Reform Nearly Complete
Yet another one of our biggest foes made a remarkable shift this week at the Ginnie Mae summit. None other than Obama adviser Mark Zandi declared that the reforms that President Obama had hoped Congress would enact have indeed been accomplished right within the GSEs.
This news was initially revealed by Janis Smith Monday when she tweeted this from the Ginnie Mae summit:
She then confirmed to me:
National Mortgage News followed late Tuesday with even more insight reporting that Zandi stated: The Federal Housing Finance Agency is “effectively moving the GSEs in the direction Johnson-Crapo would have taken,” especially in terms of risk-sharing deals and bringing private capital into the mortgage market. “This was a better approach than the legislation,” because the GSEs were allowed to let the “process unfold and experiment” with different risk-sharing structures. “They have done a surprisingly good job on that front,”
And my favorite quote of all: “The ship has left the port and it would be pretty hard to turn it around,”.
The significance cannot be overstated, as I pointed out on September ninth Mark was one of the most influential people pushing for the wind down of the GSEs.I want to commend him for acknowledging that the wind down of the GSEs is no longer a legitimate option. I also want to assure him that his new more genuine and rational stance will pay dividends in assuring that he remain a trusted bi-partisan economic voice on major financial issues.
I along with some of our other key allies have been pointing out for quite some time that due to the massive reforms put in place by Director Watt the Fannie and Freddie of 2007 no longer exist today. The NBBC pointed out on July 6th:
“The NBCC respectfully submits that liquidation of Fannie Mae and Freddie Mac is neither necessary nor appropriate under the circumstances. A flurry of legislative and regulatory activity—including HERA—were undertaken to course-correct and deal with the problems that originally led to the subprime mortgage crisis. Those efforts have been successful. The conditions that led to the crisis no longer exist. HERA, in particular, was designed to restore confidence in Fannie and Freddie by strengthening regulations and recapitalizing the companies. And it has worked. Fannie and Freddie have returned to long-term financial stability—but for the Net Worth Sweep challenged in this appeal, they would be posting substantial profits. There is, quite simply, no sound justification for the attempted liquidation.”
Miracle In The House?
The reason for the sudden shifts taking place is the fact that it has been privately acknowledged that there was a shift within the administration on GSE reform. This shift coincided with a largely off the radar push to identify common ground on housing finance. As we know, Rep. Mulvaney has been working very hard along with Rep. Ellison to formulate a common ground bill in the House that would allow the GSEs to recapitalize and be released.I know both Mulvaney and Ellison are sincere, and I hope Rep. Hensarling is as open to this as has been claimed.I hope Mulvaney has convinced him that unless they become reasonable on this they will not have a seat at the table and lose any chance they hoped to have at influencing the final outcome. For as Zandi said the ship has already left the port and with them or without them the days of wind down are over. It is also important to note that even if a common ground bill does emerge it will stand no chance of passing Congress. The importance of it will be that it gives both sides a chance to present what is most important to them in an ultimate resolution of Fannie and Freddie. With that said I would also like to say that in my view the departure of Speaker Boehner should be largely a neutral for us.I doubt the progress I spoke about will be influenced either way by a new Speaker.
Betrayal By Senator Grassley Noted
Grassley’s feigned interest in #FannieGate has not been overlooked. “He should remember who helped craft the letters going forward.” I understand that it is not uncommon in DC for Senators to use people and toss them aside on a whim, but Mr. Grassley should understand that for every action there is a reaction. I would suggest that if he decides to re-emerge from his coma on the GSE issue in the future he should be prepared to be entirely transparent.It is clear now that he used the truth as a simple marker to give the appearance that he was truly concerned about this. I share this because we know now that he was never sincere, and I hope to avert any attempts he or others may make to derail a common ground solution.
“Fannie Mae could have survived the financial crisis of 2007-2008 without the intervention of the Treasury.”
Forensic accounting professor Dr. G. Stevenson Smith, Ph.D., CPA, CMA has joined Professor Crumbley in validating the groundbreaking forensic accounting and concluded:
Fannie Mae could have survived the financial crisis of 2007-2008 without the intervention of the Treasury. The financial data indicates that Fannie was a going concern at the time the conservatorship began in September 2008. The reason for the takeover was that a financial panic had gripped the financial markets, not that the entities needed any sort of financial assistance to weather the storm. In order to alleviate everyone’s fears, the government had to take high profile measures to settle the markets. The U.S. Treasury decided that one such step was to nationalize Fannie Mae.”
This caps a momentous quest and contribution to the truth by Adam Spittler CPA, MS and Mike Ciklin JD, MBA, MRE.
The entire White Paper can be found here:
Journalists Simply Unable To Match My Coverage
I have decided to lighten up on the journalists trying to cover this as it is a very complicated issue that few truly understand.Besides the fact that I have become one of the foremost experts in the debate over Fannie and Freddie, I have other unfair advantages as well.The journalists are fettered by the fact that they are constantly under the gun to “create” news, this causes them to create often, something out of nothing or to falsely over-hype random news as a plus or minus to our cause. This coupled with the fact that the media owners force their reporters to conform to their worldview makes it impossible for them to report accurately on this issue. I have also assembled a network of key players on all sides of this debate that allow me to see things from a unique perspective.The goal of this blog is to discover and share the truth about Fannie and Freddie; this freedom has placed me as the primary source of the unadulterated truth.
Keep The Faith!