Skip to comments.Obama Advisor Pledged $1 Trillion in Sub-Prime Loans As Fannie Mae CEO
Posted on 10/01/2008 8:19:51 AM PDT by Seattle Conservative
James A. Johnson--the man chosen by Sen. Barack Obama to lead his vice presidential search committee---served as head of the Federal National Mortgage Association, or Fannie Mae, from 1991 to 1998, receiving a reported $21 million in compensation upon his departure.
As CEO of Fannie Mae, Johnson set a goal of buying up $1 trillion in low-income mortgage loans, a move that eventually helped trigger what would become the sub-prime mortgage crisis.
Fannie Mae opposed any attempt to regulate or monitor that business. In 1992, Congress considered a proposal requiring Fannie Mae and Freddie Mac to disclose their debt to the Securities and Exchange Commission (SEC). Public disclosure of Fannies and Freddies debt would have allowed the SEC to monitor their business and ensure that these government-sponsored enterprises, which were exempt from federal taxes, and had a line of credit with the U.S. Treasury, did not overextend themselves.
Johnson opposed the proposal in a letter to House Financial Services Committee Chairman Rep. Ed Markey (D-Mass.), saying that exemption from registration requirements was embodied in our Charter and was an integral element of our capacity to provide continuous liquidity to the secondary-mortgage market. Congressional Democrats succeeded in halting the measure.
Johnson told a 1995 conference of mortgage lenders in Chicago that credit-scoring was a vehicle to do more, not an excuse to do less.
We abhor the use of credit scoring as a way to deny housing finance to those people who need help the most, Johnson said. We wont put mechanical systems and arbitrary numbers above our faith in your [local lenders] judgment and we wont go back and second guess loans youve already made
if they dont match up to a new way of assessing risks or doing business.
(Excerpt) Read more at cnsnews.com ...
Johnson further advanced his $1-trillion low-income loan initiative by expanding to more than 50 the number of partnership offices in cities across the country, and boasted in 1997 that Fannie Mae was on course to reach the $1 trillion goal by the end of the decade. At the end of Johnsons tenure as CEO in 1998, Fannie Mae had provided $500 billion in low-income mortgage financing. His successor, former Clinton budget director Franklin Raines, would provide the remaining $500 billion over the next three years.
Johnson also established the Fannie Mae Foundation, spreading millions of dollars to local governments, colleges, hospitals and social programs, such as homeless shelters.
In 2001, joined the investment banking firm Perseus LLC, and currently serves on the boards of Goldman Sachs, Target Corp., Gannett Inc., UnitedHealth Group, KB Home, the National Housing Endowment, and Temple-Inland Inc.
In 2004, Johnson re-entered politics, serving as the head of John Kerrys vice presidential selection committee. After helping the unsuccessful Kerry campaign select Sen. John Edwards as the Democratic vice presidential candidate, Johnson returned to Perseus.
He returned to politics yet again in 2008, to help yet another Democratic presidential campaign pick his running mate. He served Sen. Barack Obama as the leader of his vice presidential search effort until June, when he resigned after it was reported that he had received low-cost home loan from Countrywide Financial Corp.s CEO Angelo Mozilo.
Notice the use of “we” when Johnson addressed the bankers- “we” meaning the imputed backing of junk credit by the US taxpayer.
now if mccain doesn’t use this!
“Obama Advisor Pledged $1 Trillion in Sub-Prime Loans As Fannie Mae CEO”
Slavery Reparations - Part VII
someone will have to hold a gun to mccains head to make him read it.
yes and the amount of defaulted homes in no way match up to this. a banker told me that its just a little over 2 %. thats about 61 million. what happened to the 320 billion we ok’d earlier in the year and any assets from these failed groups. where is the money. there is something our government is not telling us. we are being held hostage by our own government.
Investigate these freeloaders!
Unfortunately, I think you’re correct. Maybe Sarah will.
I think it’s also interesting how Goldman Sachs keeps popping up (Johnson, Paulson, the guy that was the only private sector person in a meeting w the Feds the other day(sorry, don’t remember the details, IIRC they discussed it on F&F) to name a few.
Just where is the money going. No one wants to say. Now republican congressmen are threatening us with “the bill will only get worse if we hold out”. Why dont they speak up and tell the truth about what is going on?
I know the martians are holding the world hostage and they dont want to panic us. All the money is going to little green men. This is about more thant failed home loans.
major redistribution of wealth.
Improtant because Obama has tried to distance himself from Raines but will not be able to do so with Johnson. No way can he not own his associations with him.
In honor of the “Hope and Change” children (video).
I have been inspired and penned a chant.
“Fannie Mae, Freddie Mac”!
“Raines Johnson GIVE IT BACK”
Of course, such a thing would be nearly impossible to prove - or to prosecute if proven - but if such insiders got overzealous and suddenly found themselves facing a total drying up of funds due to an artificially induced depression, they might react with just the kind of hysteria Paulson & Co. displayed last week.
“major redistribution of wealth.”
AKA Racist Theft.
Very good questions!
Thought some or all of you might be interested in this.
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