NYT Revealed True Cause of Fannie Mae Crisis -- In 1999!

In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.

The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.

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 stock holders to maintain its phenomenal growth in profits.

"Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements," said Franklin D. Raines, Fannie Mae's chairman and chief executive officer. "Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market."

- New York Times, September 30, 1999

http://query.nytimes.com/gst/fullpage.html?res=9C0DE7DB153EF933A0575AC0A96F958260&sec=&spon=&pagewanted=1

Do you know where John McCain was born?

Congress and president than includes all parties has what about a 20% approval rating and Americans say no to this plan, so guess what papa knows best.
The president has again gone on TV to elicit our fears and join with ---Experts--- he has hired who clearly have guessed everything wrong and have not been able to do the right thing with the economy so why would I believe they now ---KNOW--- how to fix it.

So now, there is what I have named the ---EMD--- to replace ---WMD---.
---EMD--- or Economic Mass Destruction is the mantra if we do not do it now we will all die a slow and painful financial death, and of course, we just realized it is crashing, and that Economic Mass Destruction will occur. Gee, they just noticed a problem after saying for years everything is Rosy. My heaven I am to believe crooks coming from Wall Street and Corporate America to Washington to ask for a free ride. Are they not millionaires already? So all the current and previous Crooks on Wall Street walk away with the millions they pilfered from us for the past 20 years or so, which have led to this new fraud to take from the poor and give to the rich?

I am sorry crying wolf when the wolf is the one crying does not convince me.

NO BAILOUT. I repeat NO BAILOUT. Let the ---EMD--- occur and clean us of a scourge that is haunting us instead of borrowing just to put it off. When will the PONZI scheme of propping up our economy end? We must all suffer, not just me paying for someone else’s mistake while I pay more taxes and pay my bills.
I worked for Washington Mutual Bank who deserves nothing as I watched them approve billions in loans, which now are ---Toxic---. That company deserves nothing but a kick out the door. NO BAILOUT. I will vote against every ---POLYTICK--- (Blood Sucker) the rest of my life if they take more of my tax money to pay for Crooks from Wall Street to Main Street.
Thanks and have a nice day,
Kchusa.

Let the banks fail.

Let the crash come fast and hard - that will keep it short.

Let the guilty bear their rewards and leave us free to rebuild.

Any idea on where McCain is on the blow up?

I do believe that the Democrats planned to play chicken with this all along.....the last-minute "stimulus" (handout) bill, the "lets let judges rewrite mortages", etc. etc.

They think this is a game, akin to the annual who-gets-the-blame-for-failing-to-pass-a-budget game.

Despite the Media's obvious attempts to help the Democrats, over time (as it usually does happen) we'll see the true motivations revealed.

Obama is going to look like an also-ran in this. Too bad its not a game.

McCain Warned of Fannie Mae/Freddie Mac Meltdown in 2006: Democrats Ignored Him

From the Congressional Record (May 25, 2006):

Mr. President, this week Fannie Mae's regulator reported that the company's quarterly reports of profit growth over the past few years were "illusions deliberately and systematically created" by the company's senior management, which resulted in a $10.6 billion accounting scandal.

The Office of Federal Housing Enterprise Oversight's report goes on to say that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives. In the case of Franklin Raines, Fannie Mae's former chief executive officer, OFHEO's report shows that over half of Mr. Raines' compensation for the 6 years through 2003 was directly tied to meeting earnings targets. The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac.

The OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulator's examination of the company's accounting problems. This report comes some weeks after Freddie Mac paid a record $3.8 million fine in a settlement with the Federal Election Commission and restated lobbying disclosure reports from 2004 to 2005. These are entities that have demonstrated over and over again that they are deeply in need of reform.

For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac--known as Government-sponsored entities or GSEs--and the sheer magnitude of these companies and the role they play in the housing market. OFHEO's report this week does nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO's report solidifies my view that the GSEs need to be reformed without delay.

I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.

I urge my colleagues to support swift action on this GSE reform legislation.

- Senator John McCain

And if school records are so important how can you vote for a candidate who was 5th from the bottom of his class in college, who picked a running mate who had to transfer 5 times to get a communications degree?

Do you find comfort in knowing the candidate you support isn't very smart as opposed to having some uncertainty about it?

democrat all your life....

please show me where obama voted against mccains half legislation to rope in freddie and fannie (it wasnt about regulating or fixing them it was about them getting too big)

John McCain was born in the Panama Canal zone. His father was a naval officer stationed there.

Democrat all my life: John McCain was born in the Panama Canal zone. And before you begin to hyperventilate about the constitutional requirement that president's be born in the U.S., Congress passed a resolution saying that McCain's birth in what was then an American protectorate satisfied the Constitution and made him eligible to be President.

Great post/find LightSeeker. For all of those saying this is the market failing and the downfall of free market capitalism gone wild, all I can say is read a book.

Affirmative action applied to the housing market, the liberals loved it then! And now....well, obviously this crisis is due to greedy bankers and the excesses of an unregulated free market! LOL! what foolishness

posted by "Democrat all my life" - "I'd rather we didn't have a debate"

uh ok moron. Lets' not really try to figure out what is best for the country. We'll just agree blindly with whatever stupid crap you say. Idiots like you are the reason we're in this messin the first place. I bet you are totally in favor of using taxpayer money to bail out fat cat businessmen.

I hope you lose everything you've got.

In regard to the post by "Democrat All My Life" titled "Proud of McCain"...

You don't want the debate? Huge minority there buddy. Take a look at the surveys... 68-72% of the people have responded they think the debate should go on as planned.

I've been a registered republican for 22 years, but I've finally opened my eyes and realized what the reps are doing. Obama 08 Baby!

Nice try with the birth certificate lie (see http://latimesblogs.latimes.com/washington/2008/06/obama-birth.html ) Now please tell us the fairy tale of a midshipman who graduated at the bottom of his class, a navy pilot who was shot down 5-times, and then became president because he could take a beating. Please elect McCain so the European Union can then rule the world. Stupid Americans.

I absolutely agree. Curb the Socialism, let the markets fall. NO BAILOUT!!! NO BAILOUT!!! Let the natural forces of free market purge us of federal involvement and set itself right again!

First time visiting this blog, and... I believe, collectively, you are the stupidest commenters on the internets. Next!

It will be the best thing for the country if the bailout blows up...why line the pockets of Goldman/Buffett/BofA, etc. at the expense of Main Street?

freddie and fannie are not the whole problem... they are but a small fraction of the problem

why is mccains campaign manager still getting paid by freddie and fannie?

why is mccain for deregulating the markets the very thing that caused this mess to beign with?

House Republicans are not torpedoing the deal.

Pelosi is because she is demanding a certain no. of Republican votes for cover.

She can pass the bill, but doesn't want the public to realize her party is as much for rich bankers than the Republicans.