The Fannie and Freddie political football

For reasons known only to me, I have been following the attacks launched by the Democrats against Edward DeMarco. In 2008 he was appointed to head the newly created Federal Housing Finance Agency.

His job was to conserve the assets of Fannie Mae and Freddie Mac to the extent he could while the housing bubble deflated to manageable.  After some $2 trillion in extra government spending in early 2009, on the Stimulus Bill and the “Porkapaloza” Spending Bill (all of the spending President Bush vetoed while he was in office), the housing market is the same, if not worse .  And, therein lies the problem.

We told you last week about the Fed (which of course has nothing to do with the housing market), sending a”‘white paper” to Congress suggesting that Mr. DeMarco should stop trying to do his job of conserving Fannie’s and Freddie’s assets, and, instead, start “relaxing” loan standards, and perhaps even forgiving loan principal on Fannie’s and Freddie’s loans.  As this would violate what Mr. DeMarco believes is his job, so far, he has refused.

Enter 28 House Democrats…stage left.

On Tuesday, they sent a letter to the President claiming that Mr. DeMarco has interpreted his job “far to narrowly” and “failed to take adequate action to help homeowners”.  This is, of course, secret code for “forget saving the taxpayer’s money, this is an election year, and, we need votes”.  And, what better way to get votes than to tell someone that they no longer owe $100,000 on their home, they only owe  $50,000.  The taxpayers will make up the rest of what you agreed to pay.

The plan here is to remove Mr. DeMarco, who is doing his job, and replace him with someone will ignore the  job description, and forgive principal on Fannie’s and Freddie’s loans.  Taxpayers will ultimately have to pay for this largesse, but, this is an election year and, every vote counts.

Never happen?  Think again.

This is a President who apparently believes he can appoint someone to office when the Senate is having a bathroom break.

Pull harder taxpayers.

 

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SoundOffSister

The Sound Off Sister was an Assistant United States Attorney for the Southern District of Florida, and special trial attorney for the Department of Justice, Criminal Division; a partner in the Florida law firm of Shutts & Bowen, and an adjunct professor at the University of Miami, School of Law. The Sound Off Sister offers frequent commentary concerning legislation making its way through Congress, including the health reform legislation passed in early 2010.

25 Comments

  1. Dimsdale on January 13, 2012 at 10:01 pm

    Is any pledge or promise sacred to the Democrats?? For that matter, is any contract sacred to the Democrats?? I know the Republicans have their issues too, but the Dems aren’t even trying to hide their scurrilous behavior anymore.



    • ricbee on January 14, 2012 at 11:10 pm

      It is hidden by the media,only a few of us know the truth.



    • Murphy on January 16, 2012 at 12:07 pm

      No



    • crystal4 on January 16, 2012 at 12:55 pm

      Scurrilous”, yes. Imagine trying to turn the economy around???? Really devious!



    • Dimsdale on January 16, 2012 at 10:47 pm

      Apparently, there is no “try”; there is “do” or “not do” (thank you, Yoda) and the Democrats are not doing.? In fact, the economy has been tanking since they took over the Congress in 2007.
      ?
      I would never mistake gross incompetence for deviousness!



    • Murphy on January 17, 2012 at 9:00 am

      Would you be interested in some ocean front property in Utah? @ptbarnum



  2. JBS on January 14, 2012 at 7:12 am

    SOS, I appreciate your tenacity and instinct for a discovering the Dem’s sordid business-as-usual machinations.
    Just when I thought it couldn’t get any weirder, the Dems disappoint and underwhelm me anew. The Dems are so free with other peoples money. A billion here, a billion there . . .
    The Dems are pandering for votes, buying them, at what cost each? Their scheme sounds like subsidized housing. I hope the Republicans get out of the bathroom soon and raise a racket about this Dem plan.
    Do you think the MSM will listen and cover the Republican’s righteous indignation?? LOL!



    • crystal4 on January 16, 2012 at 4:52 pm

      Check the news! Fannie and Freddie? want more of your $$$! Do you want it to go to them or to the homeowners? The cost of court costs of foreclosure, maintainance of property, the sales at rock bottom prices, etc. eats the principle that was borrowed…reduce it in the first place to qualified people who can pay a lessor loan. Duh, it saves $$$, helps the homeowners, improves the economy AND stops the value of YOUR house from continuing to drop.



    • Dimsdale on January 16, 2012 at 10:55 pm

      It was F&F’s errant support of bad loans that caused the housing bubble and the subsequent burst.? Too many people buying houses they could not afford and should not have been allowed to buy.? Prices cycle and bubbles burst.? Recent history (late nineties) was evidence of that.? The “qualified people who can pay a lessor loan” should have been in that “lessor loan” in the first place, not “qualified” for houses they could not afford against all banking common sense and practice.



  3. ricbee on January 14, 2012 at 11:09 pm

    Fannie & Freddie? are the root of our economic woes & need to be allowed to fail.? Maybe Mr DeMarco can return a few misspent taxpayer dollars. I’m giving 3-1 that he caves.



  4. crystal4 on January 17, 2012 at 7:33 am

    Dimsdale, you’ve become so predictable..I know exactly what you are going to write.
    The Bad loans ( and there were many)? have long since become foreclosed on…for a couple of years, it has been difficult to get a mortgage unless you are golden.
    The people in trouble now are the ones who lost their jobs? and are working at jobs with lesser pay. These are good people who pay their bills. The process they are proposing is not for everyone…just the ones who qualify and have good credit history.? As I said, the principle is lost anyway in the foreclosure process. Why not bailout families rather than big banks?



    • Dimsdale on January 17, 2012 at 11:54 am

      If I am predictable, you must be learning something!? 😉
      ?
      The point of this post is that the Dems want F&F to return to making the bad loans again!!? You should not get a mortgage unless you are golden. ? If the “good people” want to halve their mortgages, they will be doing it with OUR money, not theirs.? I say “NO THANKS!!” because I already have a mortgage, on a house I can afford even on one income, and one I am retiring ASAP with extra principle payments when possible.? Nobody is offering to cut my mortgage (I am good people too, thank you very much), and I don’t want them to: I was taught that you honor a contract you sign (and have read).



    • crystal4 on January 18, 2012 at 6:25 am

      “I, I, I”? (Doesn’t affect me, screw em). Guess what? It does affect you by bringing the value of that house way down as the housing crisis continues (because the Reps don’t want it to recover, not before Nov. ..)



    • Dimsdale on January 18, 2012 at 8:29 am

      Ah, but it does affect me to a degree, but unlike your “good people”, I (again) chose not to overbuy my house.? The value doesn’t affect me (again), as I do not look at a house as an investment, but rather, a home.? All those Republicans you mention tried to stop this from happening (Bush and McCain in particular), but the Dems, in a rush to buy votes then, and as SOS notes, once again, are pushing the same garbage that tanked the market in the first place.



  5. sammy22 on January 17, 2012 at 12:14 pm

    I am still trying ti figure out what the President has to do with this. Congressmen are mentioned, but there has been no action by the President in this matter. To say in the post: “This is a President who apparently believes?he can appoint someone to office when the Senate is having a bathroom break.” is a cheap shot.



    • Dimsdale on January 17, 2012 at 12:34 pm

      If the president has no bearing on this, or his hand picked appointees make no difference, they why does he have to use this smarmy, unconstitutional, immoral and illegal method of sleazing him in?
      ?
      Bypassing the Constitution and the Congress like a South American dictator is the cheap shot.



  6. sammy22 on January 17, 2012 at 12:43 pm

    I read that Mr. DeMarco is the “good” guy. I also read that “recess appointments” have been a prerogative of Presidents for decades. The shots above continue to be “cheap”.



    • Dimsdale on January 17, 2012 at 10:19 pm

      Well, let’s see what happens, shall we?? If ?bama caves, then SOS is correct; if ?bama stands with DeMarco against the Dems, then you are right, and good for him (even if it is a political move).?? Of course, you still have lots of Dems looking to trash the system again.
      ?
      SOS is referring to ?’s unconstitutional move to make recess appointments even when the Senate is in pro forma session, a practice started by Dems to halt LEGAL recess appointments by Bush, which Bush honored by the way.
      ?
      Appoint as I say, but not as I do?



  7. Tim-in-Alabama on January 17, 2012 at 2:06 pm

    Stop finger pointing when Democrats are to blame!



  8. sammy22 on January 17, 2012 at 3:52 pm

    Who is finger pointing?



  9. stinkfoot on January 18, 2012 at 10:24 am

    This is a President who apparently believes?he can appoint someone to office when the Senate is having a bathroom break

    Perhaps the President should take a bathroom break because it’s fairly evident what he’s full of.



    • Dimsdale on January 18, 2012 at 11:51 am

      I recall that Al Gore has a recipe for brewing “tea that makes you go to the bathroom whenever something significant is happening” chai!? Usually served in Buddhist temples….



  10. sammy22 on January 18, 2012 at 4:03 pm

    SOS has her opinion on what constitutes a “legal” recess appointment. Other legal eagles have a different opinion and Congress does not seem to have taken any action on the appointments. SOS likes to toss “bombs” over the wall and see what happens.



    • Dimsdale on January 18, 2012 at 7:10 pm

      Apparently, the Democrats had a definition of a “legal” recess appointment too, when it benefited them (and Bush honored).? Now that has changed.
      ?
      Those bombs aren’t coming from SOS….



  11. Lynn on January 19, 2012 at 12:22 pm

    I can’t believe anyone can call SOS posts tossing bombs, nor that anyone can justify Freddie Mac or Fannie Mae or the Community Reinvestment Act.? I can’t believe anyone would not want to support Mr. DeMarco. ? Stop the Insanity!



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