Another quarter, another Fannie Mae bailout

[blackangst1]

Bailing out investors from the Bush era of the "Ownership Society"? Anybody remember that, or how the GSE's were manipulated into making shaky loans to support it, courtesy of their "regulator", HUD? Or all the money that mortgage brokers and investment bankers raked in selling deregulated free market bunk to the GSE's?

What a great deal for the financial elite- buy Uncle Sam's bonds so he can pay off what the GSE's owe on your mortgage bonds... Win-win!

Thats right. Because Clinton certainly didnt do anything to fuel the fire *cough* American Homeownership and Economic Opportunity Act of 2000 *cough* and *cough* The National Homeownership Strategy: Partners in the American Dream *cough* and Bush is the one, not Clinton, who in 1994 told HUD Secretary Cisneros to come up with a plan for lower income people to quality for housing, and to relax HUD guidelines, also lets not forget Bush is the one who created credit default swaps....in the early 90's when he was working on his father's re-election campaign.

/nod

Thanks for reminding us

 

[Jhhnn]

Thats right. Because Clinton certainly didnt do anything to fuel the fire *cough* American Homeownership and Economic Opportunity Act of 2000 *cough* and *cough* The National Homeownership Strategy: Partners in the American Dream *cough* and Bush is the one, not Clinton, who in 1994 told HUD Secretary Cisneros to come up with a plan for lower income people to quality for housing, and to relax HUD guidelines, also lets not forget Bush is the one who created credit default swaps....in the early 90's when he was working on his father's re-election campaign.

/nod

Thanks for reminding us

More lame obfuscations and finger pointing at Clinton... Tell me, O Sage, what was the default rate on Clinton era homeloans made through the auspices of the GSE's? Why was it different than during the Bush years?

Maybe because Bush regulators were either prohibited from regulating or became cheerleaders for the rip-off home loan industry?

Like this-

http://www.washingtonpost.com/wp-dyn/content/article/2008/11/22/AR2008112202213.html

http://economicsofcontempt.blogspot.com/2008/03/cutting-through-red-tape-with-chainsaw.html

Love the pic in the second link...

 

[Kappo]

Bailing out investors from the Bush era of the "Ownership Society"? Anybody remember that, or how the GSE's were manipulated into making shaky loans to support it, courtesy of their "regulator", HUD? Or all the money that mortgage brokers and investment bankers raked in selling deregulated free market bunk to the GSE's?

What a great deal for the financial elite- buy Uncle Sam's bonds so he can pay off what the GSE's owe on your mortgage bonds... Win-win!

But.. but.. I thought you voted for CHANGE!

 

[Patranus]

Why did you edit out your animated gif? I guess you realized that it was racist?

Edit out what gif?
The one where the linked image shack account got disabled to I linked to another one?

 

[blackangst1]

More lame obfuscations and finger pointing at Clinton... Tell me, O Sage, what was the default rate on Clinton era homeloans made through the auspices of the GSE's? Why was it different than during the Bush years?

Maybe because Bush regulators were either prohibited from regulating or became cheerleaders for the rip-off home loan industry?

Like this-

http://www.washingtonpost.com/wp-dyn/content/article/2008/11/22/AR2008112202213.html

http://economicsofcontempt.blogspot.com/2008/03/cutting-through-red-tape-with-chainsaw.html

Love the pic in the second link...

Did I say Clinton was soley responsible? No, I didnt. But he sure as fuck contributed. Also, if you know anything about ecomics, you would know it takes years for loans to default. Using your logic, this mess we're in is Obama's fault 100%. Also, are you blaming Bush for the lack of regulation on swaps? lol Youre an idiot man if you are...and have noooo idea how they work. And guess what genious...nothing has changed with Obama in office. They still arent regulated.

Jesus, you arent very bright, are you.

edit: Im not sure why youre focused on GSE's. They use no taxpayer money, and arent solicited as guaranteed. CDS's, on the other hand, are an issue. It is estimated $55-$65 TRILLION is outstanding. That is close to, or exceeding, the planet's GDP. Yet your boy in office isnt doing shit about it. Who's the bad guy again? Maybe you can pull your partisan head out of your ass and realize it is a culmination of bad decisions going back 3 presidencies, up to and definately including this one. They all share blame.

 

[Jhhnn]

Check the OP, blackangst1- the subject is more bailouts for Fannie Mae, one of two GSE's. It *is* the subject at hand, right? that's why I'm focusing on it, as if that required explanation. Changing the subject to swaps doesn't make you look smart, at all, although the two subjects are related.

Mortgage default rates are at historical highs for mortgages of all kinds originated in 2005, 2006, and 2007, with 2004 not far behind. They're anticipated to go even higher. Loans originated in the Clinton years and early Bush years have entirely normal default rates.

It was the Bush Admin who took over the GSE's, anyway, promised to pay the bondholders. While not explicit, govt responsibility was implicit, and anybody who actually bought GSE securities knew it.

CDS were just part of the greater illusion, based on the idea that any investment was safe if properly hedged, as if such a notion could possibly be true. When the Clinton admin left them unregulated, the whole thing was in its infancy, a small fraction of what they became under the not so watchful eye of the Bush admin, who were *ideologically opposed* to the idea of banking regulation, and under the non-guidance of Greenspan's FRB, who acted in concert with the Bush admin to create a monster.

The Obama admin hasn't acted? Why not? Maybe because there are 41 Republicans in the Senate, doing their dead level best to block meaningful reforms... even with the economy lying face down in the dirt, they're still *ideologically opposed* to meaningful banking regulation, and anybody with a lick of sense knows it.

 

[Blackjack200]

Edit out what gif?
The one where the linked image shack account got disabled to I linked to another one?

I couldn't see the second location from my job, thought you had taken it down. Editing post.

 

[blackangst1]

Check the OP, blackangst1- the subject is more bailouts for Fannie Mae, one of two GSE's. It *is* the subject at hand, right? that's why I'm focusing on it, as if that required explanation. Changing the subject to swaps doesn't make you look smart, at all, although the two subjects are related.

Mortgage default rates are at historical highs for mortgages of all kinds originated in 2005, 2006, and 2007, with 2004 not far behind. They're anticipated to go even higher. Loans originated in the Clinton years and early Bush years have entirely normal default rates.

It was the Bush Admin who took over the GSE's, anyway, promised to pay the bondholders. While not explicit, govt responsibility was implicit, and anybody who actually bought GSE securities knew it.

CDS were just part of the greater illusion, based on the idea that any investment was safe if properly hedged, as if such a notion could possibly be true. When the Clinton admin left them unregulated, the whole thing was in its infancy, a small fraction of what they became under the not so watchful eye of the Bush admin, who were *ideologically opposed* to the idea of banking regulation, and under the non-guidance of Greenspan's FRB, who acted in concert with the Bush admin to create a monster.

The Obama admin hasn't acted? Why not? Maybe because there are 41 Republicans in the Senate, doing their dead level best to block meaningful reforms... even with the economy lying face down in the dirt, they're still *ideologically opposed* to meaningful banking regulation, and anybody with a lick of sense knows it.

Fair enough. We'll stick to GSE's. How about we not play history revisionist then? Lets try and attack the facts at hand, shall we?

http://online.wsj.com/article/SB123137220550562585.html

the Bush administration warned in the budget it issued in April 2001 that Fannie and Freddie were too large and overleveraged. Their failure "could cause strong repercussions in financial markets, affecting federally insured entities and economic activity" well beyond housing.

Wait what? Bush warned about this?

Mr. Bush wanted to limit systemic risk by raising the GSEs' capital requirements, compelling preapproval of new activities, and limiting the size of their portfolios. Why should government regulate banks, credit unions and savings and loans, but not GSEs? Mr. Bush wanted the GSEs to be treated just like their private-sector competitors.
But the GSEs fought back. They didn't want to see the Bush reforms enacted, because that would level the playing field for their competitors. Congress finally did pass the Bush reforms, but in 2008, after Fannie and Freddie collapsed.

Aaawwwww Bush DID try to do something I guess.

When Republican Richard Shelby of Alabama, then chairman of the Senate Banking Committee, pushed for comprehensive GSE reform in 2005, Democrat Sen. Chris Dodd of Connecticut successfully threatened a filibuster. Later, after Fannie and Freddie collapsed, Mr. Dodd asked, "Why weren't we doing more?" He then voted for the Bush reforms that he once called "ill-advised."
But Mr. Dodd wasn't the only Democrat to heap abuse on the Bush reforms. Rep. Barney Frank of Massachusetts defended Fannie and Freddie as "fundamentally sound" and labeled the president's proposals as "inane." He later voted for the reforms. Sen. Charles Schumer of New York dismissed Mr. Bush's "safety and soundness concerns" as "a straw man." "If it ain't broke, don't fix it," was the helpful advice of both Sen. Thomas Carper of Delaware and Rep. Maxine Waters of California. Rep. Gregory Meeks of New York berated a Bush official at a hearing, saying, "I am just pissed off" at the administration for raising the issue.

What were you saying about the GOP in congress again?

The more the president pushed for reform, the more they bought. Peter Wallison of the American Enterprise Institute and Charles Calomiris of the Columbia Business School suggest $1 trillion of this debt was subprime and "liar loans," almost all bought between 2005 and 2007. This bulk-up in risky paper made it possible for banks to lend imprudently on a massive scale.

I guess Bush made him do it huh?

But wait theres more...

http://gatewaypundit.firstthings.co...17-times-in-2008-alone-dems-ignored-warnings/

Bush Called For Reform of Fannie Mae & Freddie Mac 17 Times in 2008 Alone… Dems Ignored Warnings

http://www.washingtonpost.com/wp-dyn/content/article/2008/09/11/AR2008091102841.html

Starting in 2002, White House and Treasury Department economic policy staffers, with support from then-Chief of Staff Andy Card, began to press for meaningful reforms of Fannie, Freddie and other government-sponsored enterprises (GSEs).

President Bush was receptive to reform. He withheld nominees for Fannie and Freddie's boards -- a presidential privilege. While it would have been valuable politically to use such positions to reward supporters, the president put good policy above good politics.

In subsequent years, officials at Treasury and the Council of Economic Advisers (especially Chairmen Greg Mankiw and Harvey Rosen) pressed for the following: Requiring Fannie and Freddie to submit to regulations of the Securities and Exchange Commission; to adopt financial accounting standards; to follow bank standards for capital requirements; to shrink their portfolios of assets from risky levels; and empowering regulators such as the Office of Federal Housing Oversight to monitor the firms.
http://gatewaypundit.firstthings.co...17-times-in-2008-alone-dems-ignored-warnings/
The administration did not accept half-measures. In 2005, Republican Mike Oxley, then chairman of the House Financial Services Committee, brought up a reform bill (H.R. 1461), and Fannie and Freddie's lobbyists set out to weaken it. The bill was rendered so toothless that Card called Oxley the night before markup and promised to oppose it. Oxley pulled the bill instead.

During this period, Sen. Richard Shelby led a small group of legislators favoring reform, including fellow Republican Sens. John Sununu, Chuck Hagel and Elizabeth Dole. Meanwhile, Dodd -- who along with Democratic Sens. John Kerry, Barack Obama and Hillary Clinton were the top four recipients of Fannie and Freddie campaign contributions from 1988 to 2008 -- actively opposed such measures and further weakened existing regulation.

But hey...dont let facts get in the way of a good Bush bashing
http://www.sodahead.com/united-stat...3-to-regulate-fannie-mae-17-times/blog-29077/

 

[TwinsenTacquito]

So now that we're just putting bandaids over bandaids, how long until they admit they were wrong? Oh, never. Because all they care about is redirecting tax money into their pockets. They're helping us! Can't you see? They're taking our money and giving it to people. That helps us!

 

[heyheybooboo]

Fair enough. We'll stick to GSE's. How about we not play history revisionist then? Lets try and attack the facts at hand, shall we?

http://online.wsj.com/article/SB123137220550562585.html



Wait what? Bush warned about this?



Aaawwwww Bush DID try to do something I guess.



What were you saying about the GOP in congress again?



I guess Bush made him do it huh?


.....



But hey...dont let facts get in the way of a good Bush bashing
[/URL]

Your proof is a Karl Rove opinion piece and a blog?

Your Fail is a P&N Classic.

Tell us again how much legislation was approved by the GOP-controlled Congress (instead of deflecting blame on Dodd and Frank), or how many bills Bush vetoed while standing by his 'principles'?

Please show us where legislation on the 're-regulation' of the GSEs even made it out of committee to the floor during the GOP-controlled Congress.

Maybe your hero Bush was too busy managing his Wars, and tax cuts, and Part D drug programs, and K Street lobbyists, and hurricane disasters, and domestic spying, and rendition and torture (all of which 'he' didn't pay for) to encourage his GOP-controlled banking committees to bring legislation to the floor, huh?

Bush Apologists Grand Plan: Blame the Gay Guy in the Minority Party

Got any more of your 'facts'?




--

 

[StageLeft]

Well at least that huge financial regulation bill that was passed will ensure this doesn't happen again.

 

[Tristicus]

Or any less racist.

ohaigais, anything wrong about Obammy is racist.

 

[Jhhnn]

Heh. You merely cite the usual Bush Admin doublespeak, blackangst1. Words are one thing, deeds are another, as evidenced by more Bush-speak wrt "smaller govt" even as his admin grew it at the greatest rate since the Great Society. Repub efforts to "reform" the GSE's were just a matter of establishing plausible deniability, a favorite ploy.

Even as the Bushistas blathered about reforming the GSE's, their regulator, HUD, upped the % of so called "affordable" loans the agencies were required to provide. Executive bonuses depend on meeting goals, as we all know, so the GSE's turned to buying Subprime MBS from Investment banks to meet those goals... pre-packaged, sliced, diced, hedged and AAA rated too... and they lacked the staff to review all of the millions of mortgages covered under those securities.

Their other regulators pretty much got out of the way, too- with the OTS becoming a cheerleader for lenders, and the SEC swapping porn videos, while the FRB held rates very, very low for a very, very long time... citing all the wonderful "growth" such policy provided.

Congressional Dems were dumbshits about it? For sure, but they weren't the perpetrators, at all. The Bush Admin had numerous means and opportunities to rein the whole thing in, but they were *ideologically opposed* to banking regulation, believing in and expressing their belief in "self regulated banking" quite strongly. Not to mention that they exploited the whole bubble for political gain with the "Ownership Society" schtick...

http://www.washingtonpost.com/wp-dyn/content/article/2008/06/09/AR2008060902626.html

 

[blackangst1]

So now that we're just putting bandaids over bandaids, how long until they admit they were wrong? Oh, never. Because all they care about is redirecting tax money into their pockets. They're helping us! Can't you see? They're taking our money and giving it to people. That helps us!

If you honestly want an answer to this question, you should watch the video in my sig. It will answer it all.

 

[blackangst1]

Your proof is a Karl Rove opinion piece and a blog?

Your Fail is a P&N Classic.

Tell us again how much legislation was approved by the GOP-controlled Congress (instead of deflecting blame on Dodd and Frank), or how many bills Bush vetoed while standing by his 'principles'?

Please show us where legislation on the 're-regulation' of the GSEs even made it out of committee to the floor during the GOP-controlled Congress.

Maybe your hero Bush was too busy managing his Wars, and tax cuts, and Part D drug programs, and K Street lobbyists, and hurricane disasters, and domestic spying, and rendition and torture (all of which 'he' didn't pay for) to encourage his GOP-controlled banking committees to bring legislation to the floor, huh?

Bush Apologists Grand Plan: Blame the Gay Guy in the Minority Party

Got any more of your 'facts'?




--

Apperently you cant dispute the facts, and attack the author. Typical. And apperently you didnt read any other links.

And BTW blaming the minority is now the Dem's SOP. How many times have you blamed the minority GOP for the Dems failings again?

 

[blackangst1]

Heh. You merely cite the usual Bush Admin doublespeak, blackangst1.

Like I said, dont let facts get in the way of a good Bush bash

 

[Jhhnn]

Nice self portrait, blackangst1. Aren't you the least bit chagrined at having used a Rove hit piece to "prove" your point?

As I offered, above, the Bush Admin had a variety of measures they could have taken to rein in the housing bubble, purely by executive fiat, requiring no congressional approval whatsoever. But they didn't. In fact, they did exactly the opposite, covered their deeds with words to the contrary, and you somehow can't get past the words.

If I lectured the neighbor's daughter about promiscuity, boffed her myself, and passed her around to my drinking buddies- what's more significant, the lecture or the other part?

 

[blackangst1]

Nice self portrait, blackangst1. Aren't you the least bit chagrined at having used a Rove hit piece to "prove" your point?

As I offered, above, the Bush Admin had a variety of measures they could have taken to rein in the housing bubble, purely by executive fiat, requiring no congressional approval whatsoever. But they didn't. In fact, they did exactly the opposite, covered their deeds with words to the contrary, and you somehow can't get past the words.

If I lectured the neighbor's daughter about promiscuity, boffed her myself, and passed her around to my drinking buddies- what's more significant, the lecture or the other part?

Im not sure what Rove has to do with it. Either dispute what he says, or STFU. Fact is, you cant. So you attack the messenger. Lamest fucking tactic in trolling.

I stated it once, but apperently you either are too stupid to comprehend, intentionally ignored, or didnt read my post. Either way, blame lies in all of the last 3 or 4 administrations, equally. Cry Bush all you want, the fact is, your puppet of a president in the white house now hasnt done shit either, and wont. Neither will the *** in charge Pelosi. Why? Do yourself a favor and watch the video in my sig. If you cant dispute with facts, keep your hot air to yourself.

 

[CycloWizard]

(never gets old)

It's the gif that keeps on giving.

 

[Jhhnn]

The most predictable thing about Righties is they'll resort to anything to maintain denial- personal attack, frothing at the mouth, whatever raving is required to stop the flow of information, make "the enemy" go away, protect their core beliefs against the intrusion of reality.

Does the responsibility go beyond the Bush Admin? Certainly. OTOH, there are different levels of responsibility, and different ways of either accepting or denying it. When non-regulation crashed the stock market in 1929 and the banks shortly thereafter, the New Deal way of doing things largely protected us until the Reagan era. When the Reaganites tinkered with it, they brought us the stock market crash of 1987 and the S&L crisis. When some of those policies were continued thru the Clinton years, we got the LTCM fiasco and the Global Crossing and Enron flimflams. Small corrective measures were applied, even as the mortgage and derivative markets were clearly out of control, doomed to crash. The Bush Admin cheered it on and exploited it. They could have instructed their regulators to crack down, but they did the opposite. They could have instructed HUD to demand fewer (not more) "affordable" loans, but they did the opposite. They could have worked with the FRB to begin raising interest rates much earlier than what happened, but they didn't. They could have *not* overheated the economy with massive military spending and the invasion of Iraq, but they didn't do that either.

They facilitated risky behavior at every turn, including their demand that the GSE's increase their reserves, which they did, by purchasing banker supplied MBS- AAA rated, good as gold, right?

Rove's remarks that the GSE's competed with banks is entirely dishonest, as is the rest of his spiel- they enabled banks, purchased their securities, freed up capital for even more and even riskier loans...

But you can't hear me, anyway- you believe what your believe because you believe it, as in your sig...

 

[blackangst1]

The most predictable thing about Righties is they'll resort to anything to maintain denial- personal attack, frothing at the mouth, whatever raving is required to stop the flow of information, make "the enemy" go away, protect their core beliefs against the intrusion of reality.

Does the responsibility go beyond the Bush Admin? Certainly. OTOH, there are different levels of responsibility, and different ways of either accepting or denying it. When non-regulation crashed the stock market in 1929 and the banks shortly thereafter, the New Deal way of doing things largely protected us until the Reagan era. When the Reaganites tinkered with it, they brought us the stock market crash of 1987 and the S&L crisis. When some of those policies were continued thru the Clinton years, we got the LTCM fiasco and the Global Crossing and Enron flimflams. Small corrective measures were applied, even as the mortgage and derivative markets were clearly out of control, doomed to crash. The Bush Admin cheered it on and exploited it. They could have instructed their regulators to crack down, but they did the opposite. They could have instructed HUD to demand fewer (not more) "affordable" loans, but they did the opposite. They could have worked with the FRB to begin raising interest rates much earlier than what happened, but they didn't. They could have *not* overheated the economy with massive military spending and the invasion of Iraq, but they didn't do that either.

They facilitated risky behavior at every turn, including their demand that the GSE's increase their reserves, which they did, by purchasing banker supplied MBS- AAA rated, good as gold, right?

Rove's remarks that the GSE's competed with banks is entirely dishonest, as is the rest of his spiel- they enabled banks, purchased their securities, freed up capital for even more and even riskier loans...

But you can't hear me, anyway- you believe what your believe because you believe it, as in your sig...

Is that so?

I actually started lining these up one at a time, but frankly, its tedious. I would like for you to, point by point, invalidate these claims. All of the info is there, and Google will help you pull up all the info you need. I found the first few.

http://georgewbush-whitehouse.archives.gov/news/releases/2008/10/20081009-10.html

Over the past six years, the President and his Administration have not only warned of the systemic consequences of failure to reform GSEs but also put forward thoughtful plans to reduce the risk that either Fannie Mae or Freddie Mac would encounter such difficulties. In fact, it was Congress that flatly rejected President Bush's call more than five years ago to reform the GSEs. Over the years, the President's repeated attempts to reform the supervision of these entities were thwarted by the legislative maneuvering of those who emphatically denied there were problems with the GSEs.

2001

• April: The Administration's FY02 budget declares that the size of Fannie Mae and Freddie Mac is "a potential problem," because "financial trouble of a large GSE could cause strong repercussions in financial markets, affecting Federally insured entities and economic activity." (2002 Budget Analytic Perspectives, pg. 142)

2002

• May: The Office of Management and Budget (OMB) calls for the disclosure and corporate governance principles contained in the President's 10-point plan for corporate responsibility to apply to Fannie Mae and Freddie Mac. (OMB Prompt Letter to OFHEO, 5/29/02)

2003

• February: The Office of Federal Housing Enterprise Oversight (OFHEO) releases a report explaining that unexpected problems at a GSE could immediately spread into financial sectors beyond the housing market.
• September: Then-Treasury Secretary John Snow testifies before the House Financial Services Committee to recommend that Congress enact "legislation to create a new Federal agency to regulate and supervise the financial activities of our housing-related government sponsored enterprises" and set prudent and appropriate minimum capital adequacy requirements.
• September: Then-House Financial Services Committee Ranking Member Barney Frank (D-MA) strongly disagrees with the Administration's assessment, saying "these two entities – Fannie Mae and Freddie Mac – are not facing any kind of financial crisis … The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing." (Stephen Labaton, "New Agency Proposed To Oversee Freddie Mac And Fannie Mae," The New York Times, 9/11/03)
• October: Senator Thomas Carper (D-DE) refuses to acknowledge any necessity for GSE reforms, saying "if it ain't broke, don't fix it." (Sen. Carper, Hearing of Senate Committee on Banking, Housing, and Urban Affairs, 10/16/03)
• November: Then-Council of the Economic Advisers (CEA) Chairman Greg Mankiw explains that any "legislation to reform GSE regulation should empower the new regulator with sufficient strength and credibility to reduce systemic risk." To reduce the potential for systemic instability, the regulator would have "broad authority to set both risk-based and minimum capital standards" and "receivership powers necessary to wind down the affairs of a troubled GSE." (N. Gregory Mankiw, Remarks At The Conference Of State Bank Supervisors State Banking Summit And Leadership, 11/6/03)

2004

• February: The President's FY05 Budget again highlights the risk posed by the explosive growth of the GSEs and their low levels of required capital and calls for creation of a new, world-class regulator: "The Administration has determined that the safety and soundness regulators of the housing GSEs lack sufficient power and stature to meet their responsibilities, and therefore … should be replaced with a new strengthened regulator." (2005 Budget Analytic Perspectives, pg. 83)
• February: Then-CEA Chairman Mankiw cautions Congress to "not take [the financial market's] strength for granted." Again, the call from the Administration was to reduce this risk by "ensuring that the housing GSEs are overseen by an effective regulator." (N. Gregory Mankiw, Op-Ed, "Keeping Fannie And Freddie's House In Order," Financial Times, 2/24/04)
• April: Rep. Frank ignores the warnings, accusing the Administration of creating an "artificial issue." At a speech to the Mortgage Bankers Association conference, Rep. Frank said "people tend to pay their mortgages. I don't think we are in any remote danger here. This focus on receivership, I think, is intended to create fears that aren't there." ("Frank: GSE Failure A Phony Issue," American Banker, 4/21/04)
• June: Then-Treasury Deputy Secretary Samuel Bodman spotlights the risk posed by the GSEs and calls for reform, saying "We do not have a world-class system of supervision of the housing government sponsored enterprises (GSEs), even though the importance of the housing financial system that the GSEs serve demands the best in supervision to ensure the long-term vitality of that system. Therefore, the Administration has called for a new, first class, regulatory supervisor for the three housing GSEs: Fannie Mae, Freddie Mac, and the Federal Home Loan Banking System." (Samuel Bodman, House Financial Services Subcommittee on Oversight and Investigations Testimony, 6/16/04)

2005

• April: Then-Secretary Snow repeats his call for GSE reform, saying "Events that have transpired since I testified before this Committee in 2003 reinforce concerns over the systemic risks posed by the GSEs and further highlight the need for real GSE reform to ensure that our housing finance system remains a strong and vibrant source of funding for expanding homeownership opportunities in America … Half-measures will only exacerbate the risks to our financial system." (Secretary John W. Snow, "Testimony Before The U.S. House Financial Services Committee," 4/13/05)
• July: Then-Minority Leader Harry Reid rejects legislation reforming GSEs, "while I favor improving oversight by our federal housing regulators to ensure safety and soundness, we cannot pass legislation that could limit Americans from owning homes and potentially harm our economy in the process." ("Dems Rip New Fannie Mae Regulatory Measure," United Press International, 7/28/05)

2007

• August: President Bush emphatically calls on Congress to pass a reform package for Fannie Mae and Freddie Mac, saying "first things first when it comes to those two institutions. Congress needs to get them reformed, get them streamlined, get them focused, and then I will consider other options." (President George W. Bush, Press Conference, the White House, 8/9/07)
• August: Senate Committee on Banking, Housing and Urban Affairs Chairman Christopher Dodd ignores the President's warnings and calls on him to "immediately reconsider his ill-advised" position. (Eric Dash, "Fannie Mae's Offer To Help Ease Credit Squeeze Is Rejected, As Critics Complain Of Opportunism," The New York Times, 8/11/07)
• December: President Bush again warns Congress of the need to pass legislation reforming GSEs, saying "These institutions provide liquidity in the mortgage market that benefits millions of homeowners, and it is vital they operate safely and operate soundly. So I've called on Congress to pass legislation that strengthens independent regulation of the GSEs – and ensures they focus on their important housing mission. The GSE reform bill passed by the House earlier this year is a good start. But the Senate has not acted. And the United States Senate needs to pass this legislation soon." (President George W. Bush, Discusses Housing, the White House, 12/6/07)

2008

• February: Assistant Treasury Secretary David Nason reiterates the urgency of reforms, saying "A new regulatory structure for the housing GSEs is essential if these entities are to continue to perform their public mission successfully." (David Nason, Testimony On Reforming GSE Regulation, Senate Committee On Banking, Housing And Urban Affairs, 2/7/08)
• March: President Bush calls on Congress to take action and "move forward with reforms on Fannie Mae and Freddie Mac. They need to continue to modernize the FHA, as well as allow State housing agencies to issue tax-free bonds to homeowners to refinance their mortgages." (President George W. Bush, Remarks To The Economic Club Of New York, New York, NY, 3/14/08)
• April: President Bush urges Congress to pass the much needed legislation and "modernize Fannie Mae and Freddie Mac. [There are] constructive things Congress can do that will encourage the housing market to correct quickly by … helping people stay in their homes." (President George W. Bush, Meeting With Cabinet, the White House, 4/14/08)
• May: President Bush issues several pleas to Congress to pass legislation reforming Fannie Mae and Freddie Mac before the situation deteriorates further.
  • "Americans are concerned about making their mortgage payments and keeping their homes. Yet Congress has failed to pass legislation I have repeatedly requested to modernize the Federal Housing Administration that will help more families stay in their homes, reform Fannie Mae and Freddie Mac to ensure they focus on their housing mission, and allow state housing agencies to issue tax-free bonds to refinance sub-prime loans." (President George W. Bush, Radio Address, 5/3/08)
  • "[T]he government ought to be helping creditworthy people stay in their homes. And one way we can do that – and Congress is making progress on this – is the reform of Fannie Mae and Freddie Mac. That reform will come with a strong, independent regulator." (President George W. Bush, Meeting With The Secretary Of The Treasury, the White House, 5/19/08)
  • "Congress needs to pass legislation to modernize the Federal Housing Administration, reform Fannie Mae and Freddie Mac to ensure they focus on their housing mission, and allow State housing agencies to issue tax-free bonds to refinance subprime loans." (President George W. Bush, Radio Address, 5/31/08)
• June: As foreclosure rates continued to rise in the first quarter, the President once again asks Congress to take the necessary measures to address this challenge, saying "we need to pass legislation to reform Fannie Mae and Freddie Mac." (President George W. Bush, Remarks At Swearing In Ceremony For Secretary Of Housing And Urban Development, Washington, D.C., 6/6/08)
• July: Congress heeds the President's call for action and passes reform legislation for Fannie Mae and Freddie Mac as it becomes clear that the institutions are failing.
• September: Democrats in Congress forget their previous objections to GSE reforms, as Senator Dodd questions "why weren't we doing more, why did we wait almost a year before there were any significant steps taken to try to deal with this problem? … I have a lot of questions about where was the administration over the last eight years." (Dawn Kopecki, "Fannie Mae, Freddie 'House Of Cards' Prompts Takeover," Bloomberg, 9/9/08)

And then theres this:
http://www.investors.com/NewsAndAnalysis/Article.aspx?id=514409&p=2

How Congress Ignored Warnings And Stiff-Armed Reform Of GSEs

Rep. Barney Frank, in response to warnings about growing riskiness in housing markets, said in 2003: "Fannie Mae and Freddie Mac have played a very useful role in helping make housing more affordable." Critics "exaggerate a threat of safety" and "conjure up the possibility of serious financial losses to the Treasury, which I do not see."

As for government pressures on Fannie and Freddie to loosen their mortgage lending standards, Frank said: "I believe that we, as the federal government, have probably done too little rather than too much to push them to meet the goals of affordable housing and to set reasonable goals."
He said, "I would like to get Fannie and Freddie more deeply into helping low-income housing and possibly moving into something that is more explicitly a subsidy." He added: "I want to roll the dice a little bit more in this situation towards subsidized housing."

Such statements were not just some popping off by an isolated politician. Barney Frank was in 2003 the ranking member of the House Committee on Financial Services and would later become chairman of that powerful committee in 2006. He was a very influential force in the housing market.

Frank was by no means the only member of Congress to dismiss warnings and assert that Fannie Mae and Freddie Mac were safe and sound institutions. His counterpart in the Senate, Chairman Christopher Dodd of the Senate Banking Committee, was equally adamant on the subject and continued to be so equally long — well into 2008, long after the financial system had already gone into a historic collapse.
Back in 2004, when Fannie Mae and Freddie Mac were under criticism, Sen. Dodd called them "one of the great success stories of all time" and urged "caution" in restricting their activities, out of fear of "doing great damage to what has been one of the great engines of economic success in the last 30 or 40 years."

After accounting errors totaling $11 billion were discovered in the books of Fannie Mae and Freddie Mac, President Bush in 2007 said that these government-sponsored enterprises should complete "a robust reform package" before being allowed to expand their mortgage portfolios. Sen. Dodd said that President Bush should "immediately reconsider his ill-advised" position.
As late as July 2008, after the housing market had collapsed, Sen. Dodd continued to defend Fannie Mae and Freddie Mac as being "on a sound footing."

Rep. Maxine Waters said in 2003, "We do not have a crisis at Freddie Mac, and in particular at Fannie Mae, under the outstanding leadership of Mr. Frank Raines." (This was the same Franklin Raines who would later resign after the accounting scandals at Fannie Mae came to light.)