Sunday, October 2, 2016

Congress goes home to campaign

Congress Goes Home, Here’s Your Chance

(Yay Judge Margaret Sweeney; need a few more from you!)

You folks at home, lock your doors and windows, keep the children within arm’s length, and your cats and dogs in. Check your alarm systems and don’t put any fresh baked pies on the window sills. Arm yourselves.

Congress has departed DC, until after the November 8 election, and its denizens are headed home to seek your votes, having done nothing in the past two years except fight and, like chimpanzees, show their asses to one another and the world.

Most of them should be embarrassed to come back and ask your electoral help because they did so little to earn it, save harass President Obama who turned to aggressive executive action because he couldn’t get the GOP to respond or cooperate. Yes, that’s my take and I think it’s easily provable.

But, beyond that. With so many of your elected officials home and pandering, go meet them and exercise your right to tell them what you think and what you want.

They actually do want to hear from you, so give them an earful. I repeat, this is your opportunity to engage them one on one. If they are facing you, they’ll try but they can’t get by with a glib non-answer or a “keep your views in mind” letter describing events about which you didn’t ask.
You might surprise yourself about how effective an advocate you can be.
Sure, talk about the GSEs, as I lay out below this segment, but don’t stop there.

They’re going to have to work with a new President/Administration in four months and you need to tell them what you expect, depending upon who wins on Nov. 8, Donald Trump or Hillary Clinton, barring something dramatically unforeseen, although in this year, anything could happen.

Do you want higher taxes on the wealthy or lower; do you want a more aggressive US military/diplomatic response in the Middle East, with North Korea, and Russia, let them know.

Are you PO’d with likely Russian hacking of US political and other institutions, possibly with an eye toward corrupting our election results, tell them.
More trade deals or fewer?

Do you want more infrastructure spending, more or less environmental controls; more open borders for Middle Eastern and other immigrants or tighter rules?

They need to hear from you. It’s your chance and don’t waste it.
But make sure that you and all of your family and friends are registered to vote for whatever political party you like and then make sure you do vote.
Don’t sit it out or throw your support to one of the fringe parties. IMO, both are hollow gestures.

Maloni to Congress: Connect the Dots

It certainly was a deserving dish served/thrown red hot in the face of Jack Stumpf, the Wells Fargo CEO who took his lame, “It’s my fault and the buck stops here” to non-accepting Senators and House Members twice in the past two weeks.

Stumpf’s bank was guilty of starting thousands of phony accounts for clients/customers who never requested them, paying bounties to Wells employees who did the evil deeds.

Although Stumpf felt the predictable wrath of Sen. Elizabeth Warren (D-Mass.), he also got stung by House Members, D’s and R’s, since he was an easy target owing to the bank’s transgressions and ripe for the beat down they delivered.

But, don’t be fooled or lulled into thinking the big banks are going to get spanked permanently. They will get shouted at--and Stumpf could lose his job and already has lost money--but few sanctions are coming because the GOP likes the big banks, as we have come to learn.

GSE supporters need to capture this moment and press the argument, “The banks are prone to break rules; it’s part of their DNA” with their representatives since pols of all stripes, for a variety of their own selfish reasons, want to grandstand and pretend they have it in for the big financial institutions.

 “Hey Senator/Congressman, do you realize these larcenous, anti-consumer behemoth banks you just excoriated are the same institutions you are setting up to inherent the nation’s primary and secondary mortgage markets when/if you support disassembling Fannie Mae and Freddie Mac?”

“Duh, Huh?”

I don’t think most of these Senators and Congress people connect those dots and see the big bank larceny (and it’s not just Wells, although it’s the most recent institutional miscreant) and it's potential to foul up even more.

If any of these Senators or Congressmen intellectually or politically see that link, they aren’t talking about it.

They don't seem to understand, if the GOP has its way, it’s the same banks they're now hectoring which will get control, with a ribbon tied round it, of the nation's mortgage finance system (with added federal subsidies), 
So voters/constituents make them see the point!

All House Members are up for reelection in November and all will home campaigning.

If you believe in keeping the GSEs operational and helping families finance their homeownership dreams, meet and educate them.

Raise the GSE issue and lead them through the simple thought sequence which starts with, “The GSEs operationally act as a governor on big bank mortgage behavior. Act/vote to remove Fannie and Freddie for whatever reasons, and nobody—including their federal regulators—will be able to stop banks form returning to their corner cutting, process undermining ways. It’s in their bank culture to try and cheat.”

For House R’s remind them the disdain, during the Wells hearing, Jeb Hensarling (R-Tex.) had for the federal regulators. They didn’t stop Wells execs or employees from creating these unwanted checking/savings/credit card accounts and they can’t/won’t stop abusive mortgage lending from similar institutions, if the banks go there, again.

Don’t forget, more than a third of the Senate will be running next month, too, so don’t spare your Senators from the same message.

GSEs are not top of any congressional mind, but chances are your GSE/bank concerns can be elevated to that position if you bring it up and remind them they are connected and the Congress might get a chance to vote on some of these matters.

Soon we’ll hear about some disposition between the Justice Department‘s engagement with Deutsche Bank, not headquartered in the US, but which does major business in our country.

Justice has sought nearly a $15 Billion fine for DB’s mortgage backed securities misdeeds. The bank wants to negotiate and pay less and we’ll know that amount soon enough. But it will be in your back home newspapers and media and make sure your federal elected officials know you’re informed about that, too.

“Call/write to your Congressman and Senator” is a mantra many of us use to encourage civic/political activism, but this time, they will be close, roaming around your neighborhoods and at local meetings pitching you on helping them.

For the next four or more weeks, those not hiding and avoiding their constituents, will be easily reachable. Turn the process around and ask them for whatever federal policy you and your family want and feel you need and deserve.

Worth noting: The Washington Post on Saturday, 10-1, reported that Donald Trump’s businesses owe millions of dollars to that same Deutsche Bank, putting this man who would be our President in a lousy position if federal agencies have to move against one of his personal lenders. (As if you needed another reason to not vote for the Donald, since when you get this blog, you’ll have read about his latest tax "issue.")

New York Clergy Speak Out for GSEs

Church leaders pushed back this week on those who would violate the GSEs?

Thirty eight minority church leaders, who support the continued operation of Fannie and Freddie, wrote to Senator Chuck Schumer (D-NY), a member of the SBC, both making the GSE case and nailing the large commercial banks for ignoring their neighborhoods, trying to destabilize or destroy the GSEs, seeking just to acquire F&F’s annual revenues.

Schumer (D-NY) is set to be the Senate Majority Leader if the Democrats win 51 seats or will be the Minority Leader if they don’t. The letter was copied to all the New York delegation serving on the House Banking Committee and FHFA Director Mel Watt, as well as others.

In establishing the importance of full GSE service to low and moderate income families, especially minorities, and the corresponding lack of big bank interest in serving those communities, the clergymen wrote:

Since their inception, Fannie Mae and Freddie Mac have acted to ensure that banks and other lenders would be able to extend mortgage credit in good times and in bad times. Their important service to our economy, from 1938 to the present, has helped lift millions of families out of economic bondage and, by supporting homeownership, provided those families with a chance to join the middle-class, increase their self-sufficiency, and improve the social and educational outcomes of their children and communities. However, as our communities of color seek to pursue those same goals today, Washington is inexplicably curtailing and threatening to eliminate the business functions performed by Fannie Mae and Freddie Mac

Conversely, the biggest banks have consistently displayed a disinterest in lending to us, and the likely effects of their feverish support for “GSE reform” should be as transparent to you as it is to us: more gentrification in our neighborhoods, more rental properties across our communities, less homeownership opportunities for our parishioners. The efforts of these big banks to mint another dollar by controlling the housing finance market will result in an increase of systemic risk, come at the expense of homeownership, reinforce the economic disparities plaguing our communities, and shut the door on our economic self-sufficiency.

Yay, Clergymen.

Their entire excellent letter can be found on GSE Links, thanks to site host “Whiteghost.”

Let’s see how the anti-GSE crowd handles this latest positive campaign, since, already, they are on the defensive owing to the majority of their GSE systemic alternatives will just make the big banks even stronger and groups like the Community Mortgage Lenders of America highlighting those uncomfortable facts.

Maybe this church leader communication could be a trend where housing-enlightened clergymen in other communities—large and small--get together and send similar letters to Congress, especially since certain Washington policy makers have trouble connecting the big bank opposition and GSE dots.

Maloni, 10-2-2016


Anonymous said...

I had unexpectedly run into my Congressman back in August, briefly told him the saga of F&F. He requested that I send him more info, and I did just that.. I sent a 5 page email with the history of F&F, the takeover, the lawsuits, and my sugestions for legislation to return F&F to the shareholders. A week later I confirmed that his staff had received it, but I wasn't sure he had seen it himself.

Today, I knew he would be at a local street fair, so I carried a printed copy with me, found him there, and gave it to him. Spent a minute at the most going over the salient points; didn't want to impose too much. If nothing else, when other House members introduce legislation, he'll at least have our viewpoint to remember.

steve . sz at aol

Anonymous said...

Really? You rather have a creepy pervert back in th White House along with one of the most dishonest people to ever enter into politics vs. a successful businessman? You are sooooooo right on the GSE issues then you throw in your political view to ruin it. Like fake TH717, who calls us White Trash but won't let us know what color trash he is, you guys are sooooooooo aligned to your ideology that you can't see through the FACT that your Party is the one who created the NWS to steal your money, continues to steal your money and will continue to steal your money in perpetuity. That is sooooooooooo bizarre to me I just can't understand it. Yes, I have wrote this to you before. I enjoy your insight and writing until you inject the liberal ideology. I agree with 100% of Trump's stated Policy's but not how he expresses them.

Anonymous said...

These same Clergy are the ones who preach God's word in the pulpit but disregard it when supporting a President who lights up the White House like a Rainbow, supports Abortion and hasn't done squat for the black community. Nothing.

Bill Maloni said...

Steve--Good for you; you never know where/when that conversation will pay off and thank you.

You now, also, have a focal point to follow up with Congressman; hope you can use it.


Anon--First off, sorry to have disappointed you, but I suspect my perspective and GSE history goes back a little further than yours.

For the time being, let's leave Trump and Hillary out of this, since neither of us know what either would do re the GSEs if they get the POTUS job. I've written that. Right now her advisers are not "Fannie friends."

But, in my 30 plus years on GSE matters (21 working at Fannie and almost 10 doing my blog), starting with Ronald Reagan's 1983 Budget, the GSEs have been targeted primarily by the Right, which never viewed them as shareholder owned businesses.

You are right about the NWS but the scheme started before Obama with the GOP and business opponent opposition in 1983 and Hank Paulson just took advantage of events to try implement that long held partisan desire to kill the GSEs with HERA. Look at the disparate treatment of the GSEs versus the banks, under Paulson and TARP.

Geithner/Lew just wanted to use them as a cash cow for other Obama priorities. I have blogged/ranted/spoken out against both efforts.

In my professional years and later, I have worked with some GOP Senators and Members who were GSE advocates, but overwhelmingly opposition to Fannie and Freddie have come from the Republican party, their big bank allies, and the conservative media. That's been my experience and with the howling that goes on today from Bob Corker to Jed Hensarling, I can't see that changing, no matter what facts get shown to the public and policy makers.

I hope that one or more pro-plaintiff decisions will change that but I am dubious.

Since you raised it, I'll close with saying--and I would have said this before the latest Trump news--I am not sure how good a businessman he is or how successful he's been, or how much he really is worth. We only have his word and he'll never admit to being anything but "fabulous, super, wonderful," etc. etc.

However, I am convinced that he doesn't have the temperament, the world knowledge, the sophistication, or the necessary character to be our President. You've heard all of the reasons in this campaign, so I won't repeat them.

He's a bully and a hater and I hope he gets no closer to the White House than sleeping in his new hotel on DC's Pennsylvania Avenue ($800 per night rentals). You and other backing him should be concerned by his warm words for Putin and the obvious Russian interference in our election process. I think there is a connection.

He owes millions of dollars to the banks and I can't easily see him disappointing them and supporting the GSEs.

But please, and I mean this, keep writing to me about GSE matters. I welcome your questions and comments, all of which I will try and answer.

Bill Maloni said...

Anonymous--The last time I checked, abortion isn't prohibited by federal law and has been approved by the Supreme Court in Roe vs. Wade.

Anonymous said...

Not arguing any of your GSE insight or opinions. But you haven't answered my question or comment. The one who wants to kill your dog isn't as guilty as the one who does it. This is what's sooooooo bizarre. Who cares how long the Republicans wanted F&F killed. It's the Democrates who pulled the trigger and wouldn't call the ambulance. Is that not a fact? You guys keep spinning the facts. I am very aware of Corker and the RINO Party and Independent. I just wish the blame would be where it belongs.

Anonymous said...

Great GSE commentary, but it is so disappointing to hear you support a literal criminal like Clinton. She exposed the nations highest secrets and yet you and other liberals are willing to act as if that didn't happen. How could you possibly justify these actions? Wanting to have a border or calling out extremist Muslims does not make you a hater or a racist. But again, where are your morals when your willing to support Clinton, who we know has done irreparable damage to the country? Never mind for the moment the sea scroll of her other other failures over her entire political career.

Bill Maloni said...

I don't know if these comments are from the same "Anon," so I'll treat them separately.


I won't contend that the Obama Democrats inflicted major GSE damage. That's what the court cases are about, which I hope go for the plaintiffs. But the current Republican Congress supports most of those actions, so legislative relief is unavailable.

Republican Hank Paulson craftily tried to use HERA to finish them off, but far.

As noted the GOP still is at it, so their fervency should be noted by you and others.

So, I have a hard time seeing the Republicans being for anything which perpetuates the GSEs.

Sorry, that's my history, experience, and instincts.


Anon #2--

Clearly you are not a Hillary fan or supporter, so I won't suggest why she is a better choice than Trump.

Which laws did she violate; did I miss that indictment or are you just making a subjective call? Obviously, you don't trust the head of the FBI (a Republican).

The House Select Committee on Benghazi spent $8 Million dollars investigating this matter and found nothing; she spent 11 grueling hours answering the same politically-motivated questions from them and her R inquisitors produced zilch.

She is not my favorite Democrat, but the two parties produced the choices we have and--in my mind--she soars high over Trump in so many ways.

Trump has hurt himself, more than any Democrat has, and will damage the GOP in coming elections, if his current form holds.

Both of us could have been bigger successes than we are, if our fathers started us off with a few million dollars sweetheart loan.

Anonymous said...

Keeping top secret gov info. on an unsecured server in her basement, which we can accurately assess was hacked. No, I don't trust the FBI or Loretta Lynch. Why do so many players need immunity if they did nothing wrong? How about Bill meeting Lynch on the tarmac just to talk about the grand kids?

The select committee on Benghazi didn't have all of the emails during her "grueling" testimony. Remember the one that came out weeks later where Clinton tells Chelsea on the night of the attack that it was a terrorist attack? Then she proceeds to lie to everyone along with admin.(even to the family's of deceased) that it was caused by a video.

She's a scandal ridden liar with zero achievements during her entire career. I only pray that Wikileaks finally exposes some additional smoking lies that will end her campaign once and for all. Trump is light years ahead and last I checked it's not easy to turn a couple million into multi billion!

Anon #2

Bill Maloni said...

Anon#2--As noted, I am well aware of her flaws, again, she would have been my first choice, but you can't convince me that Donald Trump is a better option to lead our country.

Let's root for more Sweeney and an appeals court decision for the good guys.

Bill Maloni said...

Opps, she "would not have been".....

Anonymous said...

I don't think an indictment would have come from the DOJ anyhow, as they have shown they can be a partisan bunch. I would have felt much more comfortable about Hillary's email scandel, if they would have presented the evidence to an independent grand jury and let them decide if charges should have been brought

Bill Maloni said...

Here's where "we" get hosed and are at odds.

You have little faith in institutions which are influenced by partisan feelings (one way or the other) and I can understand that. Yet every GSE shareholder is hoping these federal judges
--who have been appointed by various Presidents, read the newspapers and have some feeling for the "GSE shit wall," as I call our business and political opponents efforts--will make a call for the plaintiffs.

It's like believing both in the "tooth fairy" and "Christmas."

Both are possible, but.........

Anonymous said...

Bill - We are polar opposites politically, but I'm with you 100% on Sweeney and hope that we do in fact get a positive appeals court decision. Left or right, the GSE situation should offend every citizen and the media should be covering this story.
Anon #2

Bill Maloni said...

Once again, we agree on that. But, right now, they aren't, because the public really hasn't been hurt and FRMs--for the most part--are readily available and fairly priced (because of F&F).

Part of my hope is that--better than any Gretchen Morgenson or Bethany McLean articles or a "real" Tim Howard blog--a positive plaintiffs court ruling will generate the kind of news
that will force people to read/hear and understand, maybe for the first time, what many of us have been saying for years.

Most GSE advocates are suspect or can be balanced by the other side, but IF you get a solid plaintiffs win or two, heretofore closed eyes will open

Anonymous said...


I'll take a shot at the benghazi thing.

Here is what troubles me the most. We are Americans. We react and we go. In times of trouble we respond. When the twin towers were hit, how many first responders died trying to save lives? See, as Americans we "damn the torpedoes and full speed ahead". Its simply the mentality, we are a fight first nation, that when struck we strike back! We meet fire with overwhelming fire! When shot at we BLAST back! Its just the way we are; we are Americans and we are to be feared if fired upon.

So, remember the benghazi siege lasted like 12 hours or more.

Here is my question, when the US Ambassador and crew were finally caught and killed... where in the process of launch and response did all the American service men and women responding to the call of distress need to be recalled from? Think about it, were they "just about" to hit the ground in benghazi? You know repelling down helicopters ropes into the scene? Were they 1 block away, running fast to the aid of the Ambassador? Were they 10 clicks out? Were they, about to board a plane? Were they in their bunks with the covers up tight and tidy?

You see some how no one ever departed....

See... Answer the question ... why not.

Who stopped Americans from rescuing Americans?

That person and persons have no business ever being president of anything.

Sorry for the rant.

I am passionate for Freddie and Fannie. The system works. Fannie and Freddie has lead to untold wealth in this country. Its the backbone of housing and affordability for millions. While I am not a fan of socialistic tendancies, the common good like national defense, roads, utlities, and access to affordable home ownership are good things, as is assistance for those in need who can't do for themselves and some other programs.

Bill Maloni said...

I agree with all of that.

As I am fond of saying and writing, "I lived it" and I know the GSE system delivered, efficiently, fairly, equitably an excellent mortgage loan, which benefited mortgagors but--in addition--almost of those commercial interests in the mortgage finance real estate chain (a fact which upsets me when I see the Builders, Realtors, and Mortgage Bankers Association oppose the GSEs).

Busting up the GSEs makes no sense, especially given the less piss poor alternatives.

The nation's too regularly experience with big banks foul ups underscores my point, but--as we've discussed--it's tough getting the public and congressional policy makers to buy in.

Anonymous said...

Bill - What are thoughts on the Sweeney info? Any idea when we may actually see these docs publicly? I don't think the gov will appeal because her opinion is so well written.


Bill Maloni said...

Anon--Great minds.

I asked Tim Howard the exact same question an hour ago, hoping his connections with the Fairholme folks would give him a fresh perspective.

After I hear from him, I'll share what I can.

Anonymous said...

Great! It would seem that if no appeal is made, then Sweeney could decide to remove the seal. Would you agree? I do wonder though if gov will try to delay just so that these docs don't become available prior to election. BTW - not looking for a political argument, but if POTUS/admin are shown to have purposefully altered financial projections and intentionally deceived lower court, that would seem to become a much larger story in the media. Thoughts?

Bill Maloni said...

Heard back this morning and with his usual thoughtful caveats--"I'm not a lawyer and I don't follow the legal developments as closely as others"--Tim felt much of it depends on whether the government challenges her ruling and, if that happens, what the plaintiffs choose to do legally.

He also thought we are looking at months not weeks or days.

On your second point, sure. But BHO isn't running and what could the GOP say about him that they haven't already?

Your didn't mention plaintiffs possibly deposing the outgoing President?

Anonymous said...

Thanks. Disappointing to hear "months". I was honestly thinking if they decided not to appeal and further irritate Sweeney that she might actually remove the seal within days. I guess we'll see what gov does soon enough.

I suppose that's true regarding BHO. I was just thinking that if docs were damaging enough and it became a true mainstream media story, that certainly wouldn't be a help to HRC campaign. Maybe effect wouldn't be that much. I just want the docs out in the public so that this whole drama can get closer to being over!

How long would it take for P's to be able to depose him? I'd imagine that would be a long legal battle.

Bill Maloni said...

Anon--Just so we all are on the same page.

Tim doesn't know and doesn't claim to. He was speculating and so am/was I.

But, I'll take the government not appealing and letting her decision stand.

I am aghast at the multitudinous legal maneuvers available to those--on both sides--who wish to prolong the legal process.

It costs a lot of money, which explains why the plaintiffs need deep pockets and seem willing to go there. On the other side, the government has the taxpayers, unless someone stops their parade, because lack of money won't.

Come on Appeals Court.

Anonymous said...

Absolutely on the same page. Just commenting on opinion.

Let's hope for no appeal and a win out of the Appeals Court.

If we're fortunate enough to get a win, what's your take on a reversal vs. remand? Reversal would typically be appealed yet remand required an admin record would be very bad news for gov. Do you think if the current docs discussed are damaging enough that gov. would simply look to settle on either a reversal or a remand - maybe limit any further damage from drawing it out?

Also, do you favor common or preferred? For disclosure, I'm 75% common and 25% prf'd.

Bill Maloni said...

Unfortunately, both are longshot payoffs for the reasons we discussed, but I have purchased both in accounts for my grandkids.

If the circumstances warrant a bounce, one is a contract, while the other is cheaper and
should benefit from more positive headlines.

Anonymous said...

Anonymous said...

Bill - What's your opinion on this ruling and how it relates?


Bill Maloni said...

Anon 2--

With the standard "I am not a lawyer"caveat, I think it's nice, but.....the court gave a simple fix to maintain the status quo.

Big picture, one way, we want them to be considered independent if the CFPB decision ever goes forward (CFPB is supposedly appealing), but in another it's FHFA's relationship with Treasury, i.e. rolling over and giving in to all UST's demands, which seems to be the heart of plaintiffs' "sweep" challenges.

As I wrote elsewhere, I don't believe in "GSE silver bullets."

Our side wins if the plaintiffs prevail and they know far better than I whether amending their case to reflect the CFPB decision is useful or not.

The fact that Olsen is on both cases, clearly is useful.


On a related front, if we didn't discuss this, it looks like Sweeney doesn't move until, possibly, this time next year, because of all fo the procedural issues.

Wild card is a departing Admin and how it wants DoJ to pursue it--between now and January-- as they leave town