Government corruption is killing this country

The truth behind the financial crisis

The mess we’re in is because the markets are flooded with bad mortgages. People get a home loan, or mortgage, to buy a house. The bank lends money, with the house as collateral, which is to be paid back over time with interest. This is considered an “asset” to the bank: a mortgage asset.

Mortgage assets can be sold to other banks and to investment banks. Investment banks can turn groups of mortgage assets into securities called Mortgage Backed Securities, or MBS. Groups of these MBS can be turned into Collateralized Mortgage Obligations, or CMO. CMOs are put into risk categories and put into Tranches. Something called Credit Default Swaps can be bought, which are like insurance on credit backed assets in case they fail.

In 1977 Jimmy Carter passed the Community Reinvestment Act, or CRA. CRA loans are risky loans. Banks were compelled to make loans they normally wouldn’t, violating free market principles. The leftist organization ACORN began to harrass banks, threatening lawsuits under CRA and even harrass bankers at their homes to make them issue more and more bad loans, sub-prime mortgages. (This is the same ACORN that Barack Obama worked with, and had voter registration fraud charges nationwide.) The free market was unnaturally influenced.

Fannie May and Freddie Mac buy mortgages. They were directed to buy more and more sub-prime mortgages, under the arguably noble idea of helping minorities and poor people get into houses.

Fannie May paid big contributions to politicians who should have regulated them: the biggest recipient was Democrat Chris Dodd, who received contributions totaling $165,000. (How is anything in our government going to ever run right with the amount of corruption and out right theft of the American peoples money by these Democratic crooks. They sit in oversight over these organizations yet they all feel they should be above the law when it comes to oversight of them. They direct the American taxpayers monies to causes that profit them and their cronies and backers. Yet none of them are ever prosecuted for the crimes they commit while in their roles in Congress funneling our money to these sources. The ironic part is that Chris Dodd and Barney Frank submitted their bill to fix this corruption they put into place to begin with. Their bill which was crafted by many radical left individuals and organizations that are ruining our country. The main sources of this bill came from supposedly non-profit 301C3′s like The Center for American Progress – a George Soros backed leftist socialistic organization that is better suited for the over throw of the American government. That is what needs to be fixed in this country the above the law politicians that stop anything that is put into place to stop them from stealing and directing all the Americans taxpayers monies to these leftist anti-American organizations.  )
In 2005, Senator Christopher Dodd, and all the Democrats on the Banking Committee blocked legislation to regulate Fannie and Freddie.

Senate Republicans introduced a bill in 2006 to regulate these GSA’s – Freddie Mac and Fannie Mae, but Democrats voted against. (Why do yout hink they would do that if they had nothing to hide and this cash cow wasn’t making them a fortune. Not to mention the incredible election war chests these politicians have amasses with the American taxpayers money.)

The second biggest recipient of contributions from Fannie was Barack Obama, who received $126,000. (Like this should be a big surprise to anyone. Well let me take that back to anyone besides those leftist socialist, talking heads at MSNBC or any of the worshippers at the Obama is a messiah alter that helped wisk him into office in 2008 and prop up his Socialistic agenda once he got into office.)

Republicans have also received contributions, Robert Bennett received $108,000 and John McCain received $21,550 but by far the democratic party have used these GSA’s as their own political wear chests without doubt. That is the reason why they would never vote to fix them in any way. That means we would have to have other oversight review the policies over these major political donors for the democrats.

In 2006, John McCain co-sponsored a bill to address the problem and gave a warning. In a party line vote all the democrats voted against the bill. (Well lets see 1977 started by Jimmy Carter and always voted down by Democrats ever since. 2003, 2005, 2006 bills raised by the Republicans to try and correct and reign in this albatross of corruption and flowing wound of the American economy and debt. But again no go for Democrats because as you always hear them say they are looking out for the American people and the American worker, Bullshit!)

In 2004, Democrat Franklin Raines steps down as CEO of Fannie May for bad accounting practices. Franklin Raines was appointed by Bill Clinton. Fannie May had been cooking the books. Raines walked away with $90 million. (Corruption at it finest under Ole Slick Willy)

Freddie Mac and Fannie May buying up sub-prime mortgages increased the demand for them, causing banks to make even more. Fannie and Freddie are GSEs, Government Sponsored Enterprises, which gave the impression that the mortgages were safe. This, and the political pressure to make bad loans caused the financial markets to be flooded with bad mortgages.

A housing boom caused housing prices to increase. The Affordable Care Act put it in place under Jimmy Carter and the Democrats have been spurring it on ever since. This is what caused the housing bubble. Then the bubble popped and house prices went down. Some people had taken mortgages thinking that if they couldn’t afford to pay it, they would just sell the house and pay off the mortgage, keeping the profit. But house values went down. In many cases the value of the house was less than the mortgage, so why pay it? And of course many people had taken mortgages they couldn’t afford. People started defaulting on their mortgages, with the house being foreclosed upon. Often the value of the house is less than the money lent out.

Now many banks and financial institutions have mortage assets on their balance sheets. And now some of these assets are worthless, and the value of the others cannot be determined. (So what do the Democratic politicians start doing them blaming George W Bush so they will look like the ones coming in to save everything when they know good and well they were the ones who caused it and had been bleeding it dry for so many years already.)

The toxic waste is the bad mortgage assets. Assets are required to lend. Banks and financial institutions need to get these assets off their balance sheets – but no one wants them. The April, 2001, Bush Administration budget request identified GSE’s like Fannie May as a potential problem. On February 2, 2002, The Wall Street Journal editorial page warned about it. On September 10, 2003, John Snow warned about GSEs like Fannie May. Barney Frank, on the Financial Services Committee, said that everything was OK.

Some are raising questions about Frank’s relationship with Herb Moses, who was Fannie’s assistant director for product initiatives. Moses worked at the government-sponsored enterprise from 1991 to 1998, while Frank was on the House Banking Committee, which had jurisdiction over Fannie.

Lawmaker Accused of Fannie Mae Conflict of Interest
Frank met Moses in 1987, the same year he became the first openly gay member of Congress. The two lived together in a Washington home until they broke up in 1998, a few months after Moses ended his seven-year tenure at Fannie Mae, where he was the assistant director of product initiatives. According to National Mortgage News, Moses “helped develop many of Fannie Mae’s affordable housing and home improvement lending programs.” Critics say such programs led to the mortgage meltdown.

Who is Herb Moses?
Media Mum on Barney Frank’s Fannie Mae Love Connection

In 2004, Clinton appointee Franklin Raines steps down as CEO of Fannie May for cooking the books.

On February 24, 2004, Alan Greenspan spoke and gave a warning about problems with Fannie May.

On April 7, 2005, Democrat Chuck Schumer says everything is OK.

In 2005, Chris Dodd and all the Democrats on the Banking Committee block legislation to regulate Fannie and Freddie. In 2008, Bear Stearns failed.

The government bought $29 million of mortgage assets and J.P. Morgan bought Bear Stearns.

In July, 2008, Barney Frank said that Fannie May had problems, but would be OK going forward. They just kept on saying everything OK even up until July 2008. Does no one else think this seems a little fishy considering that even when thing were caving in around them they still were lying about the solvency of these cash cow GSE’s. In fact, in the Dodd-Frank bill which was supposed to fix all this mess (yeah right) again did nothing to either one of these 2 organizations.

On July 11, 2008, IndyMac bank fails.

On September 7, 2008, Fannie May and Freddie Mac are bailed out at a max taxpayer cost of $200 billion.

A week later Merril Lynch is bought by Bank Of America, and Lehman Brothers goes bankrupt.

On September 16, 2008, the Federal Reserve Bank saves AIG at a cost of $85 billion. On October 8 they get $37 billion more.

On September 17, 2008, Morgan Stanley and Goldman Sachs stocks plummet.

On September 21, Treasury Secretary Henry Paulson introduces his bailout plan, $700 billion to give the treasury power to buy bad mortgages.

Congress works on a bill, and before voting on the first bailout bill which does not pass, House Speaker Nancy Pelosi stands up and tries to blame the financial crisis on George W. Bush. This is truly Unbelievable.

Countrywide Loan Scandal
Countrywide’s Many ‘Friends’
Senators tied to special ‘VIP’ mortgage deals

Countrywide Friends Got Good Loans

Senators Christopher Dodd, Democrat from Connecticut and chairman of the Banking Committee, and Kent Conrad, Democrat from North Dakota, chairman of the Budget Committee and a member of the Finance Committee, received loans from Countrywide Financial through a little-known program that waived points, lender fees, and company borrowing rules for prominent people.

Chris Dodd, Chairman of the Senate Banking Committee which regulates mortgage lending, received preferential treatment from Countrywide CEO Angelo Mozilo in obtaining mortgage loans. He participated in a special program for “friends” of Mozilo that awarded discounts and waived fees for those friends.

Fannie Mae’s former CEO, James Johnson, who had been advising presidential candidate Barack Obama on the selection of a running mate, resigned from the Obama campaign after the Wall Street Journal reported that he received Countrywide loans at below-market rates.

Mr. Johnson led Fannie Mae from 1991 to 1998. He and Countrywide’s Mr. Mozilo worked together to streamline the underwriting process.

Another former CEO, Franklin Raines, received low-rate home loans from Countrywide, a large originator of higher-risk subprimes mortgages and a major seller of home loans to Fannie Mae.

Mr. Raines, who succeeded Mr. Johnson at Fannie’s helm at the end of 1998, became a repeat customer of Countrywide while he was CEO.

Franklin Raines, a onetime Clinton administration budget director, left Fannie Mae amid an accounting scandal in 2004. Mr. Raines, was forced to retire from Fannie Mae in 2004 when its regulator found it had violated accounting rules in an effort to conceal fluctuations in profit and hadn’t maintained adequate risk controls.

Mr. Raines’s successor as Fannie Mae CEO, Daniel H. Mudd, received two mortgage loans for about $3 million each in 2001 and 2003 while he was a Fannie Mae officer.

THE REAL SCANDAL

HOW FEDS INVITED THE MORTGAGE MESS

US Fed announces $800bn stimulus
Global stock markets in 2008