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Thread: Fannie wants 5 billion more.

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    Re: Fannie wants 5 billion more.

    Quote Originally Posted by 1Perry View Post
    I do not know anyone here saying it was all F&F's fault but for some reason the only defense is that FOX says it was all their fault and that's wrong. Really, if that's the best defense you can come up with you are on pretty thin ice.

    Getting caught cooking the books wasn't just a one time thing. Fannie Mae has made Enron look like an amatuer pick pocket. I've railed on Goldman Sachs also but for some reason we get these excuses that F&F weren't the only ones at fault.

    The government (correctly) went after Enron and brought them down. For some reason we are on the hook for who knows how many billions and nobody at Fannie or Goldman Sachs has been charged with anything.

    Hell, they went after Martha Stewart with more zeal.
    Perhaps the defenders of F&F are in bed with Barney Frank, pun intended.

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    Re: Fannie wants 5 billion more.

    The facts are very clear. F&F have very specific rules and regulations on which they can buy a mortgage from the banks. 80% of the sub-prime mortgage market did not meet said rules so could not be pushed onto F&F. That is why companies like Countrywide went belly up. Had the mortgages met the lending standards enshrined in F&F, then the banks would have been able to pass off the loans to F&F, making their loan giving risk free.
    And they needed a bailout why? They underwrote a lot of bad loans. They underwrote almost all of the market in 2007. Because they backed the mortgages they recieved much higher ratings then they deserved. Bad monetary policy is a big part of what is going on right now.

    No loan is risk free. Totally stupid statement. Passing it through the government doesnt make it so.

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    Re: Fannie wants 5 billion more.

    Quote Originally Posted by OpportunityCost View Post
    And they needed a bailout why? They underwrote a lot of bad loans. They underwrote almost all of the market in 2007. Because they backed the mortgages they recieved much higher ratings then they deserved. Bad monetary policy is a big part of what is going on right now.

    No loan is risk free. Totally stupid statement. Passing it through the government doesnt make it so.
    It is impossible for an underwriter to ensure that the lenders they are working with are in fact upholding the lending standards without the gift of foresight (which we have hindsight). This in my opinion was a total failure on the part of the SEC and in some aspects the Treasury Secretary. The blame cannot be passed to F&F.
    It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
    "Wealth of Nations," Book V, Chapter II, Part II, Article I, pg.911

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    Re: Fannie wants 5 billion more.

    Quote Originally Posted by AdamT View Post
    No one said that it was okay. But the fact that they were partly to blame is no reason to lose sight of the big picture.
    The big picture is that they are dishonest and unaffordable. It is a racket.

    The USA has a huge debt problem and the idea that these crooks can come back to the taxpayer for more money, and actually have those who support this insanity, tells me that the decline has set in and recovery is unlikely. Only when adults are put in charge can the the United States possibly recover.

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    Re: Fannie wants 5 billion more.

    Quote Originally Posted by OpportunityCost View Post
    And they needed a bailout why? They underwrote a lot of bad loans. They underwrote almost all of the market in 2007. Because they backed the mortgages they recieved much higher ratings then they deserved. Bad monetary policy is a big part of what is going on right now.

    No loan is risk free. Totally stupid statement. Passing it through the government doesnt make it so.
    Actually, F&F underwrote only about 25% of the subprime and Alt-A loans by the end of the bubble, while non-GSE lenders underwrote the other 75%. And the 25% that F&F underwrote were of higher quality.

    It's important to remember, btw, that subprime and Alt-A loans aren't inherently bad. They can be reasonable investments if the underwriting is done correctly and the derivatives are properly rated.

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    Re: Fannie wants 5 billion more.

    Quote Originally Posted by Goldenboy219 View Post
    It is impossible for an underwriter to ensure that the lenders they are working with are in fact upholding the lending standards without the gift of foresight (which we have hindsight). This in my opinion was a total failure on the part of the SEC and in some aspects the Treasury Secretary. The blame cannot be passed to F&F.
    F&F have both been hit over and over for fudging the books. Maybe you are right and they are simply eternally clueless. That's an arguement for ending them though.

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    Re: Fannie wants 5 billion more.

    Quote Originally Posted by AdamT View Post
    Actually, F&F underwrote only about 25% of the subprime and Alt-A loans by the end of the bubble, while non-GSE lenders underwrote the other 75%. And the 25% that F&F underwrote were of higher quality.

    It's important to remember, btw, that subprime and Alt-A loans aren't inherently bad. They can be reasonable investments if the underwriting is done correctly and the derivatives are properly rated.
    But they weren't. That's the bad part. Yes, there are people who can benefit from sub prime loans. Too bad that so many screwed that up for them.

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    Re: Fannie wants 5 billion more.

    Quote Originally Posted by AdamT View Post
    Actually, F&F underwrote only about 25% of the subprime and Alt-A loans by the end of the bubble, while non-GSE lenders underwrote the other 75%. And the 25% that F&F underwrote were of higher quality.

    It's important to remember, btw, that subprime and Alt-A loans aren't inherently bad. They can be reasonable investments if the underwriting is done correctly and the derivatives are properly rated.
    Can I see any sort of source from you on this info? It doesnt seem to be accurate with what Im reading from several sources.

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    Re: Fannie wants 5 billion more.

    Quote Originally Posted by OpportunityCost View Post
    Can I see any sort of source from you on this info? It doesnt seem to be accurate with what Im reading from several sources.
    Yes, I would like to see it also.

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    Re: Fannie wants 5 billion more.

    Quote Originally Posted by Goldenboy219 View Post
    It is impossible for an underwriter to ensure that the lenders they are working with are in fact upholding the lending standards without the gift of foresight (which we have hindsight). This in my opinion was a total failure on the part of the SEC and in some aspects the Treasury Secretary. The blame cannot be passed to F&F.
    Thats why you dont trust the dang government to do it. You let government oversee the people that take the risk in doing so and if they fail, tough cookies. They then declare bankruptcy and the market learns that its a bad investment and doesnt do it again. The problem is government intervention and socialization of the risk both through bailouts and underwriting of the home mortgage market.

    Thats kind of my point, if the government cant be blamed in forseeing something in the realm of business, they should only oversee that business as required by our system of government and let the market work with its ups and downs. The downs are gonna suck but thats to remind business what risk means. They live and learn or they dont live as an ongoing business.

    Government is supposed to be the ref, not one of the teams on the field.

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