Fannie/Freddie - The Largest Fraud Story In History
By Mr Mortgage on September 8, 2008 | More Posts By Mr Mortgage | Author's WebsiteI don’t have time to write this up right now but I urge all of you to read this. Every word. Right now. This entire Fannie Mae (FNM) and Freddie Mac (FRE) story is not what it seems. It not a ‘bailout’ by the Gov’t trying to be proactive and get ahead of a failure. These are already the largest corporate failures in history due to outright fraud. These two companies and out of touch regulators have put every US tax payer and perhaps the US credit rating itelf in jeopardy. Deloitte and Morgan Stanley (MS) busted them. The criminality is something for a feature film.
I will entice you by leading in with ‘Fannie Mae did not count a loan ‘delinquent until the borrower was TWO YEARS LATE.’ Most banks consider a borrower delinquent after 90-days. We also learned that Fannie guarantees $400 billion and Freddie $800 billion in Alt-A and Subprime. Everyone thought they had $700 billion in total. That’s almost 20% of all their holdings. Given how poorly private labeled Alt-A and Subprime are performing and how the GSEs hid defaults and foreclosures, the losses must be multi-hundred billion dollar staggering.
This is the largest fraud story in the world’s history. This makes ENRON look like a shoplifting. When you are done reading, think again about the $5.2 trillion in retroactive MBS guarantees that they are thinking about putting on the tax payer and how much of that really may be bad paper.
Fannie lied and cheated for years. Several years ago they kicked out the old CEO’s and the new ones appear to be even more crooked.
Hat-tip Gretchen Morganson.
The article can be found here.
Posted in Categories: Contributor, Economy, External Research, Housing, USA.
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For years, they lobbied for more benefits. Gimme gimme more! It made me mad; and why should the hardworking people’s tax money be used to bail those losers who bought mansions that they couldn’t afford to pay? The government meant to “help them to be able to pay their mortgage.” Grrr….