountability as the leader of Fannie Mae and with my strong denial of the allegations made against me by OFHEO.”[4]</p>
<p>In a settlement with OFHEO and the Securities and Exchange Commission, Fannie paid a record $400 million civil fine. Fannie, which is the largest American financier and guarantor of home mortgages, also agreed to make changes in its corporate culture and accounting procedures and ways of managing risk. [8]</p>
<p>In June 2008 Wall Street Journal reported that Franklin Raines was one of several politicians who received below market rates loans at Countrywide Financial because the corporation considered the officeholders “FOA’s”–“Friends of Angelo” (Countrywide Chief Executive Angelo Mozilo). He received loans for over $3 million while CEO of Fannie Mae. [5]</p>
<p>[Franklin</a> Raines - Wikipedia, the free encyclopedia](<a href=“http://en.wikipedia.org/wiki/Franklin_Raines]Franklin”>Franklin Raines - Wikipedia)</p>