There was a big dog-and-pony show earlier today led by Tiny Tim Geithner, who announced bold new initiatives to crack down on mortgage scammers and shut down irresponsible lenders cooking the books.
Speaking of mortgage scammers who cooked the books, when will they shut down Fannie and Freddie and go after their enablers in Congress?
Oh, never mind.
Judicial Watch has a new trove of FOIA records on congressional complicity in the Fannie/Freddie racket:
Judicial Watch obtained the documents from the Federal Housing Finance Agency (FHFA) in response to a Freedom of Information Act (FOIA) request dated December 4, 2008. Judicial Watch requested records related to members of Congress activity regarding the policy of Fannie Mae and Freddie Mac to increase lending to individuals with poor credit risk, as well as correspondence and records about contacts between FHFA and Fannie and Freddie. Among the important documents:
*FHFA letter, dated March 26, 2007, from the director of the Office of Housing Enterprise Oversight (OHFEO), James B. Lockhart, to U.S. Senators Elizabeth Dole, Chuck Hagel, Mel Martinez and John Sununu: “This is a very serious issue. Freddie Mac’s inadequate systems and controls make it a significant supervisory concern. Furthermore, its lack of timely public disclosures deny market participants the essential financial information made available by all other publicly traded companies so that investors may make informed judgments.” The letter also mentions, “…Fannie Mae still has not filed financial statements for 2005 and 2006 and thus, they are not timely filers either.”
*FHFA letter, dated December 3, 2004, to Congressman Barney Frank: “On November 15, 2004 Fannie Mae filed a Form 12b-25 with the Securities and Exchange Commission (SEC). Fannie Mae indicated that its external auditors could not complete their reviews of its financial statements and noted the possibility of up to a $9 billion loss dating back to 2001. As a result, OHFEO has determined it will not provide a monthly capital classification at this time.”
*Letter dated June 16, 2006, from OHFEO Director Lockhart to Senator Chuck Hagel: “…In January 1999, Chairman and CEO Franklin Raines approved a recommendation made by the Chief Financial Officer (CFO) (Tom Howard) and the Controller (Leanne Spencer) to defer recognition of $200 million in amortization expense. This deferral, along with other accounting decisions made at that time relating to provisions for loan losses and the recognition of low-income housing tax credits, allowed management to meet the EPS threshold for maximum bonuses.”
Overall, these documents show that Congress was made aware of the massive problems at Fannie Mae and Freddie Mac over the last six years. Yet liberals, led by Congressman Barney Frank, repeatedly blocked attempts to rein in Fannie Mae and Freddie Mac.
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