Posted by: Maysman | September 20, 2008

Alert… 2003…

2003 Yes… In Sept, 2003… The BUSH administration

recommended the most significant regulatory overhaul in the housing finance industry since the S&L crises a decade ago… New Agency Proposed to Oversee Freddie Mac and Fannie Mae – New York times – Sept 11, 2003

—-”These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ”The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”

—-Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government- sponsored companies that are the two largest players in the mortgage lending industry.

—-The new agency would have the authority, which now rests with Congress, to set one of the two capital- reserve requirements for the companies.  It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.

—-The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac — which together have issued more than $1.5 trillion in outstanding debt — is broken. A report by outside
investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates.

—-So, you ask… Why did this not happen… Plenty of blame to go around but read the next post if you wish to be informed… Follow me, people…

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