Are They Minting Money In Washington, Or Just Plain Stealing It In Tennessee?

Reaping What You Sew...


Are you, like me, spending any time scratching your head or other body parts wondering about the "Mortgage Crisis" and the other pending "financial meltdowns" going on up there in NY and Washington DC?

For a simple bit of clarification of how we got to where we are I suggest that you check out this NY Times story which might as well be considered to be the nine year old preface to the current drama we're watching today...

Fannie Mae Eases Credit To Aid Mortgage Lending
By STEVEN A. HOLMES
Published: September 30, 1999

In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.

The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.

Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people [emphasis mine...VRR] and felt pressure from stock holders to maintain its phenomenal growth in profits.


Let me caution you that I have a slightly different take on this debacle, in as much as if you listen to the Nancy Pelosi and the Democrats et. al. they are screaming that they have nothing to do with the current situation..."it's all the Bush Administration's mismanagement of the economy."

I'll buy exactly none of that garbage because the Democrats did in fact apply pressure to get people with crappy employment history and poor credit into mortgages in the late 1990's, continuing even to today as reported in the Times story.

Let me be clear--the Democrats fingerprints are all over this crime scene, but the prints are smeared by the handling that the Republican dominated Congress of that time gave the issue as they bumbled and fumbled their way through the "bipartisan" "reaching across the isle in cooperation" process they exude repeatedly on the TV sound bites.

Further, to hear the conservative pundits like Sean Hannity tell it, it's all the blue collar/minority pandering Democrats fault...PERIOD...and that take on things falls quite short of the truth and reality.

Fanny Mae WANTED to be allowed to make the money associated with buying "sub-prime" loans and collecting the associated higher interest rates they earned, confident in the fact the the Federal By-God Government of the United States of 'Merica would step in and cushion the blow should things turn south as they have today.

And the mortgage originators--savings and loans and banks and such--also wanted in on the action and needed to have a place to park the loans they made after the deal was done and they needed a fresh supply of money to lend.

Where do the bankers get their money?

Fanny Mae and Freddy Mac...in the NY Times own words:

In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates -- anywhere from three to four percentage points higher than conventional loans.

It's clear to me after doing a little studying that going back to the repeal/modification of the Glass Act, again under Clinton in 1999, that this whole gang of scoundrel politicians, bankers, and corporate executives knew exactly what they were doing and worst of all, they knew that they were making huge amounts of money while at the same time relying on you and I--the American Taxpayers--to underwrite their risk should things go sour.

And go sour they did, and thus today I being told that I'm looking at handing over about $3,500 of MY MONEY this year (seven hundred billion divided by 200,000,000 taxpayers) to cover the cost of corporate compensation of assholes getting fired for doing a poor job and deadbeat fellow citizens that can't or won't pay for their homes.

What kills me is they're letting the people stay in their houses under "renegotiated terms" while I pony up the extra $3,500 in addition to the near $20,000 I'm paying for my own house, on time each and every month.

Welfare for the wealthy and unscrupulous, that's all this amounts to.

That, and yet another experiment in socialism gone bad at taxpayer expense.

Just wait until you hand over the health care system to these same elected idiots that can't help but screw up a two hundred year old banking system.

When your private parts swell up and start falling off or your eyeball pops out of it's socket and you're told that you can see a specialist sometime next year, don't come crying to me because I'm just gonna tell you...

I TOLD YOU SO