And You Thought the Housing Crisis Was Over!

The American Spectator

Do you remember that thing about how the banks wouldn’t lend to blacks and Hispanics because they were racists? And do you remember how they passed the Community Reinvestment Act so that banks were forced to reduce down payments practically to zero and lend to a lot of people they knew were bad credit risks? And do you remember how Wall Street bundled all these risky subprime mortgages and sold them to investors around the world so that when it became clear that those people weren’t going to be able to pay their mortgages banks everywhere were left holding the bag and all five of the Wall Street investment houses either went under or had to be bailed out by the federal government?

And do you remember how, when it was all over, liberals said it was actually the banks’ fault for “deceiving” all those people into thinking they could afford to buy homes and that the banks should be punished for it and some of those people be allowed to keep their homes anyway? And do you remember how all this cost the government close to a trillion dollars and put the whole economy in a hole that we really haven’t begun to dig ourselves out of yet?

Well, get ready because the whole thing is about to happen again.

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Barney’s Boyfriends

Human Events

What is it about the bad boy that is so alluring yet so destructive to their burnt paramours?

More so than Sandra Bullock or Denise Richards, a certain sixteen-term congressman from Massachusetts might be able to provide enlightenment here.

We learned last week that Representative Barney Frank had lobbied executives at Fannie Mae in the early 1990s to give his companion Herb Moses a job. The belated revelation comes from “Reckless Endangerment,” a new book about the financial-industry meltdown by New York Times reporters Gretchen Morgensen and Joshua Rosner. The year Mr. Frank and Mr. Moses broke up, Mr. Moses and Ms. Mae also broke up.

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Former Clinton Official Paid $26 Million by Fannie Mae Before Taxpayer Bailout Now on Obama Shortlist to Run FBI

(CNSNews.com) – Jamie Gorelick, a former Clinton administration official who reportedly has made the Obama administration’s short list to become the next director of the Federal Bureau of Investigation (FBI), was paid more than $26 million in total compensation as a top executive at Fannie Mae–before taxpayers had to bail out the mortgage giant.

Gorelick, who left the Clinton Justice Department in 1997 to work for Fannie Mae CEO Franklin Raines, was paid $26,466,834 in salary, bonuses, performance pay and stock options from 1998 to 2003, according to the Report of the Special Examination of Fannie Mae (2006), conducted by the Office of Federal Housing Enterprise Oversight.

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Chicago on the Potomac

Townhall

by: Michelle Malkin

 

No matter how you rearrange President Obama’s inner circle, it still looks, smells and tastes like a rotten Chicago deep-dish pizza.

Ready for the latest topping on this moldy old pie? It’s a possible chief of staff slot for Wall Street banker/lawyer/wheeler-dealer William Daley, brother of outgoing Chicago mayor/machine politics mastermind Richard M. Daley (also the former boss of White House senior adviser Valerie Jarrett and first lady Michelle Obama), whose retirement paved the way for former Obama chief of staff and Chicago mayoral candidate Rahm Emanuel. Phew.

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Odd Couple Demands Probe of Rahm Emanuel at Freddie as More Money Rolls In

Dec. 25, 2009

Fox News

WASHINGTON — Two strange bedfellows have asked Attorney General Eric Holder to investigate President Obama’s right-hand man, chief of staff Rahm Emanuel, for his potential role in the near collapse of mortgage giants Fannie Mae and Freddie Mac.

The letter by Jane Hamsher, founder of the liberal Firedoglake Web site, and Grover Norquist, Americans for Tax Reform Chief, was sent Wednesday, one day before the Treasury Department announced that it will lift the $400 billion financial cap on loans to the government-sponsored enterprises to make sure they stay afloat.

It also arrived just before the Federal Housing Financial Authority announced Thursday that it would place salary caps on 11 of the companies’ top executives.

Hamsher and Norquist want to know now whether the bailout was in part the result of corrupt practices by Emanuel while he was a board member at Freddie in 2000-2001.

They cited a Chicago Tribune story that described a plan by the executives and the board to use accounting tricks to show shareholders they were reaping massive profits even as they continued down a path of risky investments. The profits were then used to justify the executives’ big bonuses. When Emanuel left the board to enter Congress in 2002, he was qualified for $380,000 in stock and options and $20,000 cash.

The two wrote they would like the Justice Department to “begin an investigation into the cause of Fannie and Freddie’s conservatorship, into Rahm Emanuel’s activities on the board of Freddie Mac (including any violations of his fiduciary duties to shareholders), into the decision-making behind the continued vacancy of Fannie and Freddie’s inspector general post, and into potential public corruption by Rahm Emanuel in connection with his time in Congress, in the White House, and on the board of Freddie Mac.”

Since the financial bailout began, Fannie and Freddie have received $111 billion in taxpayer loans. In August, the administration projected the cost for rescuing Fannie and Freddie would total $170 billion.

Treasury Department officials said the cap will be replaced with a flexible formula to ensure the companies can stand behind the billions of dollars in mortgage-backed securities they sell to investors.

“The amendments to these agreements announced today should leave no uncertainty about the Treasury’s commitment to support these firms as they continue to play a vital role in the housing market during the current crisis,” the department said in a statement.

FHFA issued its own ruling Thursday that the base salary for officers besides the CEO, CFO and COO cannot exceed $500,000 a year. That means five officers are exempt and 11 will now face a cap.

The capped executives will be allowed to get up to one-third of their salary in additional incentive bonuses. Any deferred cash salary — like stock salary received by private company executives who received bailouts — will be paid partly as a means to keep executive officers working at the GSEs.

FHFA acting chief Edward DeMarco said the compensation deal is to mimic the one set up by pay czar Kenneth Feinberg for private companies.

“The enterprises must attract and retain the talent needed to accomplish (their) objectives. We have worked with the enterprises’ boards and sought the guidance of the Special Master of TARP Executive Compensation, to develop competitive compensation packages that benefit from the structural standards created for the TARP-assisted firms,” DeMarco said.

Eight of the then-top 11 executives at Fannie Mae left the company just before the U.S. government stepped in with its bailout, as did the four highest paid executives at Freddie
Mac.

Treasury officials will provide an updated estimate for Fannie and Freddie losses when President Obama sends his 2011 budget to Congress in February. The formula Treasury will use will provide the institutions with a sufficient cushion based on the losses they may incur over the next three years.

In their letter to Holder, Hamsher and Norquist wrote that the White House has stonewalled any inquiries into Emanuel’s role on the board, noting that the acting inspector general was “stripped of his authority earlier this year by the Justice Department, relying on a loophole in a bill Mr. Emanuel cosponsored and pushed through Congress shortly before he left for the White House.”

The White House has not appointed a new inspector general to determine whether crimes were committed by the board to defraud investors, the two noted, and the statute of limitations for empaneling a grand jury is about to run out.

“Under the influence of Rahm Emanuel, the White House is moving a trillion-dollar slush fund into corruption-riddled companies with no oversight in place. This will allow Fannie and Freddie to continue to purchase more toxic assets from banks, acting as a back-door increase of the TARP without congressional approval,” Hamsher and Norquist wrote.

Asked about the letter on Thursday, White House spokesman Bill Burton did not address the allegations, saying, “I have the feeling that Rahm’s job is very safe.”