Fannie Mae and Freddie Mac..Government Takeover

The news and headlines are buzzing with the announcement that the Federal Government took over Fannie Mae and Freddie Mac both of which had been touted as safe, secure lenders while sub prime lenders and mortgage brokers were made the villian and executions quickly began.


No mention is made of the lack of and stalled reporting by these two publically traded companies. No mention is ever made of the fact that they both manipulated and falsified their books and little mention is ever made of the millions of dollars of salraies paid to their chief executives. Very little is ever said about their participation in the so called mortgage meltdown. In fact, they were said to be the good guys whose lead, if followed by sub prime would have averted this mortgage crisis which I refer to as a national disaster.

So here we are. Take a look at some of the headlines:

Reuters: U.S. seizes Fannie, Freddie, aims to calm markets
New York Times: In Rescue to Stabilize Lending, U.S. Takes Over Mortgage Finance Titans
Wall Street Journal (as reprinted in GATA): U.S. poised to grab more financial reins
RisMedia Real Estate News: Where Do We Go from Here?
MortgageNewsDaily: Treasury Department Announces GSE Conservatorship

Keep in mind as you "read all about it" that this action by the government - as was the case with the Bear Stearns takeover - occured on Sunday. This in itself seems a litlle strange.

Following is a comment I posted on the MortgageNewsDaily site. It is relevant to the situation not their article specifically.

Comment in MortgageNewsDaily 9/8/08 in response to:
Treasury Department Announces GSE Conservatorship

And it was called a "sub prime" crisis! by Larry Rubinoff, September 8, 2008

When everyone was running around accusing mortgage brokers of selling "bad loans" and blaming them for what they called a sub prime crisis, I said just wait until Fannie Mae and Freddie Mac fail. Everyone seemed to say that had all loans been made according to Fannie/Freddie guidelines the crisis never would have occurred.

So, what are all you people saying now? Still think it was those nasty mortgage brokers selling those terrible sub prime loans that caused this problem? Did you all buy into the fact that Fannie and Freddie were lying to you when they reported their financial conditions? Are mortgage brokers who sold Fannie and Freddie type loans bad guys now too?

The end result of all the finger pointing and laying blame on scape goats served only one purpose - to undermine and destroy the mortgage broker industry. To that end it was successful.

Not only did millions of people, governments, pension funds and others lose their investments in their stock holdings but many millions lost their jobs, their homes, their retirement funds and many their dignity.

Somebody shut down the credit market and somebody shut down the investor secondary market that kept the entire mortgage industry going. No one seems to address this topic at all.

Big business is being rewarded. Main street banks are being kept afloat - another cover-up - big business being made bigger and supported by "the full faith and trust of the government" at the expense of everyone else.

By taking over Fannie and Freddie, the "Government" now owns and controls the mortgage market and the mortgage business. More government control of our daily lives. As if government operates so efficiently and with so much fiscal responsibility. What makes anyone think that by owning these two companies it will enhance the American Dream?

Nationalization of business and industry is UN American. It is contrary to what this great country is all about.

Wiping out stockholder interests (even those supposedly safer "preferred" stockholders) does not serve the good of the people. Government is too willing to destroy investments only to enhance the interests of big business. The "bailout" of Bear Stearns by the Fed did no more then to enhance and enlarge the coffers and holdings of JP Morgan. Here again, the government allowed the destruction of stockholders interests for the interest of one very large corporation.

Who pays for all of this? We do of course. "They" are saying that "they" don't know how much this current takeover will cost or who will pay the bill. Do "they" really think we are that stupid? We the people will pay and so will the children of the people and their children and their children.

I believe we are seeing the beginning of the end for democracy and capitalism as we have known it. The mortgage meltdown, I believe was necessary for the controls to be centralized.

Wake up America. This latest round of bail outs is not meant to help any of you who are unemployed, losing their homes, having trouble feeding you families, paying for gas to go to work or just trying to survive. With over 10 million unemployed and growing by close to 600,000 per month, where is the help?