Fenton
DP Veteran
- Joined
- Nov 17, 2012
- Messages
- 29,771
- Reaction score
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- Gender
- Male
- Political Leaning
- Conservative
Cont...........
The Bush Blame and the Bank Blame is just the left partisan rhetoric to pull all the focus off of their party's massive documented influence..
2003 NY Times article.....
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. "
Key Democrats rejected..
”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.
Clinton from 1993 to 1998 replaced the Top Executive's at Fannie and Freddie, including Franklin Raines who for years misreported Fannie's earnings to maintain his target numbers. His bonus was based off of his target numbers....
The House Financial Services Committee began debate on September 11, 2003 and held multiple hearings over the next several weeks. In supporting the bills, Republicans focused on GSE’s potential impact on the broader financial system. Democrats focused solely on the mortgage lending targets, stating there was no risk to the broader financial system because the federal government would bail out the GSEs if necessary.
Sen. Charles Schumer (D, NY): “And my worry is that we’re using the recent safety and soundness concerns, particularly with Freddie, and with a poor regulator, as a straw man to curtail Fannie and Freddie’s mission.”
Rep. Maxine Waters (D-CA): “nearly a dozen hearings where, frankly, we were trying to fix something that wasn’t broke… In fact, the GSEs (Fannie, Freddie) have exceeded their housing goals. What we need to do today is to focus on the regulator, and this must be done in a manner so as not to impede their affordable housing mission – a mission that has seen innovation flourish, from desktop underwriting (no formal analysis) to 100% loans (no collateral).”
Rep. Maxine Waters (D, CA), speaking to Housing and Urban Development Secretary Mel Martinez: “Secretary Martinez, if it ain’t broke, why do you want to fix it? Have the GSEs ever missed their housing goals?”
On March 31, 2004, the day before the Senate Banking Committee was scheduled to begin debating GSE regulations, Franklin Raines had Fannie Mae run the following advertisement on national television. Featuring a worried looking Hispanic couple, a man said, “Uh-oh.”
Woman: “What?”
Man: “It looks like Congress is talking about new regulations for Fannie Mae.”
Woman: “Will that keep us from getting that lower mortgage rate?”
Man: “Some economists say rates may go up.”
Woman: “But that could mean we won’t be able to afford the new house.
Man: “I know.”
Rep. Barney Frank (D-MA): “I don’t want the same kind of focus on safety and soundness that we have in OCC (Office of the Comptroller of the Currency) and OTS (Office of Thrift Supervision). I want to load the dice a little bit more in this situation towards subsidized housing.”
Rep. Barney Frank (D-MA): “I think we see entities that are fundamentally sound financially and withstand some of the disastrous scenarios. And even if there were a problem, the federal government doesn’t bail them out.”
Rep. Gregory Meeks (D-NY): To OFHEO head, Armando Falcon, “The question that represents is the confidence that your agency has with regard to regulating these GSEs… Why should I have confidence; why should anyone have confidence in you as a regulator at this point?”
Rep. Gregory Meeks (D-NY): “I’m just pissed of at OFHEO (the regulator), because if it wasn’t for you I don’t think that we’d be here in the first place…you’ve given them an excuse to try to have this forum so that we can talk about it and maybe change the direction and the mission of what the GSEs had, which they’ve done a tremendous job.
Barney Frank (D-MA): “I worry about increasing the capital requirements…I’d like to get Fannie and Freddie more deeply into helping low income housing and possibly moving into something that’s more explicitly a subsidy (taxpayer money used as principle in subprime mortgages). My concern is that this would not what would be a regulator’s or Treasury’s idea of what would be the best way of promoting safety and soundness… “
Barney Frank (D-MA) even went so far as to suggest the issue of Fannie Mae regulation should rest in the hands of Fannie’s CEO:
Barney Frank: Let me ask [George] Gould and [Franklin] Raines on behalf of Freddie Mac and Fannie Mae, do you feel that over the past years you have been substantially under-regulated? Mr. Raines?
Franklin Raines: No, sir.
Barney Frank: Mr. Gould?
George Gould: No, sir. . . .
Barney Frank: OK. Then I am not entirely sure why we are here. . . .
From a 1999 NY Times Article....
“Fannie Mae, the nation’s biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.”
A HUD release after raising their Quota to 50% in 2000
" Because the GSEs have a funding advantage over other market participants, they have the ability to under price their competitors and increase their market share. This advantage, as has been the case in the prime market, could allow the GSEs to eventually play a significant role in the subprime market. As the GSEs become more comfortable with subprime lending, the line between what today is considered a subprime loan versus a prime loan will likely deteriorate, making expansion by the GSEs look more like an increase in the prime market. Since . . . one could define a prime loan as one that the GSEs will purchase, the difference between the prime and subprime markets will become less clear. This melding of markets could occur even if many of the underlying characteristics of subprime borrowers and the market's (i.e., non-GSE participants) evaluation of the risks posed by these borrowers remain unchanged."
A HUD release from 2004...
“Over the past ten years, there has been a ‘revolution in affordable lending’ that has extended homeownership opportunities to historically underserved households. Fannie Mae and Freddie Mac have been a substantial part of this ‘revolution in affordable lending.' During the mid-to-late 1990s, they added flexibility to their underwriting guidelines, introduced new low-downpayment products, and worked to expand the use of automated underwriting in evaluating the creditworthiness of loan applicants. HMDA data suggest that the industry and GSE initiatives are increasing the flow of credit to underserved borrowers. Between 1993 and 2003, conventional loans to low income and minority families increased at much faster rates than loans to upper-income and non-minority families."
Republicans in 2005 and their attempt to gain control of the out of control GSE's working under a HUD mandate..
Sponsor Chuck Hagel
1/26/2005--Introduced.
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); and
(2) the Federal Housing Enterprise Board. Sets forth operating, administrative, and regulatory provisions of the Agency, including provisions respecting:
(1) assessment authority;
(2) authority to limit nonmission-related assets;
(3) minimum and critical capital levels;
(4) risk-based capital test;
(5) capital classifications and undercapitalized enterprises;
(6) enforcement actions and penalties;
(7) golden parachutes; and
(8) reporting.
Amends the Federal Home Loan Bank Act to establish the Federal Home Loan Bank Finance Corporation. Transfers the functions of the Office of Finance of the Federal Home Loan Banks to such Corporation. Excludes the Federal Home Loan Banks from certain securities reporting requirements.
Abolishes the Federal Housing Finance Board.
Writen by the House Republican Conference "
It lacked the Senate votes and needed 5 Democrats to join the 55 Republican Senators voting for it. No Democrat crossed over..
The Bush Blame and the Bank Blame is just the left partisan rhetoric to pull all the focus off of their party's massive documented influence..
2003 NY Times article.....
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. "
Key Democrats rejected..
”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.
Clinton from 1993 to 1998 replaced the Top Executive's at Fannie and Freddie, including Franklin Raines who for years misreported Fannie's earnings to maintain his target numbers. His bonus was based off of his target numbers....
The House Financial Services Committee began debate on September 11, 2003 and held multiple hearings over the next several weeks. In supporting the bills, Republicans focused on GSE’s potential impact on the broader financial system. Democrats focused solely on the mortgage lending targets, stating there was no risk to the broader financial system because the federal government would bail out the GSEs if necessary.
Sen. Charles Schumer (D, NY): “And my worry is that we’re using the recent safety and soundness concerns, particularly with Freddie, and with a poor regulator, as a straw man to curtail Fannie and Freddie’s mission.”
Rep. Maxine Waters (D-CA): “nearly a dozen hearings where, frankly, we were trying to fix something that wasn’t broke… In fact, the GSEs (Fannie, Freddie) have exceeded their housing goals. What we need to do today is to focus on the regulator, and this must be done in a manner so as not to impede their affordable housing mission – a mission that has seen innovation flourish, from desktop underwriting (no formal analysis) to 100% loans (no collateral).”
Rep. Maxine Waters (D, CA), speaking to Housing and Urban Development Secretary Mel Martinez: “Secretary Martinez, if it ain’t broke, why do you want to fix it? Have the GSEs ever missed their housing goals?”
On March 31, 2004, the day before the Senate Banking Committee was scheduled to begin debating GSE regulations, Franklin Raines had Fannie Mae run the following advertisement on national television. Featuring a worried looking Hispanic couple, a man said, “Uh-oh.”
Woman: “What?”
Man: “It looks like Congress is talking about new regulations for Fannie Mae.”
Woman: “Will that keep us from getting that lower mortgage rate?”
Man: “Some economists say rates may go up.”
Woman: “But that could mean we won’t be able to afford the new house.
Man: “I know.”
Rep. Barney Frank (D-MA): “I don’t want the same kind of focus on safety and soundness that we have in OCC (Office of the Comptroller of the Currency) and OTS (Office of Thrift Supervision). I want to load the dice a little bit more in this situation towards subsidized housing.”
Rep. Barney Frank (D-MA): “I think we see entities that are fundamentally sound financially and withstand some of the disastrous scenarios. And even if there were a problem, the federal government doesn’t bail them out.”
Rep. Gregory Meeks (D-NY): To OFHEO head, Armando Falcon, “The question that represents is the confidence that your agency has with regard to regulating these GSEs… Why should I have confidence; why should anyone have confidence in you as a regulator at this point?”
Rep. Gregory Meeks (D-NY): “I’m just pissed of at OFHEO (the regulator), because if it wasn’t for you I don’t think that we’d be here in the first place…you’ve given them an excuse to try to have this forum so that we can talk about it and maybe change the direction and the mission of what the GSEs had, which they’ve done a tremendous job.
Barney Frank (D-MA): “I worry about increasing the capital requirements…I’d like to get Fannie and Freddie more deeply into helping low income housing and possibly moving into something that’s more explicitly a subsidy (taxpayer money used as principle in subprime mortgages). My concern is that this would not what would be a regulator’s or Treasury’s idea of what would be the best way of promoting safety and soundness… “
Barney Frank (D-MA) even went so far as to suggest the issue of Fannie Mae regulation should rest in the hands of Fannie’s CEO:
Barney Frank: Let me ask [George] Gould and [Franklin] Raines on behalf of Freddie Mac and Fannie Mae, do you feel that over the past years you have been substantially under-regulated? Mr. Raines?
Franklin Raines: No, sir.
Barney Frank: Mr. Gould?
George Gould: No, sir. . . .
Barney Frank: OK. Then I am not entirely sure why we are here. . . .
From a 1999 NY Times Article....
“Fannie Mae, the nation’s biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.”
A HUD release after raising their Quota to 50% in 2000
" Because the GSEs have a funding advantage over other market participants, they have the ability to under price their competitors and increase their market share. This advantage, as has been the case in the prime market, could allow the GSEs to eventually play a significant role in the subprime market. As the GSEs become more comfortable with subprime lending, the line between what today is considered a subprime loan versus a prime loan will likely deteriorate, making expansion by the GSEs look more like an increase in the prime market. Since . . . one could define a prime loan as one that the GSEs will purchase, the difference between the prime and subprime markets will become less clear. This melding of markets could occur even if many of the underlying characteristics of subprime borrowers and the market's (i.e., non-GSE participants) evaluation of the risks posed by these borrowers remain unchanged."
A HUD release from 2004...
“Over the past ten years, there has been a ‘revolution in affordable lending’ that has extended homeownership opportunities to historically underserved households. Fannie Mae and Freddie Mac have been a substantial part of this ‘revolution in affordable lending.' During the mid-to-late 1990s, they added flexibility to their underwriting guidelines, introduced new low-downpayment products, and worked to expand the use of automated underwriting in evaluating the creditworthiness of loan applicants. HMDA data suggest that the industry and GSE initiatives are increasing the flow of credit to underserved borrowers. Between 1993 and 2003, conventional loans to low income and minority families increased at much faster rates than loans to upper-income and non-minority families."
Republicans in 2005 and their attempt to gain control of the out of control GSE's working under a HUD mandate..
Sponsor Chuck Hagel
1/26/2005--Introduced.
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); and
(2) the Federal Housing Enterprise Board. Sets forth operating, administrative, and regulatory provisions of the Agency, including provisions respecting:
(1) assessment authority;
(2) authority to limit nonmission-related assets;
(3) minimum and critical capital levels;
(4) risk-based capital test;
(5) capital classifications and undercapitalized enterprises;
(6) enforcement actions and penalties;
(7) golden parachutes; and
(8) reporting.
Amends the Federal Home Loan Bank Act to establish the Federal Home Loan Bank Finance Corporation. Transfers the functions of the Office of Finance of the Federal Home Loan Banks to such Corporation. Excludes the Federal Home Loan Banks from certain securities reporting requirements.
Abolishes the Federal Housing Finance Board.
Writen by the House Republican Conference "
It lacked the Senate votes and needed 5 Democrats to join the 55 Republican Senators voting for it. No Democrat crossed over..
