Today’s hearing confirmed my belief that many members of Congress lack even a basic understanding of our situation. This is a very complex issue in which they rely largely on talking points provided by their leadership. This makes for some rather awkward and uninformed exchanges leaving anyone with extensive knowledge scratching their heads in disbelief. It was evident that many of the reps need to brush up on some basic key facts and I would suggest they stick around for the entire hearing next time rather than popping in for their 5 minutes of fame.
Due to this confusion we saw many Republicans help to reveal some critical truths today.This was evident was when Republicans questioned Mel as to whether the PSPAs trump HERA. The real benefit of these exchanges will come to light as more people become familiar with the work be done by Mark Calabria and Michael Krimminger. They were both very involved in the crafting of HERA, and they join Rep. Waters is stating that the intent of HERA was never to “wind down” Fannie and Freddie.I have a preliminary copy of the paper and can say that it will be a very powerful tool in unwinding the web we find ourselves in.
In a surprising twist we saw Republican Rep. Steven Pearce from New Mexico state that Fannie and Freddie would be exiting conservatorship. In a more shocking twist he stated his concerns that they must be cautious and not let private capital once again fraudulently dump toxic mortgages on the GSEs.It would have been nice to see the expressions on everyone else at the hearing when he expressed this.You can be sure he will be getting a visit tomorrow.Rep. Pearce confirmed as did much of the testimony today that both Democrats and Republicans are keenly aware that GSE wind down is not possible but reforms are and are being made accordingly and continuing.
Republican Rep. Poliquin from Maine very eloquently expressed his grave concerns that Fannie and Freddie remain grossly undercapitalized.Rep. Poliquin has been on the job for less than a month and has clearly not been tainted by the partisanship that taints many of the others ability to reason.He spent his entire time making a powerful case that to leave the GSEs undercapitalized is the height of fiscal irresponsibility.
I want to thank all of those Republicans who were willing to set aside their ideological disdain for the GSE model and share so openly and honestly concerning the dire threat posed by leaving Fannie and Freddie undercapitalized due to the third amendment sweep. Although they could not defy their leadership completely and call for an end to the Sweep, I hope Mel and the Administration are wise enough to fill in the blanks. Overall it was clear that cracks are appearing within the Republican party concerning the GSE issue, though most held firm to the party line others did not.
Democrats on the other hand had much tighter control over their caucus, listening to much of their testimony you would almost forget that the GSEs are even in conservatorship. They were obviously coached not to bring up any of the contentious issues: Sweep, conservatorship, release etcetera.They obviously are comfortable as we are that things are largely going their way. Rep. Waters joined the growing chorus of Democrats when she stated “With Fannie Mae and Freddie Mac now having paid the government $225 billion dollars – which is $38 billion dollars more than the Treasury invested during the crisis – I think it’s fair to say that our actions to prevent a total collapse of our housing market has been a resounding success.”
It was great to see Democratic Rep. Moore of Wisconsin introduce the paper that we shared here recently. https://timhoward717.files.wordpress.com/2015/01/changes-in-buyer-composition-and-the-expansion-of-credit-during-the-boom-2.pdf This smashes the myth that mandates designed to ensure equal access to Americas mortgage market caused the financial crisis.
This played a critical role in combatting the delusionally false narrative that you will find being pushed by Republican Jeb Hensarling on the House financial services http://financialservices.house.gov/blog/?postid=343018
“Hardworking taxpayers should never forget: The nearly $200 billion bailout of Fannie Mae and Freddie Mac is the biggest, costliest taxpayer-funded bailout in history.” You see now where Rep. Royce is getting his information from.I also hope the Democrats are paying close attention to the false narrative found on this page, as it is clear who they intent to blame the financial crisis on in 2016,
Throughout much their testimony today again and again we saw many Republican’s engaging in a Peter Wallison like carnival of lies concerning the role Fannie and Freddie played in the crisis. Our friend Rep. Royce continued to exhibit a profound detachment from reality while again stating that the GSEs have not paid back the taxpayers.
As I have stated all along our goal is to ensure that the truth is not lost in this great debate. We are not for or against one party or the other we are for those who speak the truth, and we are against those who do not, it is that simple. We also expect each party, not to compromise their core values. The only reason our government has been able to abuse their authority is because no one was effectively able to communicate the truth regarding this entire issue.
We are at a critical junction and will be having a conference call on Saturday morning to update everyone as to our current status. We will be organizing our campaign more tightly as well. We welcome anyone to email us concerning any questions or concerns you may have, and we will attempt to address as many as possible. Keep the Faith