tagged w/ Freddie Mac
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Danny Schechter: "This is a 50 state Katrina"
Danny Schechter, "The News Dissector," is a former network TV producer, radio newscaster, and edits MediaChannel.org. He has written nine books on media themes. His latest, Squeezed: America As The Bubble Bursts was inspired by his latest film, In Debt We Trust: America Before The Bubble BurstsDanny Schechter: "This is a 50 state Katrina"
Danny Schechter, "The... more
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In addition to throwing economic fundamentals out the window, Paul points out the peculiarities that mortgage brokers must now be fingerprinted and that credit card transactions will now be reported to the I.R.S. CONgress ≠ PROgress.
The following is excerpted from Congressman Paul's Statement on H.R. 3221:
"Madam Speaker, For several years, followers of the Austrian school of economics have warned that unless Congress moved to end the implicit government guarantee of Fannie Mae and Freddie Mac, and took other steps to disengage the US Government from the housing market, America would face a crisis in housing. This crisis would force Congress to chose between authorizing a taxpayer bailout of Fannie and Freddie, and other measures increasing government’s involvement in housing, or restoring a free-market in housing by ending government support for Fannie and Freddie and repealing all laws that interfere in housing. The bursting of the housing bubble, and the recent near-collapse in investor support for Fannie and Freddie has proven my fellow Austrians correct. Unfortunately, but not surprisingly, instead of ending the prior interventions in the housing market that are responsible for the current crisis, Congress is increasing the level of government intervention in the housing market. This is the equivalent of giving a drug addict another fix, which will only make the necessary withdrawal more painful.
The provision giving the Treasury Secretary a blank check to purchase Fannie and Freddie stock not only makes the implicit government guarantee of Fannie and Freddie explicit, it represents another unconstitutional delegation of Congress’ Constitutional authority to control the allocation of taxpayer dollars. While the Treasury Secretary has to file a report with Congress, the lack of any effective standards for the expenditure of funds makes it impossible for Congress to perform effective oversight on Treasury’s expenditures.
HR 3221 also takes another troubling step toward the creation of surveillance state by creating a Nationwide Mortgage Licensing System and Registry. This federal database will contain personal information about anyone wishing to work as a “loan originator.” “Loan originator" is defined broadly as anyone who "takes a residential loan application; and offers or negotiates terms of a residential mortgage loan for compensation or gain." According to some analysts, this definition is so broad as to cover part-time clerks and real estate agents who receive even minimal compensation from "originators." Additionally, this database forced on industry will be funded by fees paid to the federal banking agencies, yet another costly burden to the American taxpayers.
Among the information that will be collected from loan originators for inclusion in the federal database are fingerprints. Madam Speaker, giving the federal government the power to force Americans who wish to work in real estate to submit their fingerprints to a federal database opens the door to numerous abuses of privacy and civil liberties and establishes a dangerous precedent. Fingerprint databases and background checks have been no deterrent to espionage and fraud among governmental agencies, and will likewise fail to prevent fraud in the real estate market. I am amazed to see some members who are usually outspoken advocates of civil liberties and defenders of the Fourth Amendment support this new threat to privacy."
(End of excerpt)
Full transcript of Congressman Paul's Statement
http://www.house.gov/paul/congrec/congrec2008/cr072408h.htm
For more information on H.R. 3221 please visit THOMAS (The Library of Congress)
http://thomas.loc.gov/cgi-bin/bdquery/z?d110:h.r.03221:
In addition to throwing economic fundamentals out the window, Paul points out the... more
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Today as an American you got shafted. Unlimited printed money to bail out Freddie and Fannie, Raise the National debt by $800,000,000,000. Finger printing of all MORTGAGE people, and now ALL credit card purchases over the NET reported to the IRS!! All in one VOTE...IT PASSED!! Take 8 minutes and listen! Horrible!!Today as an American you got shafted. Unlimited printed money to bail out Freddie and... more
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Treasury Secretary Henry Paulson's rescue package for Fannie Mae and Freddie Mac would probably cost taxpayers $25 billion, the Congressional Budget Office said.
``There is a significant chance -- probably better than 50 percent -- that the proposed new Treasury authority would not be used before it expired at the end of December 2009,'' the nonpartisan agency, which provides economic and budget analysis for lawmakers, said in a report today.
Democratic lawmakers were seeking to determine the cost of Paulson's plan to offer emergency funding to Fannie Mae and Freddie Mac, which own or guarantee almost half of the $12 trillion in U.S. home loans outstanding. Paulson today said Congress understands ``the demands'' of the housing downturn and will likely approve this week his request to help the government- sponsored enterprises.Treasury Secretary Henry Paulson's rescue package for Fannie Mae and Freddie Mac... more
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The disaster of the housing market has been well documented. Not only are home being abandoned, as people find that payments are beyond their means, companies like Fannie Mae and Freddie Mac financial trouble that these mortgage companies are in need of government rescue. The people will shoulder the economic burden.
In striking contrast, the Chief Executive Officer of Freddie Mac will be just fine:
“NEW YORK - Freddie Mac Chairman and Chief Executive Richard Syron pocketed nearly $19.8 million in compensation last year, according to a Securities and Exchange Commission filing Friday, even though the mortgage company’s stock lost half its value in 2007.”
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What is wrong with this picture? People are losing their homes. Stock value plummets. And the CEO is able to bank tens of millions of dollars.
At the risk of falling in what Senator Gramm might call the “whiners” camp, this just isn’t right. The consequence of being major part of a financial debacle is to be awarded millions and millions of dollars. How can that be justified, in any manner?
Catherine ForsytheThe disaster of the housing market has been well documented. Not only are home being... more
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This week, with the nation’s financial infrastructure crumbling before our very eyes, the nation’s top two economic policy makers made their way to the Congress for an extraordinary episode of political theater. Fannie Mae and Freddie Mac, the quasi-government entities that form the backbone of America’s gargantuan mortgage market, appeared to be cracking. To the somewhat bewildered members of Congress, Ben Bernanke and Henry Paulson offered radical remedies to save the lenders. Despite the fact that the proposed policies would thoroughly redefine America’s supposedly capitalistic pedigree, the moves were presented as wholly inevitable, and in the end, benevolent and costless.
If you are looking for a new chapter in American history, it has just begun.
The most memorable moment in the episode came when Secretary Paulson explained that the best way to minimize the chances that Fannie Mae and Freddie Mac will need a government bailout would be for Congress to grant the Treasury unlimited authority to lend to the two institutions. His analogy: When the bad guys see a bazooka on your hip, you are less likely to be challenged to a gunfight...
... At present, the best the government can do for housing and the economy is to leave both alone, cease interference in the free market, restore sound money, and allow capitalism to work.
Unfortunately, the laws of capitalism are now demanding that home prices continue to fall precipitously. But, based on the speed in which our government, public and financial institutions are willing to abandoned free market principals at the first whiff of economic pain, the likelihood that this impulse will take hold is increasingly remote. So hunker down as the United States finds itself on the express track to state socialism with Paulson’s Bazooka locked, loaded and pointed right at us. When the government pulls the trigger the blast will blow the dollar, and what’s left of our capitalist economy, to smithereens."
(End of excerpt)
Full commentary "Armed and Dangerous" (July 18th, 2008) at link by Peter Schiff, President & Chief Global Strategist// Euro Pacific CapitalThis week, with the nation’s financial infrastructure crumbling before our very... more
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WASHINGTON — Alarmed by the sharply eroding confidence in the nation’s two largest mortgage finance companies, the Bush administration on Sunday asked Congress to approve a sweeping rescue package that would give officials the power to inject billions of federal dollars into the beleaguered companies through investments and loans.
In a separate announcement, the Federal Reserve said it would make one of its short-term lending programs available to the two companies, Fannie Mae and Freddie Mac. The Fed said that it had made its decision “to promote the availability of home mortgage credit during a period of stress in financial markets.”
An official said that the Fed’s decision to permit the companies to borrow from its so-called discount window was approved at the request of the Treasury but that it was temporary and would probably end once Congress approved Treasury’s plan. Some officials briefed on the plan said Congress could be asked to extend the total line of credit to the institutions to $300 billion.
WASHINGTON — Alarmed by the sharply eroding confidence in the nation’s two... more
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Buyers flocked to Freddie Mac's $3 billion debt sale on Monday, just hours after the U.S. government pledged support for the nation's top mortgage finance agencies, but the steps failed to stem growing panic on Wall Street.
European and Asian stock markets rallied after the Treasury Department and Federal Reserve stepped in on Sunday with offers of richer credit lines, equity purchases and direct access to central bank coffers should Freddie and its sister agency Fannie Mae run into deeper financial trouble.
However, U.S. stocks quickly shed initial gains as investors feared the steps will do little stem the losses spreading through the financial sector in the wake of a deflating housing market and stalling economy.
Friday's failure of mortgage lender IndyMac Bancorp Inc, the third-largest bank collapse in U.S. history, served as a painful reminder of the financial strains.
Fannie and Freddie together finance about half of U.S. homes, and are seen as vital for stabilizing the worst housing slump since the Great Depression some 80 years ago. But as mortgage defaults rise even among borrowers with seemingly solid credit, concerns have grown that the two agencies may need more money to cover heavier losses.
Their shares turned lower by midday, after starting the session sharply higher, with Freddie Mac's shares tumbling more than 15 percent.
"Ultimately, we do not view these (government) measures, dramatic as they look, as either a turning point for the U.S. housing market or as a sign that the downturn will be much worse than previously believed," Goldman Sachs economist Jan Hatzius wrote in a note to clients.
"They simply reaffirm our long-held -- and widely shared -- view that the government will do everything it can to avert a meltdown in the conforming mortgage market and will continue to stand behind the government-sponsored enterprises," he said.Buyers flocked to Freddie Mac's $3 billion debt sale on Monday, just hours after... more
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kushan
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3 years ago
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Shares in US mortgage firms Freddie Mac and Fannie Mae dropped by as much as 50% in rollercoaster trading on Friday amid concerns for their future.
Investors are concerned that the government may have to step in to rescue the two firms.
But the US Treasury said it would back them in their current form, helping their shares to recover some ground.
The companies are behind half of all US mortgages and have been hard hit by the slowdown in the US housing market.
The two companies play an important role in the financial markets in providing funding for home loans by buying up mortgages and packaging them as investments.
As mortgage backers, the companies have had to pay out when homeowners have defaulted on their loans.
Both firms defended their finances, saying they had enough capital to weather the housing slump.
Shares in the two firms trimmed losses after US Treasury Secretary Henry Paulson signalled he was not on the verge of taking Fannie Mae and Freddie Mac into public hands.
President Bush reflects on tough times for the US economy
"Our primary focus is supporting Fannie Mae and Freddie Mac in their current form as they carry out their important mission," he said.
President George W Bush was briefed on Fannie Mae and Freddie Mac earlier on Friday.
Mr Bush said Mr Paulson assured him that he and Federal Reserve Chairman Ben Bernanke "will be working this issue very hard".
After a volatile trading session, Freddie Mac shares closed down 3.1% at $7.75.
The stock had plunged as much as 51% shortly after the market opened and briefly vaulted into positive territory at one point.
Shares of Fannie Mae ended the day down 22.4% at $10.25 after sliding as much as 49% to a 19-year low of $6.68.
US Senator Christopher Dodd said the Federal Reserve was considering allowing Fannie Mae and Freddie Mac to borrow directly from the central bank, which also helped the shares to recover.
Meanwhile, a California-based mortgage lender IndyMac was taken over by US regulators on Friday.
Earlier this week, the bank said that it would stop most lending, leading depositors to withdraw cash.
The US Office of Thrift Supervision said it had transferred IndyMac's operations to the Federal Deposit Insurance Corporation after determining that is unlikely to meet its depositors demands.
IndyMac had been struggling to raise funds and stay in business in one of the states worst hit by the US housing market slump.
There has been a sense of unfolding crisis surrounding the companies this week according to the BBC's New York business correspondent, Greg Wood.
Today our primary focus is supporting Fannie Mae and Freddie Mac in their current form as they carry out their important mission
Treasury Secretary Henry Paulson.Shares in US mortgage firms Freddie Mac and Fannie Mae dropped by as much as 50% in... more
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Mortgage giants Fannie Mae and Freddie Mac have been hit hard by the housing crisis accumulating nearly $5 trillion in debt (half of the U.S. government). If the housing market gets worse, Fannie Mae may not have the funds to cover the debt and be forced to close.
Fannie Mae and Freddie Mac hold 52% of all mortgages. They are an organization that allows for banks to make mortgage loans at lower interest rates and lower mortgage payments. However, if Fannie Mae and Freddie Mac are forced to close monthly housing payments will go up and the price of houses will decrease greatly. This fact may very well force the government to intervene and become responsible for mortgage loans.Mortgage giants Fannie Mae and Freddie Mac have been hit hard by the housing crisis... more
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Alarmed by the growing financial stress at the nation’s two largest mortgage finance companies, senior Bush administration officials are considering a plan to have the government take over one or both of the companies and place them in a conservatorship if their problems worsen, people briefed about the plan said on Thursday.
The companies, Fannie Mae and Freddie Mac, have been hit hard by the mortgage foreclosure crisis. Their shares are plummeting and their borrowing costs are rising as investors worry that the companies will suffer losses far larger than the $11 billion they have already lost in recent months. Now, as housing prices decline further and foreclosures grow, the markets are worried that Fannie and Freddie themselves may default on their debt. Alarmed by the growing financial stress at the nation’s two largest mortgage... more
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bshipp
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3 years ago
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