In the last week, the government-backed mortgage finance giants Fannie Mae and Freddie Mac asked the taxpayer for $19 billion to stay afloat. Add that to the $127 billion in bailouts they have already received since September 2008, and we are now talking about a whopping $146 billion of your hard-earned tax dollars being used to prop up these failed entities. In more than a year and a half we have heard nothing from the Administration about a plan to implement real reforms to stop the bleeding. This Democratic Congress, …
The Center for Public Integrity has a new project up called The Subprime 25 that identifies the “top 25 lenders who were responsible for nearly $1 trillion of subprime loans made from 2005 through 2007. Together, the companies account for about 72 percent of high-priced loans reported to the government at the peak of the subprime market. Securities created from subprime loans have been blamed for the economic collapse from which the world’s economies have yet to recover.” Guess who is at the top of the list? Countrywide Financial. But …
At the height of the campaign season, House Oversight Committee chair Henry Waxman (D-CA) held a number of hearings on the burgeoning financial meltdown including investigations into the bankruptcy of Lehman Brothers, the bailout of AIG, The Breakdown of Credit Rating Agencies, and The Role of Federal Regulators. The purpose of all of these hearings was to blame deregulation and Wall Street greed for the markets downturn. Not until the election was safely over did Waxman manage to hold a hearing on the role government intervention played in the disaster. …
The Washington Post has a fine editorial on the current financial crisis first noting: As financial panic spread across the globe and governments scrambled to contain the damage, reality seemed to announce the doom of U.S.-style free markets and President Bush’s ideology. But this is wrong in two ways. The deregulation of U.S. financial markets did not reflect only the narrow ideology of a particular party or administration. And the problem with the U.S. economy, more than lack of regulation, has been government’s failure to control systemic risks that government …
Following up on his apologia for Freddie Mac and Fannie Mae today, Paul Krugman blogs: What you need to know here is that the right — the WSJ editorial page, Heritage, etc. — hates, hates, hates Fannie and Freddie. Why? Because they don’t want quasi-public entities competing with Angelo Mozilo. And it’s true: We do hate Fannie and Freddie. But not for the reason the Krugman conjures up. We’re not afraid of Fannie competing with the likes of Countrywide Financial CEO Angelo Mozilo. If only that were the case! The …
The Washington Post may have shifted its coverage of the Wall Street bailout bill from the front page to the business section, but the newspapers in Connecticut, Sen. Chris Dodd’s home state, are rightly keeping up scrutiny of the relationship between the Democratic senator and the banks that would benefit directly from Dodd’s bill. The Hartford Courant editorializes: [T]he Dodds received a five-year adjustable-rate mortgage on their Washington townhouse of $506,000 at 4.25 percent and a $275,000, 10-year adjustable-rate loan on their East Haddam home at 4.5 percent. Such rates …
The Washington Examiner has obtained a “confidential and proprietary” document produced by Bank of America and titled “FHA Housing Stabilization and Homeownership Retention Act of 2008.” The “Discussion Document” dated March 11, 2008, closely resembles the housing bailout bill drafted by Sen. Chris Dodd (D-Conn.) that the Senate is set to vote on within days. Senate staffers have told the Examiner‘s Tim Carney, “the bailout section is exactly what Bank of America and Countrywide wanted. Its obvious they got what they asked for.” Countrywide Financial is at the heart of …
Despite the fact that Sen. Chris Dodd (D-Conn.) now admits he was a Countrywide Financial “VIP” since 1993, Congress is still barreling ahead with the $300 billion housing bailout bill that Dodd sponsored. The important thing to remember as the debate over this massive bailout continues is that this bill is really a bailout of Wall Street, not homeowners. Progressive economist Dean Baker explains: This bill, the central feature of which is having the FHA guarantee new mortgages to replace one’s currently facing default, would first and foremost be helping …
We have been calling Sen. Chris Dodd’s (D-CT) housing bailout bill “The Wall Street Bailout Enhancement Act” for over a month now. In particular, we have singled out Countrywide Financial as the bank with most to gain from the federal government’s generosity. Countrywide is the largest loan servicer in the nation. It has been accused by bankruptcy judges of using dubious tactics to issue mortgages to unqualified borrowers, and has been at the center of the nation’s still-unfolding mortgage crisis. In the last three quarters, Countrywide has lost $2.5 billion, …
During the debate on the housing bailout bill last week, Democrats consistently justified their “American Housing Rescue and Foreclosure Prevention Act” by citing the Treasury Department’s involvement in JP Morgan’s purchase of Bear Stearns. Bill sponsor Rep. Barney Frank (D-Mass.) was typical: You didn’t get an answer on how the Bush administration, which strongly supported Bear Stearns through the Treasury Department and its appointees, how it’s OK to do $29 billion for Bear Stearns, but not $2.4 billion for homeowners. Frank has, no doubt, hit upon a convincing rhetorical argument …
