Sunday, June 10, 2018

Back and rested; point me toward the bad guys!





I’m Back!!



After spending 11 days in California with two of my (four) sons, my three grand kids, wonderful daughter-in-law, and my youngest boy’s super girlfriend, I have returned, revived, and ready to do battle.

I got to meet for the first time my grand dog “Angus” and help build the doggy gate to keep him from the new carpeting in the second floor; see my 10 year granddaughter graduate to middle school (she delivered the opening prayer); play in her select soccer team game;  watch my 12 year old grandson play four ice hockey games, i.e. “skate Rex, skate”; and see my five year old granddaughter at her ice hockey practice where she was the swiftest skater on the ice and a clearly budding athlete as she grows up. (She has an array of backyard athletic equipment to delight an Olympian and can use all of it, with agility. Remember the name, Seaver Star Maloni, in a few years, she going to be playing hockey, soccer, or softball at some California university.)

Did I mention my three visits to the beloved Barona Casino and the wonderful treatment I received there, although it didn’t match my delightful family experience (I love SD’s fish tacos!)?  If you a casino enthusiast and traveling to San Diego, try and visit Barona. It’s a treat, both in service and amenities (be sure and hit the Buffet)!

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As usual, not much new has happened on the GSE front while I was in Cali, which mostly is good news. We’re headed for summer doldrums.

Before I left, there were rumors that this Administration might replace Mel Watt when his term is up next January with someone currently in place at another Executive spot, ala Mick Mulvaney, doubling up at Director of the Office of Management and Budget and head of the Consumer Finance Protection Board, which has been a fizzle for every US consumer but a boon for the banks, as Mick tries to scuttle as many of the internal pro-buyer/shopper CFPB operation he can.
I don’t believe that will be the situation, but if that becomes the call, IMO, the three guys who could get anointed to do double duty overseeing the GSEs and their day jobs are: Treasury’s Craig Phillips, currently Secy. Mnuchin’s chief assistant; Brian Montgomery, who now runs the Federal Housing Administration (FHA); or the mostly undesirable choice  (for my money) Michael Bright, who heads Ginnie Mae and worked for Sen. Bob Corker (R-Tenn.) and various other interests lusting to do away with the GSEs.

The Mortgage Bankers Association were still looking for someone to succeed their retiring President/CEO David Stevens, for whose long term good health we all root. House Banking Committee Chairman Jeb Hensarling (R-Tex), whom I thought would be a certain pick, claims he’s not interested and rumors are that the MBA wants a manager, not a pol for the job. We’ll see.

(As I was writing this segment on June 7, the MBA announced that it had hired Robert “Bob” Broeksmit to follow David Stevens. Bob is a neighbor and an industry vet, comes from his own mortgage management firm, but as early rumors suggested he is far more an industry insider than politician. Good luck, neighbor.)

The National Association of Realtors also is seeking a new Exec to follow Jerry Giovanello, who will retire this year. Joe Ventrone, long time DC housing maven (former GOP Hill housing subcommittee staffer, HUD official, and NAR veteran) has taken on more of the Realtors’ GSE portfolio.

Speaking of the MBA, it this week sent an eight page tome to the GSE regulator asking to be let in on the decision making process far sooner than has been the case.

Why? Did they send similar letters to the Fed, OCC, FDIC and bank regulators asking for more /more early communications and involvement in bank activities regulated by those agencies?

The trade association so worried about the GSEs—because of this big bank members—might want to pay closer attention to what the Justice Department, Treasury, and SEC are investigating related to possible “trader manipulation” (read bank trading desks and Wall Street firms) of GSE debt and MBS securities sales.

Maybe Broeksmit can/will exercise superior judgment and turn the MBA from its constant belittling and harassment of the GSEs, which I long have suggested  only benefits their big bank members as the expense of their small members whose operations rely on the GSEs.

GSE BS

Below is the kind of rightwing GSE hyperbole which regularly gets peddled in this town, in this case by the staff blog of Citizens Against Government Waste (CAGW) and the Council for Citizens Against Government Waste (CCAGW). blog@cagw.org.

Very few recipients challenge these scurrilous reports and their memes fester, so I encourage any reader who wishes to, send your (critical?) comments to the two organization sponsoring this Fannie and Freddie crap. (copy your Congressperson and Senators on it, too.)

“On September 6, 2008, mortgage giants and government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac were placed into federal conservatorship in the wake of the housing market crash and global financial crisis. 

“More than a decade later, neither the GSEs, the Federal Housing Finance Administration (FHFA), nor Congress have offered any viable plans to unwind these entities and release them from taxpayer-backed financial foster care. 
“More alarmingly, there are no indications that, should Congress manage to create a path to release them from conservatorship, Fannie and Freddie will be constrained to their original mission of secondary mortgage market securitization.  In fact, their activities over the past decade indicate that they will continue to overspend, overreach, and overlap into the private sector, as they did before the 2008 meltdown.
“FHFA is the GSEs’ regulator, but it has failed to act as the taxpayer watchdog Congress intended.  FHFA Inspector General (IG) Laura Wertheimer testified at an April 12, 2018 House Financial Services Committee hearing that nearly $193.5 billion has been invested into Fannie and Freddie from the pockets of taxpayers.  Rather than ensuring that the GSEs' “reduce taxpayer risk,”

“Fannie and Freddie required another $4 billion infusion of taxpayer money in February 2018, and could need a bailout of up to $100 billion in the future.

“Despite prior and potential future bailouts, Fannie and Freddie continue to spend recklessly.  For example, the build-out costs for Fannie Mae’s new headquarters, according to a September 28, 2017 FHFA Office of the Inspector General (OIG) report, rose by 49 percent, from $115 million in January 2015 to $171 million in March 2016.  Fannie Mae’s excessive purchases included a $250,000 chandelier, $1.2 million for decorative wood ceilings, $2 million for a third glass bridge spanning between the organizations two towers, and a $4.1 million cafeteria, lavish appointments for an entity that is currently under federal control; i.e., the American taxpayers.

“Beyond the GSEs’ wasteful spending, they continue to blur the lines as to whether they are government entities or private sector operations.  On May 7, 2018, Bloomberg reported that Freddie Mac has been extending lines of credit to nonbank mortgage servicers.  Very few details have been provided on exactly what Freddie Mac is planning to do, and whether it will use its privileged status to create an uneven playing field with private businesses.

Fannie Mae is also under increased scrutiny for edging past FHFA’s lobbying ban, according to Bloomberg, which reported that Fannie has been “quietly meeting with people inside and outside President Donald Trump’s administration.” 

“Fannie denies that its executives are actively lobbying, claiming that they are only presenting “factual information on policy proposals” in meetings with government officials.   Pouring money into lobbying was a hallmark of the GSEs’ business model before 2008. 

It should come as no surprise that there are indications that they may be following that freewheeling model again, even under conservatorship…”

Let see who among my blog readers can identify and communicate with the CAGW  all of the exaggerations, magnification, embellishments, and falsehoods in this column/blog which Hill staffers and elected officials read/swallow with few challenges.

Here’s a brief Maloni starter list of CAGW blog errors/shortcomings.

-- Since 2008 and far more recently, there have about a dozen serious legislative plans to alter, reform, or restructure, as well as erase the GSEs, coming from the Hill (See products Senators Corker, Warner, Crapo, et al), not to mention House Banking Committee Chairman Jeb Hensarling. In addition the Urban Institute and AEI have authored other plans, as has the Milken Institute, with the most thoughtful bunch being the “Moellis plan.”

-- Treasury may have “given” the GSEs $193.5 Billion (whether it was needed or not, a fact currently being challenged in federal court), but the authors forgot to note F&F repaid the original 2008 $187.5 Billion given them. And have shipped an additional @$275 Billion—and still growing each business quarter—to Treasury, because their debt, in Treasury’s 2012 reshaping of GSE debt service, never gets extinguished. (To anyone who can do math, that means Fannie and Freddie have sent @$460 Billion or so to the Treasury, since about 2012, after receiving about 40% of that number in 2008 aid.)

-- The CAGW bloggers fail to explain thoughtfully that the February, 2018 “$4 Billion” was a temporary, onetime event, the result not of a GSE business failure or slow down, but of temporary tax changes made in the Trump tax reform bill—which affected Deferred Tax Accounts (DTAs, previously applied GSE tax deductions) but now are self-correcting, since the GSEs corporate tax rate will be much lower going forward with those needs extinguished.

-- Tax payer risk” has significantly been reduced for the GSEs since—at the request of banks and others--Treasury forced F&F out of the once profitable portfolio business, where they faced interest rate risk on $1.65 Trillion of mortgage loans portfolio. Mandatory reductions, still ongoing, have shrunk those portfolio numbers down dramatically to $452 Billion.

--The GSEs are prohibited by law from lobbying or advocating for their mission or business activities, which is why nobody is responding to this phony CAGW “dog whistle.”

But, this lobbying prohibition rule might be a good proposal and the CAGW and CCAGW should advocate its application to the nation’s largest banks and financial institutions, where some real waste could be saved.

Once again, until he sticks his tiny hands in the GSE business, I am avoiding commentary about our egomaniacal and destruction, history-fogged President, who is rumored to be considering pardoning Sirhan Sirhan, Lee Harvey Oswald, the Lindbergh baby killers, Charles Manson, John Wilkes Booth, and any Neo-Nazis charged at Charlottesville.



President Trump observations from others

I thought Jake Tapper’s discussion of the POTUS decision to disinvite the Philadelphia Eagles form the traditional NFL-WH visit—when no members of the Eagles in their championship year, last season ever knelt when our national anthem was played (read that line again!!)—deserves sharing.




As was this New York Times story of the President’s lawyers admitting the POTUS did draft part of the infamous DTJ Jr. statement--discussing his son’s June 2016 Trump Tower meeting with Russian representatives--after his personal lawyers and Sarah Sanders vehemently denied same.


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Topping my list of Trump commentaries is Alexandra Petri’s hilarious column—Saturday, 6-9 Washington Post--about President Trump’s week.


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G-7

After thoroughly reading through the flotsam and jetsam reporting of the G-7 meeting and the US President’s disrespect (not to mention his “Putin embrace,” again), I only can encourage everyone who has a grievance with Trump’s actions, ethics, attitude, persona, behavior personnel choices, and policies, to vote against every congressional candidate in November who claims to support DJT or who claims he/she is “more Trump than Trump.”

It’s one way to end this nightmare!

(I hope the Canadian-born Washington Caps hockey players boycott the WH Stanley Cup celebration as their one Canadian born Black teammate, Devante Smith-Pelly, already announced.)

Congratulations to Doug Bibby and my other long suffering Caps-fan friends. As a Penguins fan, having been to that NHL pinnacle five times, I know how good you feel. Enjoy it all! You and your team earned it!


Maloni, 6-10-2018










3 comments:

Bill Maloni said...

One thing I left out of the blog--and shame on me after failing to close a loop with plaintiff, Gary Hindes--was this reference to and discussion of the Hines-Jacobs GSE Delaware
lawsuit, which "ruleoflawguy" raised and included in Tim Howard's blog.

It's very much worth reading, if you missed ROLG's comment and Tim's blog response.

https://www.dropbox.com/s/b8b4p333o0hmmru/Document.pdf?dl=0

G. Buckman said...

Bill, glad to see you back at it after some will spent time with family. Sic 'em! Would love to hear your thoughts on the FHFA's proposed rule on capital for FnF released today. It's a step in the right direction, I guess.

You didn't go swimming in the fountains with Ovie did you? :-)

Bill Maloni said...

No, but as a Pen's fan, I did pee in them!!

The fact that the RBC rules have no implmentation date bothers me, but I need to know more (which I'll get) before answering, substantively, nay or yay.

In the meantime, if you need a quick GSE fix, I expect Tim H. will be asked and will answer.