Posts tagged ‘Fannie Mae’

February 17, 2013

The DC Folly Trolley – 02/17/13

Marco, Marco, Wherefore Art Thou Going, Marco.

Sen. Marco Rubio’s SOTU response was frazzled with right wing excuses for the housing bubble and after that time-worn and lame claim that the gubmint made everybody do it, the speech reached its crescendo of unparalleled mediocrity.

RUBIO

Marco Rubio, all bright eyed and bushy tailed during his response to the SOTU address, found a clever way to plug bottled water on TV. Rumors persist that the Republican senator from Florida is seeking the presidency of the Bottled Water Association.

It left me thirsting for reason, rationality and, well, a little common sense. The response lacked all of the above and was meteoric in its vapidity. To Rubio’s good fortune, this close encounter with Republican mendacity bypassed Follyland with little notice other than a gulp and caused no permanent damage to the planet.

The senator, in so many words, said he believes firmly that the foreclosure crisis was precipitated by the Community Reinvestment Act passed in 1977 and inflamed by former government organizations Fannie Mae and Freddie Mac. The reference was to right wing mythology that government interference caused the housing crisis and the economic meltdown that began in 2007. In strict compliance with right wing myth, Rubio echoed conservative story-telling that deregulation and the ever precious “free market” ideology were not at fault.

In a report filed by UPW’s Marcy Popindick shortly after the speech, a spokesman reiterated the senator’s position on the foreclosure crisis.

He gave as an example of fraud perpetrated by borrowers, a $300,000 mortgage issued by First NationsPride Home Ownership Bank and Loan Company to a 10-year old boy who claimed to be self-employed operating a lemonade stand.

Executives at the bank claimed government legislation forced them to approve loans of this type and they admitted no wrongdoing.

The mortgage was eventually purchased as part of a bundle by Fannie for cash thus freeing up funds and forcing the bank to originate even more substandard loans.

The boy, in this case, had obviously lied about his age when he signed the loan documents and it was later discovered that he also overstated the income he earned from the lemonade stand he operated as a sole proprietorship.

The 10-year old claimed an income of 80 cents a day. However, that claim was later shown to be grossly inflated because the boy occasionally sold a cup of the pink variety to a banker who charged a nickel fee for the privilege of doing business with the bank  That fee had never been deducted from the income reported by the business on its financial statements.

The mortgage lender instituted foreclosure proceedings against the boy through a robo-signing collection agency. The lemonade stand was also seized by the lender since the boy had used his business as additional collateral against the $300,000 loan.

The spokesman said the boy should have realized he had no chance of ever repaying the amount he borrowed and should not have swindled the mortgage originator into approving the loan.

The originator, again according to the Rubio spokesman, bears no responsibility for issuing the loan since government legislation establishing CRA and Fannie and Freddie policies virtually force mortgage writers to approve such substandard loans.

In addition to the foreclosure action, the boy will be prosecuted to the fullest extent of the law in order to prevent an epidemic of moral hazard behavior and, depending on the outcome of the trial, he could face up to ten years in prison for defrauding a lender.

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Pizza Bagel.

Bagels and lox is a Follyland favorite. If it’s fresh, not frozen and thawed, it’s quite a treat.

Did you know there’s such a thing as an Italian bagel?

BAGEL

http://commons.wikimedia.org/wiki/File:Pizza_bagels_closeup.JPG

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An Italian bagel’s quite the thing
Garlic, provolone and sauce just fling
That’s my only helpful clue
The recipe is up to you
Invent your own bada boom, bada bing.

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Duct Tape Stocks Soar On News Of Revolutionary Use For The Sticky Stuff.

The North Carolina House Judiciary Committee introduced legislation making it a felony to expose “private parts” for the “purpose of arousing or gratifying sexual desire.” First offense, six months in the pokey.

It occurred to me that there are hundreds of thousands of North Carolina residents who could strip naked and not arouse the slightest sexual desire in anyone. There are laws on the books, though, prohibiting nudity of any kind and for that we should all give a vote of thanks.

However, the new legislation proposed by the committee, referred to as the “nipple law”, prohibits the exposure of female nipples including the areola for the purpose of enticing men or women.

Soooooo, when wearing suggestive garments that might incidentally expose a portion of the offending anatomy, NC GOP representative Tim Moore remarked, “You know what they say, duct tape fixes everything.”

NUDE

Reclining Nude With Duct Tape by Henri Matisse. Matisse painting of a reclining nude.

So ladies, strap ’em, tuck ’em and duct ’em.

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Bachmann Gets Committee Assignment.

Michelle Bachmann has been reappointed to the House Intelligence Committee. I know, I know, it’s laughable.

But did you know that the Intelligence Committee appointed her to the chairladyship of an ad hoc committee called SLIT, or Search to Locate Intelligence in the Tea Party.

So far, no luck.

 Related articles:
November 25, 2011

Poor Caused Meltdown???

Every flimflam needs a mark. For the subprime mortgage scam there were millions of suckers. You’ve heard of them, the ones that are born every minute.

You know the kind, the ill-informed poor people and the uninitiated who reside closer to the middle.

Right wing extremists – a term that now encompasses the vast majority of people who used to call themselves conservatives – blamed first Fannie Mae and Freddie Mac for the meltdown.

And why shouldn’t they blame Fannie and Freddie.. After all the government forced these institutions to back mortgages to poor people who they knew couldn’t repay them. Yes, the big money boys of Fannie and Freddie were threatened with torture if they didn’t obey. Some CEOs were even sent to Gitmo and waterboarded because they didn’t submit. And since nobody likes having toothpicks stuck under their fingernails, the CEOs finally surrendered and, even though they resisted furiously, they were compelled by government to accept hundreds of millions of dollars in salaries and bonuses.  Can you believe that!  

Actually I just made that stuff up.  But the rest is true.

So when that rubbish didn’t seem to stick, well, there was always the Community Reinvestment Act. Blaming the CRA was sheer balderdash, but hey, any port in a storm, right.

Unfortunately, that excuse didn’t gain traction either so let’s see, there’s gotta be something else we can dump this mess on, right, righties. Think hard now. Oh yeah, that’s right. Poor people. Let’s blame poor people.

So desperate were the righties to blame anyone or anything for the economic meltdown that they even blamed poor people. Anyone would do. Anything to avoid blaming their cocktail party buddies – those who are really at fault, the Wall Street jailbirds (also known as CEOs, bankers and mortgage originators).

So they blame Fannie and Freddie who never issued a mortgage, subprime or otherwise. Both of which, in case you didn’t know, were privately operated, profit making institutions whose CEOs scarfed up untold millions in salaries and bonuses.

Then there was the Community Reinvestment Act. Passed during the Carter administration, it sought to eliminate the racist bank practice of redlining. A common exercise, redlining drew boundaries around poorer neighborhoods, mostly populated by African Americans, and placed a lending stranglehold on there areas. It mattered little that someone who qualified for a loan was denied. They were routinely blackballed simply because they happened to live a a poor neighborhood.

Funny thing. Fannie, Freddie and the CMA worked beautifully for decades.

So the righties continues their search. They had to find some excuse to absolve their Wall Street buddies from committing the crime of the ages. (I refer to these Wall Street hoods who scammed the nation and most of the industrialized world as jailbirds not because they ever served even a nanosecond behind bars where they truly belong. But because they escaped jail time only due to the vast amounts of protection money they lavish upon Congress and the White House. And of course that scratch buys them legislation that not only keeps them out of jail. It gets them bailed out with taxpayer money. That “get out of jail card free” card serves both purposes and they carry it in their wallets for future use).

Here’s what really happened. Mortgage originators issued paper to anyone and everyone. Didn’t matter. All they wanted was to collect the fees and commissions. They then sold off the mortgages, which collectively, amounted to many millions of pieces of paper and trillions of dollars in borrowed money.

Now the mortgages that were sold were low interest, short term agreements known as Adjustable Rate Mortgages. Typically, rates and therefore payments balloon in a few years.

Not to worry though. And this is the beauty of the scam When the ARM matures, the mark returns to the issuer to refinance the mortgage. Same low ARM and payment. But this time the house has appreciated in value, as we know all property does, so the mark is now richer and the refi is a breeze. The issuer collects more fees and commissions and sells the junk once again to an investor.

The statement “here’s your check. Go pick out a house and call me in the morning” wasn’t too far from the reality.

The Wall Street jailbirds then packaged the mortgages into securitized bundles (secured by the houses the money bought), sold the bundles and called them Collateralized Debt Obligations.

American International Group

The huge insurance company must share the blame for the meltdown. Image via Wikipedia

However, the jailbirds, also known as investment bankers, went one step further. They insured all the junk mortgages they did not sell and called the insurance policies Credit Default Swaps. Goldman Sachs insured its CDOs with AIG, a huge CDS policy issuer.

AIG quickly went bankrupt when this bank created housing bubble burst and couldn’t payoff on the insurance policies it issued. Not to worry boys and girls. The government, courtesy of the taxpayer, shoveled some more cash, this time in AIG’s direction and soon the insurance company was able to make good on its debts and paid up what it owed Goldman Sachs (and many other companies). In effect the government rescued Goldman a second time from even greater losses.

The AIG default was partly due to inadequate reserves it was no longer required tokeep on hand because the deregulated market place allowed all rules to lapse.

Here’s some of the trash that the Wall Street jailbirds left behind for the taxpayer to clean up after. Gone are Lehman Brothers, Merrill Lynch, Bear Sterns, Washington Mutual, Countrywide Financial and a whole host of other less notables. And let’s not forget the toxic assets gobbled up by the trillions by the Federal Reserve Bank, the layoffs, the destroyed pensions, the unemployment crisis and the entire world deficit problem.

Oh, just one more thing, the huge executive bonuses the Wall Street jailbirds continue to pay themselves are nicely kept in tact.

Despite all of the evidence to the contrary, the righties still blame the victim for the crime.

http://goanimate.com/player/embed/03IWj3SNhdtg

November 1, 2011

The Folly Trolley

Mayor Bloomberg Blames Fannie and Freddie.

 

Mayor Bloomberg said today that Freddie Mac and Fannie Mae are to blame for the blizzards that occurred in NYC shortly after he fired several hundred sanitation workers. He said Congress forced Fannie and Freddie to take such actions.

This year, the mayor vowed, the city would be handing out snow shovels at fire and police stations. Check your local newspaper for times and locations.

The mayor is reported to have said: “So global warming came a little late last year. Couldn’t happen two years in a row. So I’ll fire some more sanitation workers.

Read the Article at HuffingtonPost

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Hello, Mayor Bloomberg. Are you there, Mayor? Come in Mayor Bloomberg.

Houston, we have a problem. Mayor Bloomberg is lost in space.

Again.

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Donald Trump is planning a new reality TV show called Three Ring Circus. He’s hiring an elephant and training it to be master of ceremonies. Anything to pay the bills, right Donald.

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A fellow who just let it slip

That he took a cold skinny dip

With a girl who was eager

But laughed at his meager

Sad little leaguer that fit on a microchip.

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No nation can survive half prosperous and half poor: Half in the upper classes who dine on good food and fine wine and the other half who wait the tables and clean up after.

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Herman Cain, such a pain

Viewed two women with disdain.

Much to his forlorn regret

They’ve come back with spear and net

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Advice to this big a king of pizza

When a woman you next a meetsa

Best say madam s’cuse mum

I’ll a keepa my hands where you can a sees ’em.

Somebody is running a background check on this guy and finding skeletons in the closet.

Read the Article at HuffingtonPost