Liberal leaders in Congress — led by Congressman Barney Frank
— have made it clear that their top priority is to hide the truth of their role in the politically-driven management and corrupt oversight of these giant mortgage lenders, the Federal National Mortgage Association (Fannie Mae) and the Federal Home Mortgage Corporation (Freddie Mac)
“The failed Washington oversight, political corruption and personal greed at ‘Fannie Mae’ and ‘Freddie Mac’ helped cause the financial crisis that’s creating so much distress for American families today.”
Here is what we already know about what happened at Fannie and Freddie.
Until their collapse, Fannie and Freddie were "government-sponsored entities" — theoretically regulated by Congress. They were backed by the taxpayers for all their losses, but kept all their profits. (The saying goes "Privatize the profits, socialize the losses!")
Beginning in the late 1990's, the Clinton administration pressured lenders to loosen home loan requirements in order to increase home ownership for those unable to afford homes and to curry political favor with left-wing activists, like the "ACORN" crowd!
As far back as September 30, 1999, the New York Times reported that:
"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 its stock holders to maintain its phenomenal growth in profits."
The article went on to predict this strategy would run Fannie Mae into serious financial difficulty during an economic downturn. We were forewarned!
Nevertheless, Clintonite hacks at Fannie and Freddie like Franklin Raines, Jamie Gorelick and Jim Johnson (later a key advisor to Barack Obama) took Clinton's risky gamble and then doubled down.
(Raines and Johnson, along with Barack Obama who got the preferential rate from Northern Trust, also obtained preferential mortgage loan rates from Countrywide, the mortgage giant that is a major co-conspirator in this financial mess.)
Encouraged by Fannie and Freddie, banks began making tens of thousands of "subprime" loans to individuals who under prudent lending rules never would have qualified for them.
This ruinous game was played for ten years under both the Clinton and George W. Bush administrations.
As the Washington Post noted in a December 9, 2008, story:
"The new products included home loans made to people with blemished credit histories, called subprime loans, and mortgages made without verification of income, assets or employment.... The loans required borrowers to state their incomes and assets, but not prove them."
The decision to violate sound lending principles to advance the Clinton administration's political agenda was bad enough.
But that's no all.
Executives at Fannie and Freddie received huge bonuses if "loan tagets," including targets for subprime loans, were met. Franklin Faines earned $100 million and Jamie Gorelick earned $75 million in bonuses from Fannie Mae!
In other words, these "government-sponsored entities" not only trashed well-established lending standards — they also encouraged their executives to hustle as many bad loans as possible.
In fact, we now know that at Fannie Mae in 1998, its then-head (and later Obama advisor) Jim Johnson cooked the books by deferring $200 million in expenses in order to fraudulently inflate profits so he and other senior Fannie executives could receive massive bonuses that year. What a racket!
Despite their accounting problems and warning of crisis, Fannie and Freddie, with the full support of liberals in Congress and their special-interest community organizing friends like ACORN pushed for more subprime lending.
And calculating financial institutions (too many of which had corrupt relationships with these very same politicians) were happy to play along.
And when the GOP took over the White House and Congress, the folks at Fannie and Freddie moved fast to protect their cash cows by putting key Republicans on their boards and payrolls, including former Bush trade representative Robert Zoellick, who served a tour as Fannie's executive vice president, and former Cheney aide David Gribbin, who sat on Freddie's board.
The main objective of the crooks running Fannie and Freddie was to make sure that no one in Washington would hold them to account, and they succeeded!
Overall, Fannie and Freddie spent more than $180 million over the last ten years to lobby Congress, and make sure that no one rocked their highly profitable boats.
That's not all.
Over the same ten year period, Fannie and Freddie contributed lavishly to the politicians who chaired or had senior positions on the committees that had oversight responsibility for their institutions.
Fannie Mae alone contributed to the campaigns of 354 congressmen and senators, from both parties!
The top 4 recipients of money from Fannie Mae in order of cash magnitude were:
- Sen. Christopher Dodd (D-CT), the Chairman of the Senate Banking, Housing and Urban Affairs Committee;
- Sen. Barack Obama (D-IL), a member of the Federal Financial Management Committee and now [allegedly] our president;
- Sen. Chuck Schumer (D-NY), Chairman of the Senate Finance Committee;
- Rep. Barney Frank (D-MA), Chairman of the House Financial Services Committee.
The "political investment strategies" of Fannie and Freddie paid off — big time.
Even after a 2004 government investigation found massive fraudulent bookkeeping at Fannie Mae, Congress held no hearings, no one went to jail, and business as usual, including aggressively marketing more loans to unqualified buyers, continued unabated!
Now, our country is facing a financial disaster.
And Sen. Dodd, Sen. Schumer and Rep. Frank are still today the individuals primarily responsible for "oversight" at Fannie and Freddie, while Sen. Obama is now in the White House!
(Barack Obama's White House Chief of Staff, Rahm Emanuel, received contributions from Fannie Mae and Freddie Mac while he was in Congress. He also earned over $250,000 as a director of Freddie Mac in 2000 and 2001, and was part of Freddie's "asleep at the switch" board that failed to spot any red flags about its lending and many other financial irregularities.)
Of course, last year the corrupt houses of cards that Fannie and Freddie had become collapsed, leaving you and me and every other American taxpayer holding the bag when [the Demoqrat-run] Congress and the Bush administration bailed these institutions out.
Unsurprisingly enough, almost every one of these thieves and crooks is a corrupt Demoqrat
Naggy Pelooni's spouting on and on about others' "culture of corruption" has definitely been the grossest example of Demoqrat projection ever evinced since the founding of her completely corrupt party of racists and crooks.