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  • Morning Bell: Fannie and Freddie Failure Forever

    Yesterday, Sen. Chris Dodd (D-CT) told reporters about his financial regulation bill, “We’ve ended the ‘too big to fail’ debate. So no longer do I expect any argument to be made that this bill exposes the American taxpayer.” Really. Someone might want to tell Sen. Dodd that in other news yesterday, Freddie Mac announced that it lost another $6.7 billion in the first quarter of 2010 and therefore needed another $10.6 billion in cash from U.S. taxpayers. Since formally nationalizing Freddie in 2008, the federal government has already spent $50.7 billion bringing the Freddie bailout total to $61.3 billion so far. Combined with Fannie Mae’s raid on the Treasury, the Congressional Budget Office estimates that the American people will spend $389 billion bailing out the two Government Sponsored Entities by 2019. So much for American taxpayers no longer being exposed to “too big to fail.”

    In fact, nothing in the Dodd bill does anything to reform Fannie Mae and Freddie Mac. This despite the fact that Fannie and Freddie were key components in causing the very financial crises Dodd claims his bill will forever prevent. Fannie and Freddie were both created for the specific purpose of making it easier for Americans to buy more expensive housing. Starting in 1993, political forces pushed Fannie and Freddie to loosen their once strict loan purchasing requirements. By 1996, regulations required that 40% of all Fannie and Freddie-bought loans must come from individuals with below median incomes. In 1995, Fannie and Freddie began buying subprime securities originally bought and bundled by private firms. One of these firms was Countrywide Financial who, thanks to their status as Fannie Mae’s biggest customer, delivered investors a 23,000% return between 1985 and 2003. By 2004, Fannie and Freddie were purchasing $175 billion worth of subprime securities per year from Countrywide and their brethren…  a 44% share of the entire market. There are other factors that helped contribute to the 2008 financial crisis, but Fannie and Freddie’s use of their “too big to fail” status to create and grow the subprime security market was essential.

    But Sen. Dodd, who received V.I.P. treatment from Countrywide CEO Angelo Mozilo, never saw any problem with Fannie and Freddie. On July 13, 2008, Senator Dodd said on national television, “To suggest somehow that [Fannie Mae and Freddie Mac] are in trouble is simply not accurate.” Less than two months later the bailouts of Fannie and Freddie began. Keep these facts in mind when Dodd says his bill solves the “too big to fail” problem.

    The problems with the Dodd bill go beyond its failure to let Fannie and Freddie wither into extinction. While Dodd has agreed to get rid of the $50 billion bailout fund, the underlying bailout authority still remains. Now taxpayers are expected to front the government money while firms are liquidated. But the irresponsible creditors who let those firms borrow money irresponsibly would still be eligible for taxpayer bailouts. According to The Washington Post, “a failing firm would be forced to pay back the government any money they received above what they would have gotten under a bankruptcy proceeding.” But how does the government know what creditors would have got if the company went into bankruptcy? Why not just strengthen the existing bankruptcy system and actually allow these too big to fail firms to, ya know, fail?

    But Dodd and the Obama administration would never allow that. It would defeat the whole purpose of this financial regulation bill, which is to transfer as much power to the federal government as possible. Never mind that these are the same government regulators who failed to see the last crisis coming.

    Quick Hits:

    Posted in Ongoing Priorities [slideshow_deploy]

    69 Responses to Morning Bell: Fannie and Freddie Failure Forever

    1. Warren Lyckman Hills says:

      What happened to the requirement that to purchase a home on credit required that you pay 10% down? Then the FHA would guarantee the loan to the bank issuing the loan. That was how I purchased my first home in 1953. The 20 year loan was paid out in full without ever missing a payment on time.

    2. bigdave ocala fl says:

      If we had an HONEST and OBJECTIVE News Media, rather than a CORRUPT AND CONTROLLED conglomeration of democrat shills, this Fannie and Freddie thing would have been over long ago, and the thieves/crooks, like Barney Frank, Chris Dodd, Jamie Gorelick, Franklin Raines and others, would not have sucked out MILLIONS OF OUR DOLLARS, and the true culprits in this wealth transfer scheme would be hopefully locked up for crimes against the people! This country is being stripped of its wealth on a daily basis, the LAW MAKERS side with the LAW BREAKERS and guess who's side this woeful media is on…RIGHT! They side with the LAW BREAKERS!! AGAINST THE AMERICAN PEOPLE! They MUST be held accountable. If HERITAGE is going to GROW STRONGER, start naming names and call out these people!! They are destroying our country.

    3. J.C. Hughes, Texas says:

      Leftist lawyers like Obama and Dodd, don't give a hoot about working Americans. Their focus is totally inward. Their egocentric view of themselves goes something like "Look, it's a bird, no it's a plane, no wait, it's Senator Dodd who'll vanquish entrepreneurs and give it to the masses. Sound familiar? Sounds like a classless ideology to me. I don't know HF's view on this, but we're talking Marxism. Except with Dodd and Obama, it's more Soviet style. Don't want to mess with their club membership.

    4. Upset, NC says:

      "too big to fail" Makes no more sense then awarding the win in a running race — to the fattest guy running because he's just bigger!

      No matter how you slice it you are rewarding the loser. Name one time in human history where that worked.

      How about some good old Darwinian "Survival of the fittest" for business?

    5. Lloyd Scallan - New says:

      Dodd (a Dem) is now beyond the voters reach now that he is retiring. He just took the money and ran. But what about the comments by Barney Frank. He

      is beyond the voters because he is not only a Dem, but gay. Anyone would be accused of "gay bashing".What about Franklin Raines, former head of Fannie? He is not a politican and does not have to worry about voters. But he is black,

      so anyone who attack would be accused of "racism". Oh, he is also a Dem.

      Yet he is not going away. He is tied up in the CCX (Chicago Carbon Exchange)

      along with Obama and Gore. Does anyone see a "pattern" here?

    6. Norma, Missouri says:

      The truth about Fannie and Freddie is right there, in the face of everyone. The only way to solve this is to get rid of Dodd and everyone else in Congress who are involved in this plot to give the government complete control. VOTE THEM OUT!

    7. J.C. Hughes, Texas says:

      It's time to stop being polite. Do be civil, but expose these leftist administrators and legislators for what they truly represent. There you'll find the reason America's federalist principles are null and void in their world.

    8. walt roginski, glen says:

      The govt should sue dodd, frank, and reins torecover the millions these guys profited thru bonuses or sweatheart loans to them and family.

    9. ROY S. MALLMANN II S says:

      I, for the life of me, do not understand why all these people are not under idictment. Oh, I forgot, this administration and some past, seem to believe that they only have to follow the laws that further their political agenda, like,…"Immigration reform" If they had continued to follow and enforce the current 58-year-old immigration law, currently on the books, we wouldn't need "immigration reform", now would we? If the laws on financial dealings such as credit requirements, were followed, we wouldn't need financial "reform" now would we?

    10. Tom Howe - Hotchkiss says:

      At least GM has paid back 8 billion (not all – as advertised) of their 61 billion bail-out. Why is it I'm not feeling good about that either…….

    11. Wildcat from Dallast says:

      I firmly know the ONLY thing too big to fail is THE UNITED STATES OF AMERICA!

      Along with (actually) eliminating “Too big to fail” we need to add, “Too unethical, too arrogant and too stupid to serve” as it relates to Sen. Dodd (D) Connecticut and his overt lack of the requisite ethics combined with his abundance of stupidity to serve in the Senate or anywhere where the absence of adult leadership is present. His arrogance lives on even though his running buddy past away last year.

      He appears to slither though the halls of power unapologetic from is waitress sandwich making days with the late Sen. Ted Kennedy (D) Massachusetts to the present and relatively untouchable. Well, that is until a republican with ethics and the stones to campaign, win and then serve with ruthless integrity enters the mayhem.

      Here is one more example of an inconceivable regulation that is called one thing but in the light of day means another that needs to be added to the list of “Repeal and Replace”. The good news any ridiculous law he produces can be repealed without a mega-page monstrosity but a simply written statement of repealing law number “X”.

    12. Henry McDonald says:

      We can only hope that after the elections in November, enough non Socialists will be in power so that a PROPER investigation of this economic atrocity can take place and that guilty persons like Dodd, Frank, Cuomo, Meeks, Waters, etc will be brought to justice.

    13. gorio, calif. says:

      One would think that something as important as finreg would get a blue ribbon panel of financial "experts" and get lots of public input so that ALL of the real problems can be addressed in a way that reflects the many sides/questions on the subject. There is little doubt in most peoples minds that freddy and fanny had a pivitol role in the recent meltdown yet they are not dealt with in the finreg! This is just a rehash of how the healthcare was handled and if the remaining republicans don't want to get thrown out with the other trash they better demand a panel and MORE public input and that freddy and fanny be addressed FIRST, not last! This is their LAST HURRAH if they screw it up and give away their "bipartisanship" for 30pieces of silver.

    14. BMFPitt, NJ says:

      "Failure" implies that they are accomplishing something other than what they are trying to. If you think that Fannie & Freddie aren't doing exactly what they want to be doing, then you don't have any understanding of what the problem is.

    15. Carol reffinger, Red says:

      Heritage guys,

      Morning Bell is coming through just fine. Have you made a list of all of the piggy-back bribes and cost to public that were part of getting Obamacare through congress – I'd love to see a Morning Bell on that one. (At least the ones we know about. I hate to think of how many others are hiding under the covers).

      And I'd love to see a Morning Bell on the chances of terrorist activity resulting in immediate loss of citizenship and how that might assist police in clarifying whether to read these bums 'rights' before questioning. A USA lable might not be engraved on foreheads, but actions speak clearly. That's almost as confusing as telling our border patrols and military that they are not supposed to use weapons. Groan.

      Thanks for all your efforts – now if we could just pound some of your scholarship and common sense into Obama and friends. Wouldn't hurt congress either. Carol

    16. R. Lile, New Philade says:

      My comment is a short question which is no doubt very complicated to answer: Simply, to whom and where did the billions and billions of dollars go which those who pay taxes to the U.S. I.R.S. will now "repay"?

    17. Roger / Clarence, NY says:

      It is true that Government – on every level – is responsible for the economic failure in housing. But it is also true that not everyone should own their own home when there is no way they will be able to pay for it. Several things are included here; e.g. income-earning power and unreasonable lifestyle expectations. It is totally unreasonable and illogical to believe that "every American 'deserves' to own a house. The electronic and print media are always telling the public that they deserve everything. I am less than a year away from being 70. I have never owned a house. I did very well on raising a family, seeing my children were educated, and all without government handouts. I live in a modest 12 X 60 mobile home and have no indebtedness other than monthly utilities. And my wife and live very comfortably. We do not subscribe to "man's economy," but rather we have chosen to live under GOD'S economy by tithing on our gross income and giving additional "offerings" to para church ministries and world missions. HE is our LORD and we are HIS stewards.

    18. Elayne Stroud, Atlan says:

      Did they fail to see the financial crisis coming, or did they cause the economy to fail right before the election?

    19. Elayne Stroud, 4303 says:

      Did they "fail to see the financial crisis coming", or did they cause it to happen right before the election?

    20. Richar Cancemi, Arli says:

      I am so sick of the lies that spew forth from all these politicians' mouths! Every day we are inundated with their flim-flam hucksterism. The biggest tragedy is the ignorant public who, like sponges, absorb the lies.

      How do we rid ourselves of these verminous politicians? Too many ignorami are able to vote ignorantly! And their numbers are growing thanks to the media and dumbed-down education (indoctrination).

      The Republican Party must go on the offensive with Conservative (Constitutional) principles to counteract the Socialist Obama, and on down the line! Yet the Republicans too, have failed the American people! Where are our Patriots? Or is it to be: "America be damned"?

      Do we need a 1776 revolution?

    21. Al Smith says:

      Say something about Cinco de Mayo not being a National Holiday in Mexico we dont even get the day off, Can you do a littyle story about the Beer Co that started this JOKE$. Thanks

    22. Duncan Druhl says:

      If the politicians in Washington want us to believe that they are soooooo stupid that they didn't see the crisis coming, then why oh why do we elect the bottom-feeding intellects? Is it one of those jobs nobody but the intelligence deprived will do? My view is that it is one of those jobs only the integrity-deprived will do, but that is another story.

      Further, if they want you to believe they didn't see it coming, why on earth would you put their severely limited intellect back in a position of deciding what is best for you?

      Are you (the voting public) that thick, too?

      Even people in the administration-everyone-wants-to-hate were saying that the risk factors were far too large to manage responsibly. A deaf, dumb, blind Hog could see the crash coming, so why didn't the people we pay to protect us?

      Oh, they were too busy shorting the Banks they knew that were going down. Oh, I understand now. So, there was inside information. So it is just their public fiduciary duties that they were ignoring.

      That makes it all right, then?

    23. Gene Douglas, TN says:

      Why do we continue to let these people get away with what is obviously criminal activity. Dodd and the rest are so secure in the the knowledge that they will not be held accountable they no longer care how blatantly dishonest, unethical, and illegal their actions are. We are to blame for allowing it then voting them right back in office.

    24. Dick Robinson, Roswe says:

      I agree with Roger. This idea that everyone is entitled to have a house is absurd. This is entitlement thinking….wrong! This socialistic idea pushed by the Clinton administration to get Freddie Mac to stand behind mortgages given to low-income homebuyers who did not show an ability to make the mortgage payments is absurd. I have owned several homes over 47 years and never made a down payment of less than 10%. This is just sound business practice. Now that the Federal Government has refused to use good business practices, it is now costing the American taxpayer billions of dollars….wrong!

    25. randydutton says:

      WHEN will we see criminal investigation by the Justice Department or ANY law enforcement agency? Ever? Has our judicial system been so corrupted such that investigators won't even bother to do their jobs?

      A political mafia is running America's finances. What will it take to wake up the public?

    26. bigdave ocala fl says:

      KB in Pa is CORRECT! Obama will SUSPEND ELECTIONS when his time comes up…count on it! Why do you think there is such a rush for EVERYTHING ANTI-AMERICAN, ANTI-TAXPAYER, ANTI-GROWTH, ANTI-JOBS, ANTI-ENERGY PRODUCTION(which brings everything else to a grinding halt!), ANTI-WHITE MIDDLE AGED MALE(you are now the REAL BAD GUYS PER OBAMA AND NAPOLITANO!), ANTI-CHRISTIAN(balanced by PRO-MUSLIM…look at the thirteen story mosque proposed in NY City in one of the buildings "they" destroyed on 9/11 !!!), and MORE!! Question: Have you ever seen, in your lifetime, an administration so COMPLETELY INCOMPETENT AT EVERY SINGLE LEVEL?! And "they" tell "us" how much taxes we must pay to suit their corrupt schemes?! The NY Times gives the terrorist a "pass" cause he lost his home boohoo. Will they give a pass to white middle aged males who suffered the same? Don't count on it! Our GOVERNMENT, OUR PRESS, and OUR MEDIA: ALL IN THE TANK FOR SOCIALISM! And!…at their own expense…they don't know history!

    27. Pingback: The Cloakroom » If you want a friend in Washington, buy a president

    28. Ben C. Ann Arbor, MI says:

      It appears to me than Wall Street, Goldman-Sachs et al are way smarter than Senator Carl Levin et. al. The only area of guilt for Goldman-Sachs is taking advantage of a policy put into place by Congress. It appeares to me that Wall Street was smart enough to realize that what Congress demanded from Freddie and Fannie was unsustainable so Wall Street hedged their bets and played both sides. If being smarter than Congress is a crime then they are guilty as charged.

    29. William D. Jackson says:

      Hey, not so fast ! The largest "fund" that's too big to fail is Social Security. Why can't they give back the monies that has be Stolen from the fund in the past 50 years ? Isn't Social Security Too Big To Fail ? I'm 70 years old and still having to work in order to earn enought to Pay Taxes and Live. While they (Mr. Dodd) is giving out all our tax dollers to these Big Corps., why not give some back to All the Senior Citizens who shouldn't be ignored doing all this Give Away ? America's the Greatest Country in the World ! And to have the Greedy, and Self Center fools destroy what we've all Lived and Died for is Treason!

    30. John R. Turner, Arizona says:

      There is no such thing as a business that is too big to fail. Most business failures are due to poor management, this being the case the corporation should re-structure its management team in an effort to save their business. Failing that they should then have to go through what any other business has to, Bankruptcy.

      For the U.S. to bail out these corporations with taxpayer money is taxation without proper representation.

    31. Pingback: Figure of the Day-10.6 Billion for Freddie « Points and Figures

    32. KB in PA says:

      Indeed, we are hanging by a thread over the cauldron of The Next Crisis, and this one will dwarf the previous/current one. But take heart. Ever whispering in the ear of BHO is his Chief of Staff, reminding him of their stock in trade: “Never let a serious crisis go to waste.”

      Of course all the power that can be possibly grabbed, is being grabbed. They know there is no time to lose. After all, once this administration has become the overlord of what little is left of the private sector, then it can proclaim itself as “Too Big To Fail.” Can it not? After all, you don’t seriously think they’re going to all this trouble so they can cheerfully hand it all over to someone else, as the result of something as absurd as an election? Do you?

    33. Linda F. says:

      Don’t bailout another company. They need to learn to stand on their own 2 feet and not expect us to do without so that they can TRY to succeed.

    34. Lil, San Diego says:

      I believe Heritage published a list of the contributions politicians received and, if I am not mistaken, both Dodd and Obama received major monies from these people. So how can Dodd be trusted to create a balanced bill?

      bigdave ocala excellent point! When is the msm going to begin the truth regarding Fannie & Freddie and their accomplices in the Senate and House as well as the White House?

    35. Zack says:

      Subprime lending increased from 6% of the total market share in 2002, to 20% in 2006.

      So Conn, about that other 80%-94%(completely free market based) housing market share for ten years that the government never ever ever touched…?

      The bottom line is that when Fannie and Freddie were at ends to fall apart, conservatives and republicans had the house, senate and presidency and did absolutely nothing to fix the problem. "Sponsored bills out of sub-committee's" hold no water. Actions speak louder then words and as far as the conservative/republican house, senate and presidency I didn't see a finger lifted.

      This housing crisis was pure capitalism locked by conservative policy in it's most disastrous form. Pathetic and beyond pardon.

      All of you that choose to blame Government, Carter, Clinton and somehow Obama have a great deal of research to do.

      As much as I want to believe in free market, sometimes this is the kind of mess that free market creates. Corporate American greed will not get a free pass. Government is not always the answer either. The government has and will continue to make mistakes but the housing crisis aint one of them.

      This is the typical american (take what profit you can, screw everyone else and run) idea that happened here, nothing else. Government programs regulating lenders to make small loans available to lenders that would otherwise not reach out to them is the least of the problem. Drop Heritage and do some real research.

    36. Dave, Provo, UT says:

      Don’t worry it can all be pinned on Bush because the Democratic congress won’t accept one bit of blame. If this is not enough to send every congressman home who fails to quickly call for investigation and punishment of the whole quasi government housing mess (including FHA) then we deserve to have another two years of chicanery, lies, cronies and pocket lining legislators like Barney Frank and his ex.

    37. Joe Schiraldi, Texas says:

      Isn’t this the same Dodd that vowed a filibuster of an attempt by then President Bush to fix Freddie and Fannie? Same cast only more flim-flam. Vote the bums out in November.

    38. Blair, Franconia, NH says:

      Privatize Fannie and Freddie.

    39. Zack says:

      #1- From the 103rd-109th congress, controlled by conservatives and republicans, not a single bill for housing regulatory reform was passed into public law. They did nothing. Don’t try the old “well, Democrats blocked the measures” because I know my legislative history extremely well, and as I just said, republicans and conservatives had the overwhelming majority. Besides, when did one banking committee chair have power over the entire House and Senate Majority?

      #2- Less then 15% of the entire housing market share in the U.S. was subject to C.R.A or any other Government regulation.

      #3- C.R.A. or any other government program never “forced” any lenders to qualify to anyone who didn’t go through credit qualification or debt to income ratio. The entire idea was to get small loans to people with small incomes that lenders choose to not reach out to. Discriminatory lending practices actually happened and still do which everyone here seems to magically forget. That was the entire reason the government stepped in. And if these “big bad government programs” like C.R.A. were so bad, then why did they have no problems at all for over 30 years?

      “Never mind that these are the same government regulators who failed to see the last crisis coming”

      …hmmm, do you mean the 12 years of conservative/republican congressional control that had unlimited power to avoid this crisis or the fact that it happened while they were in complete control? or, using one quote by Dodd or Frank against the neglect and complete inactivity to do anything for the housing market in the entire conservative/republican house and senate?

      oh Mr. Carroll, you do realize that adults read your blogs right?
      didn’t this “blame the government for the housing crisis” fad die out already?
      It seems the conservative spin is still in full effect.

      ps. that hole is starting to get really deep, you might need another shovel.

      spin, spin away!

    40. Billie says:

      Out of all the things this president of America could’ve done is rid the people of the fannie/ freddie failure. He’d rather destroy the lives of the innocent and complicate the good will of mankind by condescending mankind’s goodwill.

    41. Betty Huyssoon says:

      I have browsed through the many comments which give lots of wood to put on the fire of the burning Fannie and Freddie. I certainly do not pretend to know all about this rather prolonged nightmare, in which many have become very rich, but many more have become very poor…for whatever reason….and there are certainly many.

      Now if you were a, not necessarily, but maybe, a Fortune 500, with a lemon that is dragging you down, and everyone with it, what would you do? You certainly would make a feasibility study, a rather negative cash flow study, a insightful study of the rather odd employee and staff incomes and contracts, pensions, entitlements, etc. etc. etc. and would come to some conclusion. It stares you in the face of reality! Can you hide it? Why do you want to hide it? The evidence is there for everyone to see. A private corporation would therefore, take steps, a la Peter Drucker, to amend and rectify the situation. It is obvious to many citizens of this country that Fannie Mae and Freddie Mac should be eliminated, AND IMMEDIATELY! This has been a losing game for so many years, and I am a neophyte, but I do not understand the positive voting politics of a losing business, as if it could go away by just closing ones eyes. I would appreciate someone to give me an honest explanation of what has happened and what are the legal ways to eliminate this monstrosity, without damaging the stressed-out-because they know, the stressed out because they don't understand, and the completely illiterate, who stand in the background waiting for the other two to speak up. Can you fathom the economy involved by just eliminating the corruption! We just might pay 1/6 of the cost of the health care. Whoopee!

    42. John Ottley, Jr. Atl says:

      No pun intended, but you're right on the money. The McCain Bill is trying to correct this oversight. Hope you'll write about it.

    43. Bill Richter, 2347 Eades Lane, Charleston, SC 29414 says:

      It seems to me that the entire argument omits any blame to the Government for its passage and enforcement of The Community Redevelopment Act, the bill which directed the banks to be more willing to make loans to people who might not have been able to pay them back (and still has not been repealed). The bill has a Government protection clause that the bank should not make loans that were too risky, but the Bill directed the banks to give periodic reports on how well they were doing, and these were continually reviewed and critiqued by the Government.

    44. Zack says:

      GSE(Government Sponsored) share of subprime originations by year:
      2002 – 18%
      2003 – 24%
      2004 – 33%
      2005 – 27%

      PRIVATE COMPANIES(free market) subprime originations by year do the math.
      2002 – 82%
      2003 – 76%
      2004 – 67%
      2005 – 73%

      subprime lending was the problem and GSE’s were dwarfed by the remaining percentage share. again, the free market does not get a free pass.


      85% of all lenders subject to the (community reinvestment act) had no corresponding rise in bank failures up until 2006/2007. Worked just fine since 1977, for 30 years.

      Fannie Mae and Freddie Mac and CRA was not the problem. Having no regulatory reform was the problem. The conservative/republican majority in the lesiglative and executive branch while all of this happend was the problem.

      numerical evidence is fun!

    45. Normca says:

      Following the end of the Dodd term, we will see him as the head of Fannie Mae.

    46. J.C. Hughes, Texas says:

      You said it Zack. Thanks for connecting the dots back to the CRA. Unfortunately it’s not what Conn stated. So it appears the spin is yours alone.

    47. Pam, Colorado Spring says:

      Here is my story, nightmare. My loan is a Freddie Mac loan. I purchased my house in 2001, paid $60,000.00 down. My purchase price was $254,000.00. I currently have about $100,000.00 equity in my home. Unfortunately, when I refinanced in 2003, I took out a 7 year balloon. A balloon payment of $178,000.00 was due May 1. I had worked in land development as a project manager until my layoff in February of 2009. Since that time I have been trying to get my mortgage modified with no luck what so ever. Freddie had denied my request for a modification because I could not show 9 months of unemployment benefits remaining. Colorado will only issue benefit letters with the current benefit amount. So, it is impossible to show 9 months. I have offered to setup monthly withdrawals from my retirement accounts to show continuing income. I have offered to pay my mortgage payments one year in advance. Neither of these options has received any consideration.

      I am current on my mortgage, there is not a program available to help a responsible person that is current and has equity in their home. My home is my life's savings. I am 55 years old and there is not enough time left in my working life to begin anew. I have asked for a month by month extension of the balloon until I find work and am able to refinance. If I default, and believe me I won't, then foreclose.

      Would Freddie rather short sale my home or take a chance to make the $300,000.00 in interest if they would extend the balloon? To me it does not take a rocket scientist to figure out what would be best for everyone. Is the Board of Directors aware there are cases like mine? What would their investors have to say about this?

    48. Jim Snedeker says:

      I say, let them fail.

    49. Jack G Schaefer says:

      Stop the bus and let me off, I don't want to play no more !! Every body cheats !!

    50. Sue From Detroit says:

      Why is Chris Dodd even around dealing with this matter. As far as I am concerned he should be out of office no longer deciding anything. Barney Frank, Franklin Rains and all the others involved in the Housing Failure that caused the financial melt down should be in jail or in retirement. These people should not be in Washington anymore their are too dangerous to human life.

    51. Kelly, Pennsylvania says:

      Where do I even begin? I don't think I need to rehash some of the excellent points made by my fellow commenters, so I will simply suggest a solution (one which I believe was alluded to…). Several have asked, why do "we" let the government and these unethical conglomerates get away with raping the American people of their money? The simple answer is because there is no objective party to oversee a criminal prosecution. How entangled are the webs our politicians and even our president have weaved among the banks, mortgage companies, special interest groups, big oil, etc, etc, etc. If you think for one second they are not personally benefitting from our failure (and the failure of these companies) you are a fool. And who again would do the prosecuting? They are all involved and receive personal gain. There is no such thing as a fair election-it has been shown that the candidate who raises the most money wins the race-not a coincidence. And how do they raise such money? Well, just ask Obama-see just who contributed to his campaign and who is now benefitting from his administration (Goldman-Sachs, BP…). So, the solution is not to vote them out-there is no one worthy to vote in to replace them. There must be an overthrowing of this government by the very people being destroyed by them or a complete overhauling of the system we have created to elect officials in this country. Career politians should not exist. Our country should be led by compassionate business people-NOT the CEOs and CFOs of places like GM, but entrepeneurs who have pulled themselves up to success without handouts, bailouts, lookouts, whateverouts. I say who cares about the amount of experience someone has had in a political office-that makes them a liability in my opinion.

    52. Tea Party Tim says:

      Fannie Mae ranked number 1 and Freddie Mac ranked number 2 in the top 20 business losses for 2009. As a matter of fact if you the remaining 18 in the top 20 up it is still only 2/3 of the top two.

      This makes the numbers on the Zack attack look pretty ridiculous, doesn't it. Evidently the private sector did a much better job evaluating loans than the government did, so why on earth would we want the government that failed miserably to regulate the private sector that although they didn't escape, did a much better job.

      Want to see the numbers. There right here on CNN's website. http://money.cnn.com/galleries/2010/fortune/1004/

      Gee numbers are fun, Zack.

    53. Zack says:

      Bill Richter,

      Aside from the fact that 85% of all lenders subject to the (community reinvestment act) had no corresponding rise in bank failures up until 2006/2007 or the fact that any G.S.E’s, including C.R.A. made up for less then 25.5% of the entire subprime market share in the U.S., your point is? Also, have you read the bill at all, the ammendments given, the timeline statistics of C.R.A. or the percentage of market share, the periodic reports? Nothing you mentioned even comes close to what C.R.A. implemented. Its discriminatory lending that brings the government in, mostly due to corruption within private lenders. If the free market was so great it would have understood that spreading the market to low-income borrowers makes profitable since, but they didn’t. It was nothing but the good old fashioned american dream which is take the money, screw everyone else and run! I’m not saying government is the solution but when successful programs like C.R.A. that worked for 30 years along with G.S.E.’S that had absolutely no regulatory refrom what else would you expect to happen? G.S.E’s and C.R.A were neccessary And I will blame the conservative/republican majority in congress and the last administration, how could I not? They passed nothing to combat reform, nothing. No offense, but come on man, broad statements are a dime a dozen on this website. I want substance, substance, Substance!

      This battle was lost long ago. Are you really deciding to beat that dead horse again?

      I love this conservative idea that all the lenders (not subject to government in any way, shape or form) get a free pass? I just can’t seem to wrap my head around people refusing numerical evidence.

      J.C Hughes,

      what dots? what spin? Numbers and facts are now considered spin?
      And Mr. Carroll knows better then to bring up that old “blame cra” debate, that’s why he didn’t.

      I love you guys. I mean, I know this is a conservative website but just because you hear other conservatives on Heritage, Fox News, Limbaugh, Coulter, Hannity or Beck say something, does that mean it automatically becomes fact? Come on guys, this was free market based high-cost subprime mess. Even if every single loan under C.R.A. or any other G.S.E’s failed it is still dwarfed by the private sector in lending. Can you really not see that?

    54. Tea Party Tim says:

      Also to add food for thought. The loan bundle that Goldman-Sachs sold off and made so much money…think about it. Goldmand-Sachs is a brokerage company….they don’t originate loans…do you think it is possible that this group of underperforming sub-prime loans might have orginated with Fannie Mae and Freddie Mac.

      The idea to make homes affordable to everyone, originated with Carter and was pushed off a cliff by Clinton. The cover up to big government failure now rest with Obama.

    55. Zack says:

      I thought about leaving this one alone but, its just too much fun with you conservatives sometimes!


      Private companies that took losses are listed below.

      Maybe you should try looking at 2009 numbers

      Also the list you gave me has few listed Lenders. You should try and stay on topic.

      The link you offered shows that fannie and freddie lost 93.6 Billion.

      The other private companies,(most of them not Lenders) shows 66.7 Billion in losses.

      Yes, the private companies listed came in at around 2/3 of Fannie and Freddie.

      Since you are off topic, I might as well go off topic too…

      These (private companies) below have estimate losses of 1.264 TRILLION combined.

      So, what are you trying to prove here?

      Wells Fargo – $138.6B

      Goldman Sachs – $129.0B

      Morgan Stanley – $121.0B

      JP Morgan Chase & Co. – $221.7B

      Citigroup – $309.7B

      UBS – $228.6B

      Merrill Lynch – $115.4B

      We are talking about Lenders and the housing market were 85% of the Private companies held

      total market share and G.S.E.'s and any Lenders subject to C.R.A. were only 15%

      And as far as banks and other private companies, their losses destroy and

      government regulated companies, even fannie and freddie.

      Here is a list and link to other (private Lenders) that took losses…

      290 of these Lenders were not subject to C.R.A. or any other Government Regulation.

      290 were NOT G.S.E.'s. 95% of all lenders listed were completely free market based.

      16 were under G.S.E.'S and C.R.A. which is around 5% of the Lenders listed

      A complete list of Lenders shows that 85% were not subject to C.R.A nor were they

      "Governement Sponsored Entities"

    56. Zack says:

      Do you understand Market Share and loss? The private sector dominates losses for Lenders, Banks and all other companies.

      And yes, I already know "numbers" are fun, so when will you start providing some instead of the pitiful conservative spin about the

      housing crisis. Your name says enough. Tea Party? You have not had a single penny increase on your federal income taxes.

      1.264 TRILLION against 93.6 Billion… come on.

      Could I please have an adult conversation, instead of someone posting some random link that has nothing to do with the Housing

      Crisis.. anyone?

    57. Zack says:

      and for Goldman-Sachs, your assumptions are embarrassing. Provide research, otherwise, keep out of the debate.

    58. Zack says:

      Federal Reserve Board data show that:

      More than 84 percent of the subprime mortgages were issued by private lending institutions.

      Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers.

      Only one of the top 25 subprime lenders were directly subject to the housing law.

      need anything else?

    59. Zack says:

      Very few of these sub-prime predatory loans were made by CRA backed institutions, most were made by these big mortgage companies like countrywide which are now bankrupt. And most of the mortgage defaults were people who re-financed, not firts time homebuyers. It was this whole system of commercial banks making these predatory loans and selling the mortagages to investment banks and investment banks selling the mortgages in derivatives to global investors. Now this whole derviative bubble burst and all these global investors have AIG in case they loose money. It was awful greed and corrpution on wall street that caused this mess. Instead of giving trillions of dollars to investment banks to kep donig the same things they have been doing, how about giving the money to homeowners to elimenate mortgages? That is what should have happened, but it didn’t and which party was in charge of the house, senate and presidency at the time? bingo!

    60. Tea Party Tim says:

      The point is that the housing market controlled by the government that controlled in your estimation 6% accounted for over 90% of the net bottom line losses to the companies. It is part of what economics is all about (the bottom line). A companies ability to sustain losses and still remain profitable is a credit to the business model that it has in place. The government run programs Fannie Mae and Freddie Mac proved to have the worse business models and management.

      Get some data from sources that don’t manufacturer their own data like blog posts. Then take an economic course so that you can understand what you are looking at.

    61. Tea Party Tim says:

      As for Goldman-Sachs don’t embarass yourself with assumptions that you know nothing about other than what data you can amass from blog posts.

    62. Tom, Pennsylvania says:

      Where are the honest reporters? If this was happening under a Republican administration, the Democrates and their media arm (ABC,CBS,NBC) would be crucifying anyone with a link to Freddie and Fannie. Are there any honest Federal Prosecuters out there who think this corruption is worthy of a criminal investigation? The Community Reinvestment Act of the 90s is the real culprit behind the downfall, aided and abeted by Fannie, Freddie, and their supporters in Congress (mostly Democrats). The Government has no business in the mortgage business and deciding who gets a home and who doesn't. But then again, we have so many socialists (pardon me, Progressive Democrats) in our government what else should we expect. I pray daily that we vote these people out of office and start to get our government back to what the Founding Fathers envisioned.

    63. Zack says:

      oh boy, aint this fun!

      you stated-

      "The point is that the housing market controlled by the government that controlled in your estimation 6% accounted for over 90% of the net bottom line losses to the companies"

      Here is another point that conservatives like you seem to leave out…

      -The housing market controlled by the free market including the (top 7 private sector losses in 2008/2009 including the remaining 290 private sector lenders that show losses in 2007/2008/ (all listed below), that controlled 85% of the entire market share in the U.S.(confirmed, not "estimated" by Federal Reserve Board data and F.D.I.C reports) accounted for an average 83% net bottom line loss in 2008/2009.

      Wells Fargo – $138.6B

      Goldman Sachs – $129.0B

      Morgan Stanley – $121.0B

      JP Morgan Chase & Co. – $221.7B

      Citigroup – $309.7B

      UBS – $228.6B

      Merrill Lynch – $115.4B

      -those top 7 private sector losses 2008/2009 can be found at- http://bankimplode.com/blog/category/writedowns-a

      -the remaining 290 private sector losses 2007-2008 can be found at-

      -so lets do a comparrison between government regulated lenders and private sector lenders…

      -2008/2009 net losses for fannie, freddie(primary G.S.E.'s) and the remaining

      smaller 16 lenders under C.R.A.from 2007/2008/2009 side note:(12 out of 16 were not listed under or subject to C.R.A in 2007)

      -Freddie Mac: $71.7 billion

      +Fannie Mae: $130.7 billion

      +other 16 lenders: 21.9 billion

      Total losses in 2008/2009 from all government regulated lenders was

      =***$224.3 billion*** bottom line losses for Fannie and Freddie were actually ***88%*** not 90% and for the other 16 lenders an average of ***64%*** concluding an estimated average of ***76%*** in bottom line losses

      -2008/2009 losses for private companie in the private sector that had absolutlely no government regulation

      -1.264 trillion from top 7 private sector losses (listed above)

      +435.6 billion from the remaining 290 private sector losses (listed above)

      Total losses in 2008/2009 from all private sector lenders was

      =***1.699 trillion***bottom line losses for all private sector lenders were an estimated average of ***83%*** in bottom line losses

      to summarize..



      -infact, the private sector lenders had 19% higher losses then the other 16 smaller lenders under government regulation(C.R.A.)

      -though, Fannie and Freddie(primary G.S.E.'s had 5% higher losses then the private sector lenders.

      -so basically if you want to compare a higher loss with fannie and freddie at 5% to the private sector having $1.444 trillion more in actual losses then go right ahead!

      -or if you want to compare percentages…please, lets!

      - government losses make up for 13.5% while private sector losses make up for about 86.5% of total losses. wow, its funny how every single number comes close to that magic 85% of total private sector control in the entire housing market share!

      -again, so since fannie and freddie had 5% higher bottom line losses then the private sector lenders that means we should only trust free market lending?…ahem….

      you stated-

      "The government run programs Fannie Mae and Freddie Mac proved to have the worse business models and management"

      -and the private sector lender losses that dwarfed the government regulated lender losses accounts for…..?

      -I also assume you intentionally forgot to mention the fact that Fannie and Freddie needed regulatory reform years ago. They had full warning about the problem years ago. Who was in charge? not a single regulatory refrom bill passed from the republican/conservative led 103rd-109th congress(for 12 years) or the republican/conservative Bush administration(for 8 years) or the republican/conservative banking and finance committee chairs(for 10 years) or the republican/conservative treasury secretary(for 10 years). nothing passed, not a single bill. Which party passed specific regulatory reform for fannie and freddie in 2007…..oh yeah, Democrats in congress. hmmmmm. well, no suprise, the right-wing hates government so why would they be for regulatory reform for the largest market in the United States even after being warned about it over and over and over?

      Also, Bush and Republicans/Conservatives in congress pushing for 5.5 million more homeowners during the warnings. Or grahm-leachy which almost eliminated any and all regulation for this market. Who to blame, Republicans in congress for voting for that bill and Clinton for signing it. Wait, did I just blame someone in my own party for something! wow, I would pay money to see a republican/conservative blame someone in their own party for just one thing…I can only dream.

      -The bottom line is that Fannie and Freddie and These private companies would have been alot better with more attention and at best, some kind of regulatory reform, but thanks to republicans/conservatives in congress and the Bush Administration nothing happened. That is not opinion, that is legislative and economic history.

      you stated-

      "A companies ability to sustain losses and still remain profitable is a credit to the business model that it has in place"

      -yea, thanks for that info. what was i thinking! really? well that pesky private sector "business model" aint that credible now is it?

      you stated-

      "Get some data from sources that don’t manufacturer their own data like blog posts. Then take an economic course so that you can understand what you are looking at"

      -oh, im sorry, do you mean Federal Reserve Board data and F.D.I.C reports? or both links that I provided that have the complete list of federal and private lenders already confirmed by the the existing data? and um….your sources? aside from the jumbled up link that shows a bunch of random companies?

      -haha, your telling me to take an economic course? Oh, im very very very well aware of what i'm looking at, not to mention having a b.a. in legislative and economic history from the university of utah(not a top school, nevertheless your academic history….?. and what exactly are you looking at? Government regulated lenders are no better or worse then the private sector lenders but the total loss is much much worse for the private sector. Again, not an opinion, numerical evidence.

      -I think the real problem with your debate is to only single out fannie and freddie.

      #1-the other lenders under c.r.a. did better then the private sector.

      #2-fannie and freddie alone had 5% higher losses then the private sector which is not that signifigant.

      #3-the private sector losses dominate the total market share

      #4 the private sector owns 85% of the total market share

      #5 not a single regulatory reform bill was passed through congress for 12 years.

      you stated-

      "As for Goldman-Sachs don’t embarass yourself with assumptions that you know nothing about other than what data you can amass from blog posts"

      -hey, your repeating the same thing over and over. The proof is on you. Provide evidence to what it is you are talking about. Oh, and you first. Believe me, I have enough data on Goldman-Sachs too.

      you stated-

      "The idea to make homes affordable to everyone, originated with Carter and was pushed off a cliff by Clinton. The cover up to big government failure now rest with Obama"

      -now, thats my favorite conservative/republican talking point. aside from being overwhelmingly inaccurate, it shows that you guys are so good at making such broad statements! its quite entertaining. so, what exactly are you talking about?, what does that even mean? c.r.a. was fine up until 2006. 85% of all loans(again the magic 85) had no corrisponding rise in bank failures. Cover up?

      -Now, off topic. since you are obviously involved in the "tea parties" tell me how much your federal income taxes have gone up since Obama was elected? a penny, nickle, dime, quarter, dollar oh wait, unless you make over $245,000 in tax year 2009/2010 you actually had a decrease in federal income taxes. Infact, federal income taxes based on average annual income have been the lowest since 1952. But you know, the conservative/republican way is to give tax breaks for the rich, borrow, spend, borrow, spend, borrow.

      -also, judging by you name you are most likely against healthcare reform, wallstreet reform, banking reform, housing reform…..ahem. haha., reducing overextended military budgets, same-sex marriage, dont ask dont tell, providing alternative energy instead of "drill baby drill"

      -im also willing to bet you stand by fox news, obviously this website, rush, hannity, coulter, beck and other "conservative model americans"

      well, its been fun but if you wish to continue, please please do. It would be my pleasure.

      and you right, numbers really are fun are they not?

      again, any adults available for debate?

      ps. pardon my grammar, im working, pulling payroll and talking to my co-workers at the same time. this is what you get when you type to fast!

    64. Billie says:

      Zack must be government employed if it's okay to use his computer for debate on the truth! When you're not doing your job by debating truth, do you spend the rest of the time looking at computer porn? Government pervs love that, it's not at their expense and they'll be paid regardless.

      Grow up. Zack. Use independent studies. Ones who have dignity that hold themselves accountable like Rasmussen.

    65. Zack says:

      Another very very very important fact.

      A majority of the loans taken in by Fannie and Freddie from 2005-2009 were already bad. Horrible data systems, no regulation of any form, no oversight, nothing. So basically, loans that originated in the private sectors, outside of Fannie and Freddie, taken in by Fannie and Freddie makes it Fannie and Freddie's fault that the bad loans originated completely outside of Fannie and Freddie in the first place? Man, I just love conservative thinking! So much spinning it makes you dizzy!

      It's true. I have the numerical evidence for that as well. Shall we dance…?

      Again, Fannie and Freddie were and are no worse then the private sector lending. Infact, total "bottom line losses" in the private sector destroy Fannie and Freddie or any other G.S.E.'s or Lenders under C.R.A.

      Any single person on this website who thinks otherwise bring evidence, not talking points.

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    69. Len, Alexandria,KY says:

      SO… When will Lady Barney and Chris Dudd get their Just Reward? Like being fitted for Horizontal triped suits and having to repay tax payers in full for their Inept handling of Freddie and Fannir from their Multi Millions that Raines, Johnson and Gorelick paid them to Promote the Housing Bubble INsanity which Frank Claimed several times " It ain't Gonna happen" ???

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