In what has been quite possibly 2 of the strangest days in the GSE saga today we saw our President make this wild claim:
“And that’s why we had the Justice Department fight for buyers who were discriminated against or preyed upon, and we won a settlement that awarded more money to victims in one year than in the previous 23 years combined. (Applause.) That’s why we worked with states to force big banks to repay more than $50 billion to more than 1.5 million borrowers who had been treated wrongly — and that was the largest lending settlement in history. (Applause.) And that’s why I’ve called on Congress to wind down the government-backed companies known as Fannie Mae and Freddie Mac.” (No applause)
This statement is the American equivalent of jailing a rape victim for getting raped that we see in other countries.Besides the obvious bizarreness of this statement I also want to add that the big banks also were forced to pay billions of dollars in settlements to Fannie and Freddie for all of the toxic mortgages they fraudulently dumped on them.Whatever possessed someone, to put this line in the speech at this point, is beyond belief. The fact that the President actually read it in that context is alarming to say the least.
Why did they feel the need to include the wind down statement? Two reasons I believe, one is because of what recently transpired in Iowa recently. There we saw the government makes the claim that HERA somehow grants the conservator the rights to wind down the GSEs while they are in conservatorship. The other is to try and prove to everyone that he sincerely wants Congress to enact major housing finance reform legislation. These words ring hollow however considering the actions that have been taken since he exercised the nuclear option in the senate to get Mel Watt confirmed. We have witnessed a number of steps that moved GSE policy so far to the left that any hope of bipartisan reform has been crushed. It’s silly that he would feel the need to continue the charade at this point considering that the Republicans clearly see what is transpiring. There has been virtually no mention of GSE reform mentioned by the Republican leadership in the House or Senate. Obamas biggest fear is that Republicans realize that he used the nuclear option to force Mel into the FHFA with the intent to subvert congress and pursue a reform/release strategy of the GSEs. Once realized he knows that in the future Republican Presidents will use the same tactic to advance their right-wing agenda.Obama knows better than anyone that there is virtually no chance of housing finance legislation passing Congress; he has made sure of that.
If we could believe a word, the administration says about Fannie and Freddie this blog would not be necessary. Our primary function has been to translate the government’s lies into truth. So I find it amusing that once again everyone reacts as if what they say is gospel? Remember this is the same people who brought us the third amendment sweep. Fannie and Freddie are not going anywhere. We will be issuing “The White House Challenge” in which we will challenge the administration to state unequivocally that under no condition will they release Fannie and Freddie.Let’s end the gamesmanship. Let’s all lay our cards on the table. I guarantee I will win, time will tell who’s been holding the aces.
Josh Rosner unleashed a string of very interesting Tweets today : “Expect emails to show that ideology rather than law drove Sperling, Crapo, Stevens to support 3rd Amendment” #GSE #Fannie #Freddie”
“If the GSEs need more UST $ those who supported 3rd amendment & fought capital will be proven blinded by ideology” @PaulMuolo @DavidHStevens
That would be Gene Sperling, Senator Crapo, and Mortgage Banker Association CEO David Stevens. I am sure Judge Sweeney will be thrilled to hear that ideology trumped law in crafting the third amendment. This opens up a world of possibilities, and you better believe we will be examining every one of them.I am sure that there will be many more revelations coming as well.
We hope to roll out plans this weekend that will be sure to turn the heat up on everyone involved. I am glad we waited for the Presidents speech so we can allocate our resources accordingly. Keep the Faith!