Rodney5 01/11/24 2:25 PM Post #781665 on Fannie Mae-No Politics (FNMA) Straight from the Treasury Secretary’s mouth and the Federal Reserve Board with no reservations plainly stating the companies would be used to help prop up the housing market.
Paulson said it best himself, when he told the Financial Crisis Inquiry Commission, “[Fannie and Freddie], more than anyone, were the engine we needed to get through the problem.” Treasury needed Fannie and Freddie to help keep the financial system afloat, and it simply took them, under pretense of a rescue. (nationalized)
The Federal Reserve’s program purchased MBS issued by the GSEs. The Treasury / Federal Reserve freely admitted the GSE's were used to help prop up the housing market.
It’s been argued the GSEs did not purchase toxic securities, (worded toxic or not), will not void the fact the GSEs were used to funnel purchases made by the companies to the fed.
Evidence From Board of Governors of the Federal Reserve System 95th Annual Report 2008
Quote: "since the November 25 announcement of the Federal Reserve’s program to purchase MBS issued by the housing GSEs and Ginnie Mae, and they currently stand at 5 percent." End of Quote page 19
Quote: "It's a big event that the Federal Reserve is offering to buy up nearly 10% of the agency mortgage market," said Art Frank, a mortgage strategist with Deutsche Bank Tuesday morning, the Federal Reserve announced that it would buy up to $500 billion of mortgage bonds guaranteed by Fannie, Freddie and Ginnie Mae, providing the ultimate support to prop up the $4.8 trillion market of these securities. The central bank also will buy $100 billion of the mortgage finance companies' debt securities, including that of the Federal Home Loan Bank, through reverse auctions starting next week. So far, other initiatives to prop up the market including a plan to have both the government-sponsored enterprises buy nearly $200 billion of these bonds and the U.S. Treasury's unlimited purchase of these bonds have done little to stop the weakening of risk premiums on mortgage bonds. As a result, mortgage rates have remained at elevated levels with little relief to consumers." End of Quote
I'll probably get a lot of flack for saying the following: IMO, if forbearance was used in 2008, like Calabria did in 2020 during Covid, the meltdown wouldn't have been as bad as it actually was. There would probably have been no need for the conservatorship and the need to buy all the bad loans held by TBTF banks.
In 2024, with over $4.3 trillion in assets, Fannie Mae is the largest company in the United States and the fifth largest company in the world, by assets.[5][6] Fannie Mae was ranked number 27 on the Fortune 500rankings of the largest United States corporations by total revenue and was ranked number 58 on the Fortune Global 500 rankings of the largest global corporations by total revenue.[5][6] In terms of profit, Fannie Mae is the 15th most profitable company in the United States and the 33rd most profitable in the world.[5][6]
Exactly ! And you laid the blame where it belongs... not on the poor guy that was just trying to put a roof over his poor family's heads. With the exotic financing, CDO's and all the other schemes these crooks devised to get payback on the GSE's by saddling them with all their bad debts and hoping that they would collapse under the weight of insolvency.
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