The Big Flaws in Dodd-Frank
Posted by admin / Under Subprime Crisis Impact Timeline
You mention toxic mortgages. How does Dodd-Frank address that problem?Not at all. There is no attempt in Dodd-Frank to address the key problem of government subsidization of mortgage risk, and the exposures of Fannie Mae [FNMA], Freddie Mac [FMCC], and the Federal Housing Administration are still growing. How do you explain the omission?There is a powerful political interest that wants real-estate lending to be sponsored by the government. Starting about 1830, an important influence on the politics of banking came from farming interests, which increasingly promoted bank exposure to farm real-estate risk. What has changed since World War II is...
Published on Friday 18th of May 2012 05:57:48 PM
The $26 billion crapshoot
Posted by admin / Under Subprime Crisis Impact Timeline
Homeowners hoping the $26 billion foreclosure abuse settlement would mean big savings on their mortgages were mostly disappointed. Even though a million borrowers will have their principals slashed by as much as $100,000 or more, most are not eligible for a workout simply because the bank that issued their mortgages, didn't hold their mortgages. During the housing boom years of the early 2000s through 2007, about 20% of loans went into the bank's own portfolios. The rest were sold off, either to Fannie Mae or Freddie Mac or to investors. Only loans held by the banks and some of their...
Published on Friday 18th of May 2012 05:57:48 PM
Obama campaign co-chair tied to subprime mortgage crisis
Posted by admin / Under Subprime Crisis Impact Timeline
Massachusetts Gov. Deval Patrick, the Democrat who was named a national co-chair of President Obama’s re-election campaign on Wednesday, served on the board of a company that is widely blamed for helping start the subprime mortgage crisis in 2007. Beginning in 2004, Patrick served two years on the five-member board of ACC Capital Holdings, the parent company of Ameriquest Mortgage. He was paid a $360,000 annual salary for his efforts, according to “All The Devils Are Here,” a history of the financial crisis by Bethany McClean and Joe Nocera. Ameriquest had already been the subject of numerous criminal complaints when...
Published on Friday 18th of May 2012 05:57:48 PM
[CA] sues for answers from Fannie Mae, Freddie Mac on housing meltdown
Posted by admin / Under Subprime Crisis Impact Timeline
California Atty. Gen. Kamala D. Harris is suing Fannie Mae and Freddie Mac to force the mortgage giants to answer questions about their role in California's housing meltdown. In two suits filed Tuesday in San Francisco County Superior Court, Harris seeks to compel the companies to respond to subpoenas from her office that have been ignored so far. Harris is seeking information about the practices by Fannie and Freddie in California as part of her ongoing investigation into the mortgage industry. The suits ask a judge to order the two companies to answer a set of 51 questions served in...
Published on Friday 18th of May 2012 05:57:48 PM
US charges ex-Fannie, Freddie CEOs with fraud
Posted by admin / Under Subprime Crisis Impact Timeline
The Securities and Exchange Commission has brought civil fraud charges against six former top executives at Fannie Mae and Freddie Mac, saying they misled the government and taxpayers about risky subprime mortgages the mortgage giants held during the housing bust. Those charged include the agencies' two former CEOs, Fannie's Daniel Mudd and Freddie's Richard Syron. They are the highest-profile individuals to be charged in connection with the 2008 financial crisis. Mudd, 53, and Syron, 68, led the mortgage giants when the housing bubble burst in late 2006 and 2007. The four other top executives also worked for the companies during...
Published on Friday 18th of May 2012 05:57:48 PM
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