I feel many politicians use welfare programs to build a voter base to further their career. Unfortunately this welfare group appears to be growing while the working class shrinks. Now we find many in this welfare class being financed by our tax dollars with what would appear to be a very brazen effort to steal this election. Yet we are told that it is an effort to deny minorities their right to vote. Someone should explain to these people that every right comes with a responsibility. No one on the left ever talks about responsibility. Every American (not felons and illegal immigrants) has the right to vote but the responsibility is to register legally and cast only one vote.

Every American has the right to any home they can afford. With that right comes the responsibility of choosing what we can afford and making the payments we agreed to when we signed the contract.

Fannie Mae and Freddie Mac should be disbanned or very strongly regulated and those responsible for this financial chaos should be punished along with the politicians aiding them in this effort.

Americans are fed up with partisan politics and unbridled greet and corruption. Thanks for sharing things we need to know.

It is traditional in conservative discussions of business policy NOT to blame companies simply because they are big. For example, AT&T once completed 99% of the telephone calls in the USA. Microsoft sells 70% of operating systems. Citicorp has a huge share of credit cards. Exxon Mobil is the largest company in the world.

In the mortgage business, Fannie and Freddie were BIG. Naturally they took a big share. But, although they were backed by the credit of the USA, the government equity that had formed them was paid back long ago. Although they are called government sponsored entities (GSEs), they were in effect private companies, And their mistakes were like other private companies. Not like government agencies.

You can point out, quite rightly, that if Fannie and Freddie fail, the US government has to pay off their bonds. Yes, but it turns out now that they are no different from any other company we consider too big to fail. If Citibank, Bank of American, General Motors were near to failing, we’d have to bail them out too. So being called GSEs doesn’t make them government bodies.

So, first they took a big share because they were big companies. Second, and because they WERE private for-profit companies, Fannie and Freddie did not buy sub-prime paper because it was composed of mortgages made to minority groups or poor people. They bought the paper because they thought it was going to be a profitable investment. In fact, when they bought the paper, they were competing to buy it with Wachovia, IndyMac, Washington Mutual, Etc, all of whom thought the same thing.

Third, as the subprime market soared, Fannie and Freddie’s share of the purchases declined, largely because they discovered or realized that they were limited to taking only the best of the sub-prime paper.

This will confirm:

“Between 2004 and 2006, when subprime lending was exploding, Fannie and Freddie went from holding a high of 48 percent of the subprime loans that were sold into the secondary market to holding about 24 percent, according to data from Inside Mortgage Finance, a specialty publication.

One reason is that Fannie and Freddie were subject to tougher standards than many of the unregulated players in the private sector who weakened lending standards, most of whom have gone bankrupt or are now in deep trouble.”

This quote comes from this article:
http://www.miamiherald.com/news/politics/AP/story…

Moreover, it is hard to say that sub-prime paper is necessarily caused by loans to minorities or to the poor. Some could have been on speculative real estate investments during the bubble.

This article shows the extend of speculation:

The Wall Street Journal February 6, 2008

Speculators May Have Accelerated Housing Downturn:Rising Number of Defaults

Also Could Complicate Effort to Help Homeowners

By RUTH SIMON and MICHAEL CORKERY February 6, 2008; Page B8

As lenders pore over their defaulted mortgages, they are learning that the number of people who bought homes as investments is much greater than previously believed. Such borrowers turn up frequently in analyses of loans that defaulted within months after origination.

In many cases, these speculators lied on loan applications, saying they intended to live in the homes in order to obtain more favorable loan terms or failed to provide the requested information. Roughly 20% of mortgage fraud involved “occupancy fraud,” or borrowers falsely claiming they intended to live in a property, according to an analysis by BasePoint Analytics, a provider of fraud-detection solutions in Carlsbad, Calif.

Another study, by Fitch Ratings, looked at 45 subprime loans that defaulted within the first 12 months even though the borrowers had good credit scores. In two-thirds of the cases, borrowers said they intended to live in the property but never moved in. Some home builders have come to similar conclusions: They now believe that as many as one in four home buyers in some markets were investors during the boom, up from their earlier estimates of one in 10 buyers. The high number of hidden speculators helps explain some of the problems roiling the housing and mortgage markets.

The loans backing these speculator purchases turned out to be riskier than ratings agencies and investors who bought mortgage-backed securities once thought. Investors tend to be more likely than borrowers who live in the homes to walk away from their purchases when home prices fall. “We couldn’t understand what was driving so many borrowers to default so early in the life of their mortgage,” said Glenn Costello, a managing director at Fitch. Much of the occupancy fraud was concentrated in markets such as Florida, Nevada and Arizona, where prices were appreciating by double-digit percentages annually, said Kevin Kanouff, president of Denver-based Clayton Fixed-Income Services, a unit of Clayton Holdings Inc. that reviews about seven million loans a month on behalf of investors. In Las Vegas, as many as 60% of the foreclosures last year involved non-owner-occupied homes, according to Applied Analysis, a real-estate-research firm.

End quote

Re Countrywide. Not only Couontrywide. It can be said that for every dime Fannie and Freddie spent buying up mortgages or, more important INSURING mortgages, Citicorp, Bank Of America, JP Morgan Chase, Etc – all would have more money to buy mortgages. Fannie and Freddie has $2.5 TRILLION in mortgage guarantees, which allows Citicorp and all the other banks and mortgage companies to buy more mortgages.

Those of us who have received mortgages with the participation of Fannie or Freddie (and there are MILLIONS of us) resent what you say. Without those two institutions, many of us would not be owning our homes.

It was not Fannie or Freddie’s fault that the value of homes have collapsed since the bubble. That was the fault of overbuilding, and the bubble itself was largely caused by speculation.

And Fannie and Freddie had nothing to do with credit default swaps, auction rate securities (which chopped down the value of several money market funds), the high rate of leverage of banks (sometimes 33-to-1), bank and investment bank assets held in “off balance sheet” companies, Etc. Who caused all that? The SEC’s “voluntary” regulation program, the Fed’s inability to discover 33-to-1 leverage, the administration’s lack of interest in regulating derivatives.

So you say that Fannie and Freddie were supporters of Democrats? Well, the American Bankers Association gave 59% of the $24.24 million it contributed over the period 1990-early 2008 to Republicans, according to OpenSecrets.com.

The Democrats called repeatedly for the regulation of commercial mortgage companies (which were responsible for 84% of the sub-prime mortgages)! Republicans wouldn't even consider it.

No, it was the Republicans who caused the financial crisis.

In this instance, the ignorance exhibited by 50% of the reading population regarding the culpability of the federal government for this entire financial crisis will continue until the conservative "slant" can find its way into print.