Summer of Corruption: Countrywide + Fannie Mae = Subprime slime
We continue to discover how much wider and deeper the tentacles of the Countrywide Financial Corporation VIP program reached. As was widely reported last month, some 153 Fannie Mae employees reaped Countrywide VIP benefits. That’s in addition to the 30 VIP loans that went to other Senators and their employees besides corruptocrat Democrat Sen. Chris Dodd and North Dakota Democrat Sen. Kent Conrad.
Gretchen Morgenson at the NYT reports on an internal document shedding more light on the intimate, favor-trading relationship between Countrywide and Fannie Mae:
Outwardly, Fannie and Freddie wrapped themselves in the American flag and the dream of homeownership. But internally, they were relentless in their pursuit of profits from partners in the mortgage boom. One of their biggest and most steadfast collaborators was Countrywide, the subprime lending machine run by Angelo R. Mozilo.
Countrywide was the biggest supplier of loans to Fannie during the mania; in 2004, it sold 26 percent of the loans Fannie bought. Three years later, it was selling 28 percent. What Countrywide got out of the relationship was clear — a buyer for its dubious loans. Now the taxpayer is on the hook for those losses.
But what was in it for Fannie?
An internal Fannie document from 2004 obtained by The New York Times sheds light on this question. A “Customer Engagement Plan” for Countrywide, it shows how assiduously Fannie pursued Mr. Mozilo and 14 of his lieutenants to make sure the company continued to shovel loans its way.
Nine bullet points fall under the heading “Fannie Mae’s Top Strategic Business Objectives With Lender.” The first: “Deepen relationship at all levels throughout CHL and Fannie Mae to foster alignment and collaboration between our companies at every opportunity.” (CHL refers to Countrywide Home Loans.) No. 2: “Create barriers to exit partnership.” Next: “Disciplined Risk/Servicing Management” and “Achieve Fannie Mae Profitability Goals.”
(Later in 2004, by the way, the Securities and Exchange Commission found that Fannie had used improper accounting and ordered it to restate its earnings for the previous four years. Some $6.3 billion in profit was wiped out.)
The engagement plan also recommends ways that Fannie executives should mingle with Countrywide’s top management, because “fostering more direct senior level engagements with key influencers throughout their organization will be beneficial in ensuring strategic alignment and building organizational loyalty.”
As I’ve noted here before and spotlighted in Culture of Corruption, it’s all about the boodle.
House Oversight and Government Reform ranking member GOP Rep. Darrell Issa reacts:
Rep. Darrell Issa (R-CA), Ranking Member of the House Committee on Oversight and Government Reform: “Lost in the debate over how to best legislate the aftermath of the financial crisis has been the necessity to conduct an inward examination at the too-cozy relationship between government enterprises and private industry. The indisputable and disturbing reality is that as Fannie-Freddie executives were accepting Countrywide VIP loans, they were also developing a strategy to form a partnership with Countrywide with the goal of using that relationship to influence the mortgage industry and policymakers. For all the impact that the subprime meltdown had on laying the groundwork for a full-scale financial meltdown, the true nature of this strategic partnership should be exposed so we can measure the extent to which this too-cozy relationship had in fostering the conditions that led to the financial meltdown. We always knew that Countrywide’s VIP program was established to curry influence with policymakers, now we see that it was actually a two-way street with Fannie-Freddie trying to build favor with Countrywide – the outstanding question is who gave what to whom and why?”
Indeed. The Senator from Countrywide, Chris Dodd, will leave office with barely a slap on the wrist from his colleagues — but the boot mark of disgusted taxpayers on his back side is indelible.
It’s time for ballot-box accountability for the rest of the subprime slime gang.
The Summer of Corruption rolls on…
***
Flashback: The Fannie and Freddie debacle – An autopsy
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This country is in DEEP doo doo if someone does not step up to the plate and fix the Fannie/Freddie issue.
The spineless repubs MUST hold hearings on what happened if they control the house after Nov.
Don’t hold your breath.
I agree. The problem that caused our current financial meltdown is still being protected and advanced by this administration and congress.
Its odd that they claim to want to help America, while at the same time protecting the policies that caused this disaster. It seems their priorities are not the same as the American people, thus “no representation” seems to be the best description of this congress.
An orgy of epic proportions!
.
Nothing wrong there, Barney and Maxine said so
.
This is the first article to mention how F&F “sought” to implement ways to “lock” the partership:
This tells a completely different story than what the “political class” has been pushing at us (blame wall street).
Now we can see how those “evil banks” were less evil than the government’s hand in this financial mess.
When the stock market crashed, I remember how gleeful Barney Frank was. He couldn’t contain himself. He knew it was coming and it was his opportunity to stick it to the rest of us.
Oh, but it is Republicans who are type-cast as ‘in bed’ with big business.
Why do Republicans put up with these and other monikers?
And how does that really hurt him? He’s made millions on his crooked schemes and will not be held accountable in this life. Oh, but wait until the next when it will matter most.
Agree, Republican’s are weak in defense of anything it does. It let the Dems define Iraq (hardly reminding people that they VOTED for the war). It continues the 18 months of Obama narrative rather than the 42 months of Reid and Pelosi. It accepts that Bush caused the recession, even letting Obama get away with blaming the “10″ years of Bush policies (which I guess he continues). It has a hard time with Obama immigration policies since its own President had the same policies and it stood by saying nothing, so it starts talking about a constitutional amendment on anchor babies (a diversion from the real solution).
They say little about the activist federal judge over-ruling the vote of 7 million Californians and hardly mention Missouri’s vote against ObamaCare.
But maybe the tea party is more representative of Americans than the Republicans.
As a believer in reincarnation and karma, that will be a painful lesson that could go on for many lives.
Recently caught a few episodes of a TV channel devoted to the trials & tribulations of first time home buyers. What always amazes me is how little the buyer’s down payment can be. In one case, a $350,000 bid was accepted, & only needed $10,000 down to close the deal. This seems to be rather typical. Staggering that this sort of stupidity continues to happen. Who finances these potential diasasters? Didn’t anyone learn anything the first time around? Our Sun-Sentinal newspaper has an article about a glimmer of improvement in Florida home sales. Don’t know where it’s happening. A local 2/2 condo in a retirement village has dropped from the $70′s, & the current asking price is $25,000. Due to the drop in prices, my wife & I have considered moving up to a larger home, as we have always been fiscally conservative & are actually in a good place now. We don’t need anything more than what we have, but it does seem attractive. We decided against it for no other reason than we would be assuming a much greater tax burden, & the local taxing authorities in all the communities just cannot stop helping themselves to everyone’s money.
Look who have served together for years on the Board of Directors of The Chicago Council on Global Affairs
Take a look at the VIP treatment the Obamas got on their mortgage from Northern Trust…
CORRUPTION — Just keeps getting bigger … As the circle widens. But the problem is no one cares. Obowma is flushing the rule of law as fast as he can. Want to know where this leads, try Haiti for a lesson in Corruption. PBS actually had a good series report on this, it’s worth listening to. LINK!!!
Now we know why the founders warned about the federal government getting too big and powerful.
And we also understand why the 17th Amendment was such a disaster for America … Instead of New York’s Senate seat, it has become Sen Schumer’s seat among others. And now we have 100 little kings. Repeal the 17th Amendment.
Oh, If the GOP does regain the majority in the House, I’ll just bet they do have the spine to hold hearings, as they love to orate, especially on TV, where at least C-SPAN will cover, the LSM not so much.
Other than huff, puff, bluster and blow, no real consequences will come of it – Applying appropriate punishment is where we will likely find the GOP lacking a backbone.
You know, that house they bought with the help of Tony Rezko and Patty Blagojevich…
Those evil bankers FORCED these deadbeats into taking this money and buying these houses they knew they couldn’t pay for, so it’s all their fault. They were just poor innocent bystanders in this equation. And lest we think they were just too stupid to understand this scam, some were congresspeople, and YOU’RE RACIST if you think blacks and hispanics are too dumb to be treated like the rest of us, and need us to treat them as children with special conditions.
And as I’ve noted several times in the past few days, Fannie and Freddie announced last week (according to CNBC) that they will again be offering those very popular “no money down” mortgages.
How long before they re-introduce those “no income required” liar loans too? If anything has changed since the credit meltdown, it is that the causes of the problem have been institutionalized. The bank problems are much bigger today than they were when this all started.
The moral of the story – pay cash!
The gov manipulating the housing market by injecting ideas which caused the current crisis demonstrated how inept the gov is at running anything. Gov success comes from passing legislation but not having that legislation accomplishing anything positive or able to function adequately.
The gov fails to notice that home ownership is not for everyone. It is not for those who can’t afford them or choose not buy one even when the individual can afford it.
The banks were either conspiring with the gov or bullied by it so that these mortgages were given out. What would happen to housing and banks if the public then chose to purchase homes with cash? Banks would be out the interest payments and the homeowner would have the gov manipulated banks out of their mortgages. There would be a demand for smaller homes and that would lower property tax collection. The homeowner would not be deducting the interest payment from tax returns, but then the gov keeps threatening to get rid of those anyway.
We the people have the choice right now, until the gov mandates us to purchase more than health insurance. We have the power, we just need to choose wisely.
Leaving office does not then grant him immunity. If conservatives obtain a majority he might indeed have more to worry about than leaving office.
One can only imagine if this kind of thing surfaced if a Republican majority were in office and Dodd were a Republican.
He’d be in jail with Scooter Libby.
Dream on. As we are about to learn from the Rangel/Waters hearings, the GOP is every bit as dirty as the Dems and they had plenty to do with the mess. This is what happens when corruption “reaches across the aisle”. The GOP we are about to put back in power is the very one that we booted in 2006 and 2008 so gird your loins.
Since the message the GOP appears to be settling on is “Miss Bush yet?”, get ready for President Hillary in 2012. No one misses Bush but lots of people will respond favorably to a “Miss the prosperity of the Clinton years yet?” message if that the GOP is that stupid. They aren’t called “the stupid party” for nothing.
There should be lots of publicity to the folks like Rahm Emanuel, Jamie Gorelik and countless other prominent Democrats who made millions from FANNIE and FREDDIE for doing nothing. They had no job assignment and were asleep at the wheel when FAMNIEMAE and FREDDIE MAC bought billions of garbage Countrywide loans. The MSM will not investigate how FANNIE and FREDDIE also bought up garbage New Century loans and Gorelik and Emanuel and Raines approved all of it.
Pasadena Phil,
I was thinking of you a few minutes ago when I sent the following email pertaining, in part, to Chris Dodd, one of the primary Fannie/Freddie evil-doers:
I heard Mitch McConnell over the weekend refuting the claim that the Senate is not collegial. He said something very close to “My two best friends…” or “two of my best friends…are Harry Reid and Chris Dodd.”
I spend a lot of time in a conservative forum head-butting a nitwit who sees the destruction of the existing Republican Party as the first order of business. Today, I feel like posting an apology to him and then slitting my wrists.
This is why some people feel we must throw all the bums out from both parties. You can’t investigate if you are involved and they are ALL involved in some way or another. Power corrupts.
It is amazing to me to see how hard some people work to earn a buck and then watch these lazy public servants making millions. You will absolutely puke watching Stark at that town hall meeting.
The sooner everyone understands that it’s not “Democrats against half of us and Republicans against the other half,” but politicians against all of us, the better. The two parties are virtually indistinguishable and the only way to limit the damage they can do is to shrink government as much as humanly possible.
So… I’m not a nitwit anymore?
My message is exactly the same as the Tea Party message. Before we can attack the Democrats, we first need fix the GOP. It isn’t happening. The GOP seems to be working for Hillary Clinton these days.
If a few hogs have hog cholera, the entire bunch of hogs must be euthanized.
If a few cows come down with mad cow disease, the whole herd has to be put down.
In congress we have only a few good animals and the majority is infected.
What should be done?
Let’s not push it, PP. {grin}
Uh, send Phil to Washington with whatever hardware he requires and a final note saying “let God sort’em out?”