Alabama Sen. Richard Shelby questions...

Alabama Sen. Richard Shelby questions proposed overhaul of financial regulations

There are 29 comments on the The Mobile Register Online story from May 8, 2010, titled Alabama Sen. Richard Shelby questions proposed overhaul of financial regulations. In it, The Mobile Register Online reports that:

The Senate's top Banking Committee Republican says a pending overhaul of financial regulations is flawed because it does not impose controls on giant government-sponsored mortgage finance companies.

Join the discussion below, or Read more at The Mobile Register Online.

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“Truth to Power!”

Since: Apr 07

Longwood, FL

#21 May 8, 2010
The Washington Post: McCain Pushed For Fannie And Freddie Regulation While "Obama Was Notably Silent."

"In 2006, he pushed for stronger regulation of Fannie Mae and Freddie Mac -- while Mr. Obama was notably silent.

'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,' Mr. McCain warned at the time." (Editorial, "'Always For Less Regulation'?"

The Washington Post, 9/19/08)

Former President Bill Clinton Acknowledges Democrats Resisted Fannie Mae And Freddie Mac Reform:

Former President Clinton:

"I think the responsibility that the Democrats have may rest more in resisting any efforts by Republicans in the Congress, or by me when I was President, to put some standards and tighten up a little on Fannie Mae and Freddie Mac."

(ABC's "Good Morning America," 9/25/08)

“Truth to Power!”

Since: Apr 07

Longwood, FL

#22 May 8, 2010
Deception at Core of Obama Plans

March 06, 2009

The buffoon logic of Obama's address to Congress went like this:
"Our economy did not fall into decline overnight," he averred. Indeed, it all began before the housing crisis. What did we do wrong? We are paying for past sins in three principal areas: energy, health care, and education -- importing too much oil and not finding new sources of energy (as in the Arctic National Wildlife Refuge and the Outer Continental Shelf?), not reforming health care, and tolerating too many bad schools.
More Fear Mongering: The "day of reckoning" has now arrived.
Obama has come to redeem us with his far-seeing program of universal, heavily nationalized health care; a cap-and-trade tax on energy; and a major federalization of education with universal access to college as the goal.
As an explanation of our current economic difficulties, this is total fantasy.
As a cure for rapidly growing joblessness, a massive destruction of wealth, a deepening worldwide recession, this is perhaps the greatest non sequitur ever foisted upon the American people.
At the very center of our economic near-depression is a credit bubble, a housing collapse and a systemic failure of the entire banking system. One can come up with a host of causes: Fannie Mae and Freddie Mac pushed by Washington (and greed) into improvident loans, corrupted bond-ratings agencies, insufficient regulation of new and exotic debt instruments, the easy money policy of Alan Greenspan's Fed, irresponsible bankers pushing (and then unloading in packaged loan instruments) highly dubious mortgages, greedy house-flippers, deceitful homebuyers.
The list is long. But the list of causes of the collapse of the financial system does not include the absence of universal health care, let alone of computerized medical records. Nor the absence of an industry-killing cap-and-trade carbon levy. Nor the lack of college graduates.
Indeed, one could perversely make the case that, if anything, the proliferation of overeducated, Gucci-wearing, smart-ass MBAs inventing ever more sophisticated and opaque mathematical models and debt instruments helped get us into this credit catastrophe in the first place.

“Truth to Power!”

Since: Apr 07

Longwood, FL

#23 May 8, 2010
Fannie Mae Eases Credit To Aid Mortgage Lending

Published: September 30, 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, 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...

In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers.

Bail Out Predicted in 1999 from same NY Times article:

In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.

''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute.''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.''

“Truth to Power!”

Since: Apr 07

Longwood, FL

#24 May 8, 2010
(D) Cisneros: Building Flawed American Dreams

Published: October 18, 2008

SAN ANTONIO — A grandson of Mexican immigrants and a former mayor of this town, Henry G. Cisneros has spent years trying to make the dream of homeownership come true for low-income families.

As the Clinton administration’s top housing official in the mid-1990s, Mr. Cisneros loosened mortgage restrictions so first-time buyers could qualify for loans they could never get before.

Then, capitalizing on a housing expansion he helped unleash, he joined the boards of a major builder, KB Home, and the largest mortgage lender in the nation, Countrywide Financial — two companies that rode the housing boom, drawing criticism along the way for abusive business practices.

And Mr. Cisneros became a developer himself. The Lago Vista development here in his hometown once stood as a testament to his life’s work.

Joining with KB, he built 428 homes for low-income buyers in what was a neglected, industrial neighborhood. He often made the trip from downtown to ask residents if they were happy.

“People bought here because of Cisneros,” says Celia Morales, a Lago Vista resident.“There was a feeling of,‘He’s got our back.’”

But Mr. Cisneros rarely comes around anymore. Lago Vista, like many communities born in the housing boom, is now under stress. Scores of homes have been foreclosed, including one in five over the last six years on the community’s longest street, Sunbend Falls, according to property records.

Mr. Cisneros received at least $70,000 in pay and more than $100,000 worth of stock. He also received $1.14 million in directors’ fees and stock grants during the six years he was a director at Countrywide. He made more than $5 million from Countrywide stock options.

He says his development work provides an annual income of “several hundred thousand” dollars and Mr. Cisneros says his mistake was not the greed.

He argues it was impossible to know in the beginning that the federal push to increase homeownership would end so badly, even though many predicted it.

He had President Clinton’s ear, an easy charisma and a determination to increase a homeownership rate that had been stagnant for nearly three decades.

Thus was born the National Homeownership Strategy, which promoted ownership as patriotic and an easy win for all.“We were trying to be creative,” Mr. Cisneros recalls

“Truth to Power!”

Since: Apr 07

Longwood, FL

#25 May 8, 2010
Really wrote:
"To big to fail" only applies when Bwarney Frank-Sucker doesn't like the company.
Fannie and Freddie are exempt because they only caused the problem, along with Bwarney.. you know - sue any institution that doesn't give a loan to the unqualified.
Anyone who expects the bozos that caused the problem to fix it is due for a rude awakening.
There is a fix available - In November - Throw the stinking bums out.
New Agency Proposed to Oversee Freddie Mac and Fannie Mae

Published: September 11, 2003

Reflecting the changing political climate, both Fannie Mae and its leading rivals applauded the administration's package. The support from Fannie Mae came after a round of discussions between it and the administration and assurances from the Treasury that it would not seek to change the company's mission.

After those assurances, Franklin D. Raines, Fannie Mae's chief executive, endorsed the shift of regulatory oversight to the Treasury Department, as well as other elements of the plan.

''We welcome the administration's approach outlined today,'' Mr. Raines said.

''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee.

''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''

Representative Melvin L. Watt, Democrat of North Carolina, agreed...

“Truth to Power!”

Since: Apr 07

Longwood, FL

#26 May 8, 2010
Here's 7 records of people speaking out and raising the red flag of a mortgage crisis based on Clinton, Janet Reno, Cisneros, Cuomo forcing prosecution based on "Discrimination" reports generated by Federal Reserve Computer programs:

1) 1992: Republican representative Jim Leach (IO) warned of the danger that Fannie and Freddie were changing from being agencies of the public at large to money machines for the principals and the stockholding few.

Here's one of the best explanations I've read (6 pages):

2) 1993: National Review dissents Dec 27, 1993 Robert Stowe England

3) As Congress's leading mortgage expert, Representative Bruce Vento (D., Minn.), explains: "We can't take away the judgment of individual financial institutions about what is a good credit risk.

4) Mr. Congdon, an economic advisor to Gerard & National in London and managing director of the economic consulting firm Lombard Street Research. "If it succeeds in driving banks to make bad loans in order to improve their minority-approval rates, this will eventually lead to more foreclosures in troubled inner-city communities. It will also reduce the available capital to credit-worthy borrowers, forcing more Americans to settle for a less attractive home than they had expected..."

5) NY Times 1999
Fannie Mae Eases Credit To Aid Mortgage Lending

...Peter Wallison a resident fellow at the American Enterprise Institute.''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.''

6) 1999: New Treasury Secretary, Lawrence Summers, became alarmed at Fannie and Freddie's excesses. Congress held hearings the ensuing year but nothing was done because Fannie and Freddie had donated millions to key congressmen and radical groups, ensuring no meaningful changes would take place. "We manage our political risk with the same intensity that we manage our credit and interest rate risks," Fannie CEO Franklin Raines, a former Clinton official and current Barack Obama advisor, bragged to investors in 1999.

7) 2003: Bush proposes what the NY Times called "the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago". 1 of 17 proposals.


#28 May 8, 2010
It's too late to fix any of this financial travesty, it's gonna crash, all of this talk about a 'recovery' is smoke and mirrors, we're going to the bottom, this recovery fantasy that is being touted is a bold-faced-lie...
BUT, we will bounce back, only if we 'Nationalize' the fed, and adopt a currency backed by a solid commodity such as gold/silver...
This nation must wrestle the money control from the foreign money masters, only then does the U.S. have a chance for financal stability...
Industry needs a solid currency to regain its manufacturing capacity' to bring this nations people back to the dinner-table...
Razors Edge

Palos Hills, IL

#29 May 8, 2010
Not reforming F/m & F/mac is like fighting terrorism,And forgetting
Al Quaeda? what a farce it all is,talk about laughing at the public
and scorning their wishes?

North Ridgeville, OH

#30 May 8, 2010
Fannie and Freddie are the next piece of regulatory legislation needed to reign in the bubble bandits.

But, Republicans are using these tactics to delay passage of this piece of legislation to satisfy their Wall Street campaign donors.

As the derivatives debaucle was a part of the real estate scam that let anyone breathing get a mortgage, we will need to pass new legislation to control the inevitable impact all of the worthless mortgages they now book at inflated value, as do the major banks.

Shelby also said the bill's call for an independent consumer protection bureau within the Federal Reserve would pose risks because it would separate consumer protections from regulators who look out for the safety and soundness of banks."

So is he supporting a single agency who would be simultaneously capable of protecting consumers and promoting the interests of banks? Kind of like Cheney's Energy Task force, eh?

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