"A steady hand for troubled Freddie; Ex-Putnam chief could take reins" by Todd Wallack and Jenifer B. McKim, Globe Staff | July 2, 2009
Charles “Ed’’ Haldeman Jr. -- who this week ended his seven-year tenure at Boston’s Putnam Investments - has been recommended by Freddie Mac’s board to be its chief executive.... the second prominent Boston businessman to try to fix Freddie Mac.
Richard Syron, who ran the Federal Reserve Bank of Boston, was hired as Freddie’s chief executive in 2003 after a $5 billion accounting scandal. He resigned in September after failing to prevent the company’s slide into government receivership....
Yup, Federal Reserve, Goldmans, whatever.
Related: Freddie Mac CEO gets $19.8 million in 2007
Haldeman has no background in the housing or mortgage industries, nor any Washington experience. He would face a challenge even greater than Syron did.
Perfect guy for the job, huh?
Haldeman - who has homes in Boston and Philadelphia - became the board’s top candidate because of his experience running a large organization with problems in finances....
Freddie Mac and its sister company, Fannie Mae, were created by Congress to provide funding to mortgage markets, and together they own or guarantee about half of the nation’s home loans. Both were taken over by the US government last summer.
Yesterday, Syron said Haldeman would not have one problem he faced, serving two masters: the government, especially members of Congress who wanted to increase homeownership among constituents; and shareholders, who wanted it run in the most profitable fashion. Freddie’s shareholders were wiped out in the government takeover....
US Representative Barney Frank, chairman of the House committee that deals with housing matters, said once the real estate crisis ebbs, the government must decide how to restructure Fannie and Freddie. He said the private mission of financing the mortgage sector, and the public mission of promoting affordable housing are in conflict.
Related: Frank Fiddled With Bailout Funds (And Other Frauds)
Barney Frank Benefited From Bailout Bill
That's your watchdog, 'murka! What an embarrassment to Massachusetts.
--more--"
"Fannie-Freddie overhaul may be imminent; ‘Bad bank’ might be created to hold their toxic assets" by Zachary A. Goldfarb and David Cho, Washington Post | August 6, 2009
Related: No One Wants to Touch Toxic Turds
WASHINGTON - The Obama administration is considering an overhaul of Fannie Mae and Freddie Mac that would strip the mortgage finance giants of hundreds of billions of dollars in troubled loans and create a new structure to support the home-loan market, government officials said.
The bad debts the firms own would be placed in new government financial institutions - so-called “bad banks’’ - that would take responsibility for collecting as much of the outstanding balance as possible. What would be left would be two healthy financial companies with a clean slate.
And a LOOTED TAXPAYER!
The moves would represent one of the most dramatic reorderings of the badly shattered housing finance system since Fannie Mae was created by Congress to support mortgage lending during the Great Depression. Both Fannie Mae and Freddie Mac have government charters to buy home loans from banks, which they repackage and sell to investors. The banks can use the proceeds to offer more loans to home buyers.
That is HOW WE GOT INTO THIS MESS -- with a "quasi" GOVERNMENT agency FACILITATING IT! But GOVERNMENT and the FED GENIUSES are NOW GOING to FIX the PROBLEM!
The leviathans became emblematic of the financial crisis when they were effectively nationalized in September, amid a market meltdown that revealed much of their holdings to be troubled. The government has since pledged more than $1.5 trillion, including $85 billion in direct aid, to keep the mortgage market working through Fannie Mae and Freddie Mac.
Oh, THAT SHATTERS AIG's $182 billion into pieces!
Related: The $24 TRILLION Dollar Question
The preliminary proposal, one of several under discussion, is scheduled to be taken up by the White House’s National Economic Council today. “It should come as no surprise that the administration is thinking through’’ wholesale changes, said Andrew Williams, a Treasury Department spokesman. Internal discussions began earlier this year and now are entering a more serious phase.
National Economic Council Director Lawrence Summers has long wanted to overhaul the companies.
Related: Censoring Larry Summers' Conflict-of-Interest
The government’s efforts so far “have taken the risk out of those two firms,’’ Treasury Secretary Timothy Geithner said recently. “The only question that remains is what form, what structure they ultimately will take.’’
Pfft! I've stopped listening to that lying weasel.
In an interview yesterday announcing that he would step down this month, James Lockhart, the chief regulator of Fannie Mae and Freddie Mac, said there needs to be a “good bank, bad bank’’ structure. The “bad bank’’ would be a depository for Fannie Mae’s and Freddie Mac’s toxic assets.
Otherwise known as the TAXPAYER'S BANK!
Then, the government could create new companies, if it chose, that would attract private investment in support of mortgage finance. Options for the “good banks’’ include consolidating the firms into a single government agency, leaving mortgage finance purely to private banks, or maintaining a hybrid model.
The National Economic Council has looked at the “bad bank’’ option, among many others. Any final decision would come after talks involving the White House, the Treasury, the Department of Housing and Urban Development, and the Federal Housing Finance Agency.
A major problem has been that the firms own and insure trillions of dollars of existing mortgages. With the economy still in a deep recession, with joblessness rising and defaults on home loans expected to continue to increase, there is great uncertainty over the size of future losses at Fannie Mae and Freddie Mac. That, in turn, is likely to discourage investors.
Yeah, suck on this, taxpayers and homeowners.
WASHINGTON - Fannie Mae plans to tap nearly $11 billion in new government aid after posting another massive quarterly loss as the taxpayer bill from the housing market bust keeps growing.
And yet they are TRYING TO TELL US WE MADE a PROFIT on the bailout, readers.
The mounting price tag for the rescue of Fannie and its government-sponsored sibling, Freddie Mac, is surpassed only by that of insurer American International Group, which has received $182.5 billion from the government.
Actually, I think it is more (keep reading)!
Fannie Mae’s new request for $10.7 billion from the Treasury will bring the total for Fannie and Freddie to nearly $96 billion. Freddie is expected to report its quarterly results today. The government has pledged up to $400 billion in aid for the two companies, which play a vital role in the mortgage market by purchasing loans from banks and selling them to investors.
That is HOW THIS WHOLE MESS STARTED!!!!!!!
They have been under government control since September, when their near-collapse helped set off the financial crisis. Together, Fannie and Freddie own or guarantee almost 31 million home loans worth about $5.4 trillion - about half of all US home mortgages.
Yeah, that is a LOT MORE on the HOOK than a piddly $182 billion, huh?
With assets of that size, “it’s hard for their problems to be small,’’ said Karen Shaw Petrou, managing partner at Federal Financial Analytics, a consulting firm that advises financial institutions. Fannie Mae posted a second-quarter loss of $15.2 billion, or $2.67 per share, including $411 million in dividend payouts. That compares with a loss of $2.6 billion, or $2.54 per share, a year ago period.
They could still pay a "dividend?"
Related: U.S. Taxpayers Get Screwed in Fannie
The results were driven by $18.8 billion in credit losses due to declining housing market conditions, made worse by rising unemployment.... The two companies lowered their standards for borrowers during the real estate boom and are reeling from the bust. High-risk loans, now defaulting at a record pace, have come back to haunt the companies.
With what, a taxpayer bailout? I'm sure they are trembling at night.
Worse still, the recession is causing formerly reliable homeowners with good credit to default.
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So what did Freddie report?
"AIG earns $1.82b; Freddie Mac in loss as Berkshire gains" by Associated Press | August 8, 2009
In other earnings news yesterday, Freddie Mac posted a quarterly loss of $374 million, or 11 cents a share, including $1.1 billion in dividends paid to the government....
They LOST MONEY but made sure they PAID INVESTORS, huh?
For Freddie Mac, the government-controlled mortgage finance company escaped the second fiscal quarter without asking the government for any new financial aid, but still expects to need more federal help in the future. Excluding the payments in dividends to the government, the company would have earned $768 million.....
The McLean, Va. lender was able to maintain a positive net worth of $8.2 billion in the quarter ended June 30. The Treasury Department has provided Freddie Mac with $51 billion....
Then WHY DO THEY NEED MORE HELP?
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So how has the bailout gone, huh?
"Mortgage giants struggle a year after takeover" by Alan Zibel, AP Real Estate Writer | September 4, 2009
WASHINGTON --A year after the near-collapse of Fannie Mae and Freddie Mac, the mortgage giants remain dependent on the government for survival and there is no end in sight.
The companies, created by the government to ensure the availability of home loans, have tapped about $96 billion in government aid since they were seized a year ago this weekend. Without that money, the firms could have gone broke, leaving millions of people unable to get a mortgage.
Millions can't anyway!
Many questions remain about Fannie and Freddie's future, but several things are clear: The companies are unlikely to return to their former power and influence, the bailout is sure to cost taxpayers even more money and the government will have a big role in the U.S. mortgage market for years to come.
But we are making a profit off the bailout as banks make a remarkable turnaround.
Fannie Mae was created in 1938 in the aftermath of the Great Depression. It was privatized 30 years later to limit budget deficits during the Vietnam War. In 1970, the government formed its sibling and competitor Freddie Mac.
The companies boomed over the past decade, buying mortgages from lenders, pooling them into bonds and selling them to investors. But critics called them unnecessary, arguing that Wall Street could support the mortgage market itself.
I guess WRECKING the U.S. ECONOMY was no big deal, huh?
That argument has faded in the wreckage of the failed loans that led to the housing bust.
Related: Wall Street Back the Way It Was
Investors have fled any mortgage investment that doesn't have the government standing behind it....
So if it fails, YOU WILL SUFFER the LOSS TAXPAYERS -- not the LOOTERS WHO CAUSED IT!
The government controls nearly 80 percent of each company, and their problems are growing as defaults and foreclosures continue to skyrocket.
Sigh. Yup, but we are recovering.
"It's much worse than anybody thought," said Paul Miller, an analyst with FBR Capital Markets.
Except for the BLOGGERS who have been SCREAMING ABOUT IT for YEARS!
It could be another year before the final taxpayer tab for Fannie and Freddie is known, and that outcome will depend on when delinquencies and foreclosures finally crest.
Do you even want to see that bill?
Barclays Capital predicts the companies will need anywhere from $160 billion to $200 billion out of a potential $400 billion lifeline, which the Obama administration expanded from the original $200 billion set last fall. Most analysts don't expect the money to be returned anytime soon, if at all.
I'm not.
"What will ultimately end up happening," said Barclays analyst Ajay Rajadhyaksha, "is that the U.S. taxpayer swallows the bill."
Despite federal control, Fannie and Freddie have recently surged on Wall Street....
Not despite, BECAUSE OF!
When YOU KNOW TAXPAYERS are PICKING UP the TAB....
But most analysts still say the companies stocks will be worthless in the long term.
That's why the BAD BANK for the TAXPAYER!
The Obama administration doesn't expect to announce its plans for the two companies until early next year, but powerful interest groups aren't waiting until then....
Fannie and Freddie don't directly make loans, but they exert enormous influence over the industry by issuing detailed standards for the loans they will purchase. Lenders must feed their borrowers into Fannie and Freddie's computer systems, which evaluate borrowers based on their credit scores and the size of their down payment....
Related: Fed Sticks Another $600 Billion Up AmeriKa's Fannie
Fed Shopping Spree
One Final Fannie F*** From the Boston Globe
