Lots
of Holiday “Cats and Dogs”
Former Obama Treasury Secretary Tim Geithner is out hustling,
hitting the book selling circuit and TV interview scene, pitching his new book
about the 2008 financial meltdown.
The flinty former banker (is there another kind?) already
grasped for a sympathetic straw in his first interviews, reminiscing AND
APOLOGIZING, “We should have done more for individuals not the institutions."
Yes, Timmy, but if my
aunt had balls, she‘d be my uncle.
Talk
is cheap and 9.5 million mortgage borrowers still are under water on their loans
while—surprise, surprise--the banks
are flying high with record profits in 2013. (And nobody in your Admin forced FHFA’s
Ed Demarco to help F&F mortgagors in those circumstances, letting him
mostly ignore them. But the banks got top shelf treatment.)
I called
Secretary Geithner “the DC Democrat the big banks like the most.”
If
I was interviewing Mr. Geithner, today, I would ask:
-- “Why didn't you
insist that some of the $425 Billion in Treasury’s Troubled Asset Relief
Program (TARP) money pay down individual mortgage loans for
borrowers, who had good credit history, but whose mortgages were severely/partially
underwater?
That
money could have gone right to the banks, wiped out the mortgagors loan
indebtedness, and not even touch the borrowers hands, reducing any risk the
money would not be used as intended.
--“Why didn’t you and the other financial mavens insist on reciprocal
bank lending when you lavished all of that taxpayers cash on them, with no real
strings? Why did you permit the banks
just to enhance their bottom lines--arbitraging short term Treasury and Fed
securities with their/our new money—and allow the depository institutions to go
almost two years without generating any significant commercial or mortgage loan
originations?”
--And finally, “Why were F&F charged 10% repayment dividends—and
denied any congressional representation capacity--when banks only were charged
5% for funds borrowed from the Treasury and had no limitations on their ability
to influence the Hill?”
I wish I could measure
the political/media outrage and angry hyperbole over the $187 Billion the Treasury
infused in Fannie and Freddie, some of which continues still, against the very
few complaints coming from Congress and the press over more than double that
amount of Treasury support for the banks.
It’s
always good to remind people that F&F have returned to taxpayers their
$187.5 Billion with an added $25 Billion cushion.
Speaking of Gall…..
There is an old Ralph
Waldo Emerson dictum, “If you are going to kill the King, you better not
miss.”
I wonder if Virginia Senator Mark Warner (D-Va.) will
bury his ego enough to go back to Freddie Mac, where he spoke a few months ago
(and maybe even visit his constituents at Fannie, too), and do a mea culpa for
trying legislatively to kill those two workplaces and cost the employees their
jobs?
Most F&F employees live in Northern Virginia, which
would have felt the financial and economic shock if Warner’s CWJC bill had been
approved.
The at-times pompous Warner may not loudly campaign that
he was recruited by Senator Bob Corker (R-Tenn.) to be the lead Democrat in
slaying F&F, But now that the Senatorial pair apparently have failed, What’s
their next step?
(“Hey,
Mark. Let’s you and me nail your
constituents, heh, heh, heh and then have us a fundraiser.”)
We know Corker doesn’t have thousands of F&F
professional employees, their families, and relatives living in his state (can
you say voters?), but the opposite is
true with Warner and he’s up for November re-election in Virginia.
Will Warner try and do a little fence mending among F&F
folks who could be formidable, numerous, pissed, and raise a lots of money against him, if they were so inclined?
Having flopped, does he still want to take credit for attempting
to destroy all of those local jobs and the negative impact that would have had
on the Northern Virginia economy or maybe consider a strategic pivot?
Or maybe—if Warner gets
re-elected—he’s going to keep coming at F&F, which suggests those targeted mortgage people
should do something now??
BTW, Senator Warner, please tell your money raisers—who send
me frequent requests—I still don’t want to support your fundraising efforts.
Frankly, as a show common sense, I would urge you to dip
into your reported $400 Million to $500 Million net worth and self-fund your
own campaigns.
The
MBA’s Dave Stevens Said What?
For a guy who just had months of his lobbying efforts
jammed back in his face like a cream pie--when the Senate Banking Committee failed
to pass the CorkerWarnerJohnsonCrapo bill with sufficient numbers, likely
ending its consideration for this year and possibly the immediate the future—the
Mortgage Bankers Association’s David Stevens seemed to take a lot of bows at the
MBA National Secondary Mortgage Market meeting in NYC last week.
Stevens speech, linked below, makes it sound like he and
the MBA influenced all sorts of positive things, including FHFA Director Mel
Watt pronouncements last week, which heartened so many in the mortgage world.
Stevens was engaging in some major spinning when he
lamented the F&F system was not approving lots of low income borrowers
and mortgagors of color.
Of course, Stevens has spent all year trying to blow up
F&F, substituting instead his CWJC “let’s give it all to the banks” plan.
I’ll let the F&F experts—with whom his members still
must work--respond to Stevens on the applications matter, but two things leaped
out at me as I read Stevens comments.
(Link to Stevens’ comments.)
It’s the lenders’ job to review mortgage
applicants and apply the F&F guidelines for acceptance, based on which
securities they seek. It’s in the primary lender’s domain where decisions get
made to approve or not approve a mortgage loan application and then to send it
either to F or F.
Despite its' rejection, Stevens continued
to tout the CWJC proposal over the current F&F system, which he claims is
flawed.
In waxing over the dear
departed CWJC (large and bold text for
emphasis), DS never admitted—his low-mod wailing to the
contrary--there was nothing in
CWJC which compelled a lender to make loans for lower income families!
For emphasis, I am going
to repeat there was nothing in CWJC
which compelled a lender to make loans for lower income families!
Yes, CWJC would create a
mortgage subsidy fund but with no requirement for any lender to dip into it.
(How about annual
low-mod enforceable lender goals, Dave?)
Stevens took credit for
MBA praising F&F employees, but he seems to skip over his heavy personal involvement
in seeing the giant mortgage investors disassembled and allowed to die, with
nothing functioning in their place, save CWJC’s Rube Goldberg regulatory
arrangement and its huge new federal subsidies to the nation’s biggest banks
scheme.
Bloomberg’s Jody
Shenn discusses the MBA exec’s racial mortgage rejection comments and some
post-speech rebuttals he produced.
Stevens’
allegations produced a “Twitter storm,” according to a Housing Wire report.
Here
the New
York Times weighs in on reactions Stevens comments produced.
Grease
F&F Bandwagon Axles?
I predicted that congressional and industry observers
would start looking at ways of reviving Fannie and Freddie, since that might be
a more promising way to produce a revived and efficient national mortgage finance
system, with more access for all borrowers and lenders, and much faster and
cheaper than anything in the CWJC legislation, given the bill’s controversial bank
mortgage security subsidies and virgin insurance regulatory structure.
John Taylor, President and CEO of the National
Community Reinvestment Corporation, publicly called for what is, in
fact, occurring behind the scenes with some influential housing and mortgage
finance people discussing the revival of F&F. (Probably not David Stevens,
right now.)
http://www.huffingtonpost.com/john-taylor/housing-finance-reform-sh_b_5339780.html
Foreign
Banks Break US Laws; Join the Big US Banks, It’s Easy!
Only because it tracks so well with what I’ve said and
written, in almost every blog I’ve produced this year and most of last, here’s
this week’s story about the Swiss headquartered Credit Suisse violating US tax laws (and our banking regulations).
Here is another “this week” story about France’s BNP Paribas bank, vitiating our bank laws
by managing/moving funds for Iran, Sudan and Cuba.
By all means Senators Corker and Warner, let’s turn over
our national primary and secondary mortgage markets to the big banks. They are
responsible and would never try and manipulate any regulatory or legal systems,
right? ;-) (Sarcasm!)
(Heh,
heh, heh, now Mark and I have some fundraisers coming up…..!)
One
More DeMarco Fiasco
I have hammered away on the Common Underwriting Platform
(CUP), which Ed Demarco forced Fannie and Freddie to create (single purpose
Delaware corporation) and fund, as part of Ed’s dream about doing away with
F&F.
Hoping he could preside over killing off F&F, the former FHFA Director, first asked them
to facilitate their deaths by creating an underwriting platform to be shared with
the domestic mortgage market.
Right now the project has a vague annual cost of
possibly $300 million, with up to 300 new employees headed offices in to Bethesda, Maryland---which currently are empty).
But last week, the FHFA’s Inspector General found a few major
problems with this DeMarco creation.
End it Mr. Watt; putting your fingerprints on
DeMarco’s project just attaches you to a total waste of taxpayers’ money for
reasons I’ve spelled out in previous blogs. (Every wasted CUP dollar is F&F
revenue which doesn’t back to taxpayers or is lost to possible future F&F
recapitalization.)
If you believe it’s absolutely necessary (I don’t),
detail 20 techies from each company—or 40 from Fannie or Freddie--and have them build one, giving them a year to complete
the task or dump it.
Who Said What
Recently?
Josh Rosner offers some tax advice to facilitate
mortgage finance and boost the middle class.
How about this tome on risks to bank reputations for
violating federal government rules?
Here’s another perspective on underwater homeowners
from the Hass Institute.
Bruce
Katz,
a former Senate Banking Committee Housing Subcommittee staffer, deputy to
former HUD Secretary Henry Cisneros, and currently a Brookings Institution’s
VP—writing in Politico-- offers some thoughts on what new HUD Secretary
Julian Castro might undertake
http://www.politico.com/magazine/story/2014/05/julian-castro-hud-107059_Page2.html#.U4FmlJnD-ZM
Remember, hug a veteran;
I’m able to write this and you are reading it because of them and their sacrifice.
Maloni, 5-25-2014
Again, comments, questions, (some) epithets welcome; see below.
Again, comments, questions, (some) epithets welcome; see below.
