Sunday, May 6, 2018

Slow Going, Not Many GSE Cats and Dogs

Heartless/Clueless  HUD Secretary

The Cabinet Secretary--with the wife who strongly believes her husband needed a new $41,000 dinette set for his office—just came out with the Trump Administration’s stringent scheme to save HUD money and demanding low income and poor Americans to pay more for their federal shelter benefits and food stamps they receive.

The very intelligent, but poorly cast as a “houser,” Dr. Ben Carson—former brain surgeon, now head of the nation’s Housing and Urban Development agency---thinks both raising rents and forcing recipients to work to get their rental assistance will improve the lot of the poor, elderly, and mainly Black and Brown residents—by leaving more money in the Treasury’s General Fund for other Trump priorities (like dinette sets?).

Or, as some have observed…
While the President keeps talking about the common man and woman, most of his economic policies, such as his tax overhaul or financial deregulation, have aimed to provide relief to corporations, investors, and families in the upper income brackets. But it is key to understand that his legislative actions are happening simultaneously with his continued rhetoric -- attacks on immigrants, civil rights, gender equality, and anyone who dares to stand up for the ideas that he likes to deride as "political correctness" -- that secured the support of his base to begin with.”
Julian Zelizer, history and public affairs professor at Princeton University 

Again, I am struck by this Administration which has given so much to the wealthy and well off but would pay for it by squeezing pennies from the less fortunate.

Way back in the GSE Dark Ages, when the GSEs (including me for Fannie)  and others worked on the 1992 Housing Act and created a new independent regulator for Fannie and Freddie in the statutorily created Office of Federal Housing Enterprises Oversight (OFHEO), we gave HUD authority over the GSE housing mission, since we—and the (senior) Bush Administration at the time-- assumed that most HUD secretaries would be advocates for the low and moderate income Americans and support homeownership and enhanced rental opportunities.

That’s not the way it is today, unfortunately, but fortunately Secretary Carson has no real GSE role and nobody really listens to him, anyway, except for maybe dinette salespeople.

Hits from the past…..

The always excellent GSE legal reporting done by Peter Chapman noted this week the federal government (“yawn, yawn, what else is new?”) has asked for an extension in the Jacobs-Hindes case in Delaware. When the case first was filed, many of us hoped, wrongly, for a slam dunk, given the state laws violated and the fact that the plaintiffs were represented by Myron Steele, a former Delaware state Supreme Court judge.

But, alas, no “soup for us”…yet.

As we wait, a true value for us all is the J-H “amicus brief” (friend of the court) which Tim Howard submitted two years ago in connection with the case.

I read Tim’s amicus brief again, just recently, and I encourage all of you to avail yourself of it because Tim Howard wrote the most clear headed, easy to understand, non-foggy description of who did what to the GSEs and when, which should propel an unbiased Judge to rule for plaintiffs against the US government.
Remember, Tim’s entire life was forced into this matter when federal regulators in 2004, unjustly, put him (and former Fannie CEO, Frank Raines and Fannie Treasurer LeAnne Garmon Spencer) under a huge hostile black cloud, falsely suggesting they engaged in securities fraud.

Eight years later, in 2012, federal judge Richard Leon rejected the bogus allegations, formally scrubbing away this heinous lie.

As many know Tim then wrote a book and continued his work explaining the workings of the GSEs, their political and industry opposition, and collaborating with those who seek support the Fannie/Freddie mortgage model.

When the many lawsuits emerged in the wake of Treasury’s hostile takeover and subsequent “net worth sweep,” Howard authored AB’s  in conjunction with the Perry Capital suit and later the Jacobs-Hindes case in Delaware.

His amicus is a must-read for GSE newbies and a “re-read and read again” for those of us who need reminded of the many ghouls and financial berserkers (the banking interests and their congressional friends) who long have agitated against and seek to scuttle Fannie and Freddie.

Tim’s discussion is fabulous, educational, spiriting, and a reminder to all GSE fans just who did what to whom and how, to create the current unhappy GSE moment in which we find ourselves.

Just keep hoping the government is greedy for a fresh $100 Billion plus it could realize if the WH seeks to utilize its 79% plus ownership of the GSEs and monetizes its warrants.

But Treasury Secretary Mnuchin now claims 2019 or even 2021 could be the best time to bring back a re-privatized Fannie and Freddie, administratively, albeit with more housing finance limitations.

Although that could be just in time for new Democrat congressional majorities to truly revive them.

(Help yourself, twice, and read Tim's newest blog post discussing  low and moderate income housing needs, goals and history and how best to address them going forward. Once again, you see the ugly hands of the nation's large commercial banks trying to twist those needs to benefit themselves not the people and communities they need to serve.

New GSE Reform Legislation????


Sen. Mike Crapo (R-Idaho) and Rep. Jeb Hensarling (R-Tex)—Senate and House Banking Committee chairs, respectively--can talk all they want about new GSE bills to upset the mortgage market and reshape it to their liking but it ain’t happening, beyond mere introduction of same and some possible hearings as this election year quickly unfolds.

Financial shrimp on the Barbie, mates??

It has nothing to do with national borders, a little something to do with national banking regulation, and everything to do with a bankers’ DNA.

The latest tales of large bank perfidy from Australia show it’s the nature of banks to try and cheat, steal, and screw their bank clients until someone stops them.

Please remember, when you go to the polls in the nation’s primaries and the November general election, the GOP and the Bush White House has been chomping at the bit to restrain or do away with remnants of the Dodd-Frank financial services legislation and the Consumer Finance Protection Bureau (much as they have been trying to gut the GSEs).

The bank behavior provides all the justification ones needs for an active and aggressive CFPB, which is why the banks and their R congressional protectors abhor it!

GSE Earnings

As I predicted two blogs ago, the GSEs had super 1Q 2018 earnings, with Freddie generating $2.9 Billion and Fannie adding a whopping $4.6 Billion to Uncle Sam’s General Fund.

The naysayers can keep chanting “failed business model" and "GSEs swirling down the drain,” as the GSEs walk to the bank, because Mike Stegman, Jim Parrot, David Stevens and the Mortgage Bankers Association used those barbs to do their best to screw Fannie and Freddie and are still are trying.

Ain’t happening this year, dudes, as the GSEs payments to Treasury for the $187.5 Billion their boards were forced to accept in 2008 now has been returned with about $280 Billion in excess of that $187, since as we know those Bush and later Obama  guys fixed the deal so only the GSEs would not be able to pay off their federal financial support debt but be in perpetual financial servitude.

Rudy Said What? Daniels and Her Lawyer Applaud

Let’s see Sarah “Biscuit” Sanders spin Rudy Giuliani’s statement to Fox and Hannity that President Trump repaid Michael Cohen for something about which, previously, the POTUS declared he knew nothing, i.e. a $130,000 hush money payment to adult film/porn star Stormy Daniels so she wouldn’t go public that she had an extra-marital affair with President Trump, shortly after Melania got pregnant with Barron Trump.

Yay Rudy!!!

Did Michael Cohen attend “the worst law school in the nation?”

Maloni, 5-6-2018