There is no independent auditor overseeing the federal agency responsible for some $6 trillion in home mortgages, because the Department of Justice's Office of Legal Counsel ruled that the agency's inspector general didn't have authority to operate, according to internal memos obtained by the Huffington Post.
The ruling came in response to a request from the Federal Housing Finance Agency itself -- which means that a federal agency essentially succeeded in getting rid of its own inspector general.
The FHFA is home to Fannie Mae, Freddie Mac, and the Federal Home Loan Banks, which are jointly responsible for purchasing or guaranteeing more than 80 percent of new mortgages issued since the middle of 2008, according to FHFA numbers.
The Treasury Department told Goldman Sachs last week that it could not use Fannie Mae's tax credits to reduce its own tax liability. An official with the Obama administration explained that the proposal "would result in a loss of aggregate tax revenues that would be greater than the savings."
This is the right decision. Had the Treasury Department allowed Goldman to reduce its tax liability by using Fannie Mae's tax breaks, it would have potentially opened the door to a severe loss of tax revenue, as other profitable companies would likely have sought to follow suit.
As reported earlier, Goldman Sachs had offered to purchase up to $1 billion of low-income housing tax credits that Fannie Mae had itself purchased during the housing bubble but can no longer use. More recently, the Wall Street Journal reported that Warren Buffett had joined Goldman Sachs in a bid to purchase $3 billion in credits. The credits, designed to encourage additional investment in low-income housing, are useful only if the company claiming them is profitable. And with Fannie Mae currently a very unprofitable company, it does not have much use for the credits. It has lost $59 billion so far this year, and the U.S. government has already given Fannie Mae and Freddie Mac, its related government-sponsored entity, almost $100 billion since September 2008.
Goldman Sachs had portrayed its offer to purchase Fannie Mae's tax credits as a "win-win" proposition. It argued that Fannie Mae would benefit because it could take these credits, which are losing value by the day, off of its books, while Goldman would benefit by reducing its tax liability by the amount of the credits.
Unfortunately, Goldman failed to include the interests of the taxpayer in its calculations. For every dollar that Goldman saves, the government -- and, by extension, the U.S. taxpayer -- loses a dollar. This is hardly a win-win situation.
WASHINGTON, DC -- Fannie Mae (FNM/NYSE) today announced the establishment of a new National Real Estate Owned (REO) Rental Policy that will allow qualified renters in Fannie Mae-owned foreclosed properties to stay in their homes. The company currently has an eviction suspension in place through the end of January which will allow for the new policy to be fully operationalized prior to the suspension concluding.
"Renters in foreclosed properties have often been a casualty of the foreclosure crisis the country is facing," said Michael Williams, chief operating officer of Fannie Mae. "This policy will allow qualified renters to remain in Fannie Mae-owned properties should they choose to do so, mitigate the disruption of personal lives that foreclosures can cause, and help bring a measure of stability to communities impacted by high foreclosure rates."
The new policy applies to renters occupying foreclosed properties at the time Fannie Mae acquires the property. Renters occupying any type of single-family property will be eligible including residents of two- to four-unit properties, condos, co-ops, single-family detached homes and manufactured housing. Eligible renters will be offered a new month-to-month lease with Fannie Mae or financial assistance for their transition to new housing should they choose to vacate the property. The properties must meet state laws and local code requirements for a rental property.
While the company markets the properties for sale, Fannie Mae will manage the properties through a real estate broker or a property management company. The company will not require security deposits to be posted in connection with this program.
Renters in the foreclosed properties will be asked to pay market rate rent under the new leases. Rates may be determined by reviewing local comparable rents, conducting a neighborhood survey, or through other relevant indicators. Rates will also be subject to any legal rent control restrictions. The company will review each instance where the market rate may require a tenant to pay additional rent and will work to reach an equitable resolution.
"WASHINGTON -- Goldman Sachs Group Inc. is in talks to buy millions of dollars of tax credits from government-controlled mortgage giant Fannie Mae, but the potential deal is running into opposition from the U.S. Treasury, which could block the deal.
A sale would bring some needed financial respite to Fannie Mae. But the administration is leery about approving a deal that would help Goldman reduce its tax bill, given the animus held by many lawmakers toward big Wall Street firms in general and Goldman in particular.
The Obama administration is looking at the deal with a critical eye and could ..."
You have to be a subscriber to see the rest of the article, but let me try to finish it:
The Obama administration is looking at the deal with a critical eye and could ...continue to do business as usual and sell out the American public in favor of global, corporate elite, who own this country.http://online.wsj.com/public/article/SB125712159288021753.html
"WASHINGTON --... more
Although the Federal Reserve's Boom and Bust Policies played a role in the Housing Bubble, Bush was one of the biggest Big Government supporters out there not only calling for government in homeownership, but also doubling of agricultural subsidies, doubling Medicare, increaseing the DOD budget, warrantless wiretapping, liberal nation building, and many other unconstitutional ideals.
***This article has been chosen as a discussion topic on PFP Movement Radio, http://www.blogtalkradio.com/pfpmovementradio Friday night at 6pm-8pm. Please Call In To The Show, 347-633-9636. COMMENTS will be included in the show so feel free to discuss or ask questions here on current.com as they will be addressed during the show. This article will also air on Freedom Hour Saturday at 9pm-10pm on Movement TV http://www.peacefreedomprosperity.com/?page_id=36***Although the Federal Reserve's Boom and Bust Policies played a role in the Housing... more
This risk is often hidden in plain sight, poses a genuine clear and present danger to the business and information security objectives, and one that is often overlooked. This issue is change control...This risk is often hidden in plain sight, poses a genuine clear and present danger to... more
Has the political class learned nothing from the housing debacle?
***This article has been chosen as a discussion topic on PFP Movement Radio, http://www.blogtalkradio.com/pfpmovementradio Friday night at 6pm-8pm. Please Call In To The Show, 347-633-9636. COMMENTS will be included in the show so feel free to discuss or ask questions here on current.com as they will be addressed during the show. This article will also air on Freedom Hour Saturday at 9pm-10pm on Movement TV http://www.peacefreedomprosperity.com/?page_id=36***Has the political class learned nothing from the housing debacle?
***This article... more
Carbon tax, value-added tax, foreign tax credit loopholes—the government is full of ideas lately on how to beef up tax revenue to service that deficit we’re running up. But just when it seems inevitable we’re due for a storm of new taxes, there’s a major tax repellent tax-loving politicians have to contend with: Globalization.
and...
Last year, for instance, as the push for expected legislation targeting tax havens intensified in the US, several large firms reincorporated to Switzerland. Among them were industrial conglomerate Tyco International, oil industry contractor Foster Wheeler, and offshore driller Transocean. Collectively, these firms generate around $40 billion in revenue. Now they’re playing for another team. They embraced Switzerland because the country’s tax treaty with the US shields them from possible adverse US legislation.
If the US becomes more punitive in its corporate tax policy (already the second highest in the developed world), there’s no doubt we’ll see another wave of companies re-domiciling. Similar to how California is losing citizens and businesses to Washington and Nevada—states with favorable tax structures—the US, France, and Germany could lose tax revenue to competing countries. If you think only as a US citizen, this shift has potentially negative consequences. However, if you think globally, there are winners and losers on both sides. "
and maybe the Governator should, too. what next? pass a law that no California or US corporations can leave?
LOL!From MY investment gurus...
Carbon tax, value-added tax, foreign tax credit... more
This video clearly shows that George Bush warned
Congress starting in 2001 that this economic crisis was
coming if something was not done. But Congress refused to
listen, along with the arrogant Congressman, Barney Frank.
The liberal media reportedly did not want this video on You Tube; it was taken off.
This link is of the same video, but is routed through
Canada.
Fannie Mae and Freddie Mac, the mortgage finance companies under federal control, are planning to pay $210 million in retention bonuses to 7,600 employees over 18 months, the firms' regulator said today.
The Federal Housing Finance Agency said $51 million in payouts were given to employees in late 2008 and the remainder will come this and next year. The information was contained in a letter to Sen. Charles E. Grassley (R-Iowa.).Fannie Mae and Freddie Mac, the mortgage finance companies under federal control, are... more
The backlash directed at the American auto industry is misplaced anger at the greed exhibited by the banks and AIG who have not delivered any relief to the average American. The auto industry deserves blame for very different reasons, namely slow retooling of their product line, but they didn't mislead us.
I believe many of the current and former leaders of the existing and failed financing industry are surely guilty of at least misleading their share holders and perhaps out right lying to them. It would seem "fair" their investors should demand a return of any bonus's or golden parachutes for covering up the truth about the health of their businesses. True Fannie and Freddie represent the most well known, but by no means the only players, or the major contributors in this fiasco, from the littel I understand about it...
But the bankers should have known that there was a risk of backlash. Few Americans ever dreamed of making what most investment bankers took for granted. In a year when red ink is flowing, why should there be any bonuses at all for executives? Talk of the need to keep valued executives does not play well when those are the same executives who got the banks into this mess.The backlash directed at the American auto industry is misplaced anger at the greed... more
As a House committee prepares to hold hearings today on the downfall of Fannie Mae and Freddie Mac, The Washington Post has gotten it hands on some pretty interesting evidence. Documents show that both were warned internally that they were pushing into risky markets. Fannie was warned that it was entering into an unsafe area of the mortgage market but it pushed forward because if it hadn't it would have been relegated to a "niche" player in the market, unable to "maintain relevance." At Freddie, risk officer David Andrukonis continually warned that the a new mortgage markets it was entering were extremely dangerous, writing that the company was buying mortgages that appear "to target borrowers who would have trouble qualifying for a mortgage if their financial position were adequately disclosed." He was consistently ignored until Freddie executive asked him to leave the company in 2005.As a House committee prepares to hold hearings today on the downfall of Fannie Mae and... more
ANP: In the third quarter, 765,558 American properties received default notices or were foreclosed on.
While mortgage giants Fannie Mae and Freddie Mac announced last month they would temporarily halt foreclosures and evictions from Thanksgiving to Jan. 9, the moratorium is likely to affect only a small percentage of homeowners facing foreclosure. On a cold December morning, Washington Independent reporter Mary Kane and ANP videographer Garland McLaurin were on the hand to bear witness to an increasingly common, but rarely documented, tragedy: someone being evicted from their home.ANP: In the third quarter, 765,558 American properties received default notices or... more
The government announced Tuesday it will spend $600 billion to take on the obligations of Fannie Mae, Freddie Mac and Ginnie Mae in order to reduce borrowing costs for the government-sponsored enterprises (GSEs).
Agency debt has always carried an implicit government guarantee but took on an explicit guarantee after the September takeover of Fannie and Freddie. Still, agency debt has been trading substantially higher than U.S. sovereign debt.
“Spreads of rates on GSE debt and on GSE-guaranteed mortgages have widened appreciably of late. This action is being taken to reduce the cost and increase the availability of credit for the purchase of houses, which in turn should support housing markets and foster improved conditions in financial markets more generally,” the press release announcing the program said.
After the announcement, the spread narrowed sharply. The spread between 10-year Treasuries and similar Agencies narrowed by 28 basis points but remains at a historically high 132 bps.
Beginning next week, the Federal Reserve will commence buying $100 billion of GSE debt through a series of reverse auctions.
The remaining $500 billion will be used to buy mortgage-backed securities on homes that carry GSE guarantees. The Fed, through asset managers, aims to begin buying the debt by year-end. Purchases of both direct obligations and MBS are expected to take place over several quarters, the Fed said.The government announced Tuesday it will spend $600 billion to take on the obligations... more
Nov. 20 (Bloomberg) -- Fannie Mae and Freddie Mac, the mortgage-finance companies seized by the U.S. government, will suspend foreclosures and evictions over the holidays.
The six-week halt will begin Nov. 26, a day before the U.S. Thanksgiving holiday, and last through Jan. 9, the companies said in separate statements today. The hiatus is designed to give servicers more time to implement a streamlined loan modification program for struggling borrowers.
How sweet.Nov. 20 (Bloomberg) -- Fannie Mae and Freddie Mac, the mortgage-finance companies... more
Just to show that NHL teams are very aware of the economic woes fans are going through, every Saturday St. Louis Blues NHL game will be a Fannie and Freddie Mortgage Saturday...
One lucky fan who gets their ticket called will have their home mortgages paid for 4 months.Just to show that NHL teams are very aware of the economic woes fans are going... more
WASHINGTON (AP) — Freddie Mac secretly paid a Republican consulting firm $2 million to kill legislation that would have regulated and trimmed the mortgage finance giant and its sister company, Fannie Mae, three years before the government took control to prevent their collapse.
In the cross hairs of the campaign carried out by DCI of Washington were Republican senators and a regulatory overhaul bill sponsored by Sen. Chuck Hagel, R-Neb. DCI's chief executive is Doug Goodyear, whom John McCain's campaign later hired to manage the GOP convention in September.WASHINGTON (AP) — Freddie Mac secretly paid a Republican consulting firm $2 million... more
Freddie Mac and American International Group Inc., two companies bailed out by the U.S. government as the financial crisis unfolded, each contributed $250,000 for last month's Republican National Convention, Federal Election Commission filings show.
The money went to the local host committee for the convention in St. Paul, Minnesota, which raised $50 million. The committees can accept unlimited amounts from corporations, unions and individuals. While the donors' names were posted on the committee's Web site, the amounts they gave were not released until the FEC reports. The host committee for the Democratic National Convention in Denver has yet to file.
The U.S. government took over McLean, Virginia-based Freddie and Washington-based Fannie Mae last month, saying that a rise in mortgage defaults threatened the two companies. That same month, federal officials took control of New York-based AIG in exchange for an $85 billion loan to prevent the bankruptcy of the nation's biggest insurer.
Goldman Sachs Group Inc. and Morgan Stanley, New York investment banks that changed to bank holding companies and therefore put themselves under increased federal regulation, also contributed money for the Republican convention. Goldman Sachs gave $255,000, and Morgan Stanley donated $100,000. New York-based JPMorgan Chase & Co., which bought Bear Stearns Cos., contributed $100,000.
Target, Qwest, Best Buy
The largest corporate donors to the host committee were Minneapolis-based Target Corp., which gave $3 million; Denver- based Qwest Communications International Inc., with $2.9 million; and Richfield, Minnesota-based Best Buy Co. Inc., with $2.7 million.
Other big corporate givers included San Jose, California- based Cisco Systems Inc., $1.8 million; Minnetonka, Minnesota- based UnitedHealth Group Inc., $1.5 million; San Antonio-based AT&T Inc., $1.4 million; and Redmond, Washington-based Microsoft Corp., $1.3 million.
New York Jets owner Robert Johnson IV, who has raised more than $500,000 for Republican presidential nominee John McCain's campaign, contributed $500,000. The host committee also received $25,000 from the Saginaw Chippewa, an Indian tribe formerly represented by ex-Republican lobbyist Jack Abramoff, who is now in prison. The Senate Indian Affairs Committee, then chaired by McCain, a senator from Arizona, held a series of hearings on Abramoff's representation of Indian tribes. Freddie Mac and American International Group Inc., two companies bailed out by the... more
All this credit-crunching and crashing, McCaining and Palining is beginning to get me down. I think I'm suffering from forthcoming depression. Here's something to take your mind off it all.
Another stupid song from Brian & Krysstal's new CD "Spudcast" http://www.briandamage.netAll this credit-crunching and crashing, McCaining and Palining is beginning to get me... more
Like I have said in the past : Repeat the government's mantra over and over again until you believe it : Strong Dollar, Sound Economy, All is Well, Jobs will not be Lost, Economic Fundamentals are Good.Like I have said in the past : Repeat the government's mantra over and over again... more
