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Rep. Frank questions safety of Fannie Mae, Freddie Mac investments
The Washington Post ^ | Friday, March 5, 2010; 2:41 PM | By Zachary A. Goldfarb

Posted on 03/05/2010 12:01:18 PM PST by Ernest_at_the_Beach

An influential voice on Capitol Hill has unexpectedly called into question the safety of investing in Fannie Mae and Freddie Mac, raising the specter that investors who have lent money to the two firms or bought their mortgage-backed securities could one day suffer losses.

The comments by Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, come despite the assumption of many investors that investments in the two mortgage finance giants are risk-free. Until now, federal officials -- who took over Fannie and Freddie two years ago to save them from collapse -- have signaled to the market that lending the companies money is just about as safe as lending to the U.S. government itself.

"People who own Fannie and Freddie debt are not in the same legal position as [those who own] Treasury bonds, and I don't want them to be," Frank said in an interview Thursday.

If investors believe that Fannie and Freddie carry some risk, they could demand a higher interest rate to lend them money or buy their mortgage-backed securities. This in turn could ripple across the entire U.S. housing market, prompting an increase in the mortgage rates that borrowers must pay.

Frank's remarks came in the context of a discussion about possible ways the federal government could overhaul Fannie Mae and Freddie Mac, which have together received more than $100 billion in emergency federal aid to cover their losses. He said he "absolutely" would consider requiring investors in the two companies to take some losses themselves.

In restructuring the companies, Frank said he wants "to preserve the right to give people haircuts." He added, "I don't want to preclude that."


(Excerpt) Read more at washingtonpost.com ...


TOPICS: Business/Economy; Extended News; Government; News/Current Events
KEYWORDS: 2008election; america2point0; bankingcrisis; barneyfrank; criminalconspiracy; cultureofcorruption; democratscandals; fanniemac; freddiemac; howtostealanalection; lootingtheeconomy; lyingliar; manmadedisaster; revisionisthistory; stalinisttactics

1 posted on 03/05/2010 12:01:18 PM PST by Ernest_at_the_Beach
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To: Ernest_at_the_Beach

I believe Frank crawled out from under the desk and repudiated this. Probably got a call from PIMCO


2 posted on 03/05/2010 12:03:20 PM PST by junta (S.C.U.M. = State Controlled Unreliable Media)
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To: Ernest_at_the_Beach

We just got a letter from Fannie Mae saying that they had assumed our mortgage from Wells Fargo. We just refinanced several months ago and were shocked to get this letter.


3 posted on 03/05/2010 12:04:25 PM PST by twigs
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To: Ernest_at_the_Beach
Oh Barney! You just don't want people to have afforadable housing, you racist Republican you! /sarc

September 2003

''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''

http://www.nytimes.com/2003/09/11/business/new-agency-proposed-to-oversee-freddie-mac-and-fannie-mae.html?pagewanted=1

4 posted on 03/05/2010 12:04:43 PM PST by avacado
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To: Ernest_at_the_Beach

Barney Frank questioning the safety of FANNIE? Is he changing teams?


5 posted on 03/05/2010 12:07:02 PM PST by LeonardFMason
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To: Ernest_at_the_Beach

Can this be satire? Frank knows that even to suggest anything that would FIX any aspect of the American economy is political suicide with the administration. After all, it was Frank, Dodd, et al, that started the economic collapse in motion in a big way....no, this is satire. Sick satire.


6 posted on 03/05/2010 12:07:27 PM PST by EagleUSA
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To: junta

In a rational world this piece of sh** would already be swinging by his heels from a lamp post.


7 posted on 03/05/2010 12:09:07 PM PST by Lurker (The avalanche has begun. The pebbles no longer have a vote.)
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To: twigs

Why would you be shocked? This is a very common practice.

The banks sell loans to Fannie and Freddie daily.


8 posted on 03/05/2010 12:10:32 PM PST by NOVACPA
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To: Lurker

yep


9 posted on 03/05/2010 12:12:24 PM PST by junta (S.C.U.M. = State Controlled Unreliable Media)
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To: twigs

Us too, both 800 FICO went thru a broker to Chase to Fannie


10 posted on 03/05/2010 12:13:48 PM PST by junta (S.C.U.M. = State Controlled Unreliable Media)
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To: LeonardFMason

Should be an indicted co-conspirator.


11 posted on 03/05/2010 12:13:50 PM PST by K-oneTexas (I'm not a judge and there ain't enough of me to be a jury. (Zell Miller, A National Party No More))
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To: twigs

Freddie has ours, but we didnt get a letter. I found out when, on a hunch, I went to their data base and entered our address.


12 posted on 03/05/2010 12:19:01 PM PST by freespirited (We're not the Party of No. We're the Party of HELL NO!!!)
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To: Ernest_at_the_Beach

He must have gotten jilted by his gay lover over at Fannie Mae.


13 posted on 03/05/2010 12:27:51 PM PST by Juan Medén
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To: Ernest_at_the_Beach

Wow. Next thing you know he’ll be questioning the safety of anal sex.


14 posted on 03/05/2010 12:28:02 PM PST by Tribune7 (Only stupid, racists people support Obama.)
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To: NOVACPA

We obtained our first mortgage a year ago from Wachovia and they emphasized, we did Wells Fargo several months ago, that they don’t sell their mortgages. It was a big emphasis on their part.


15 posted on 03/05/2010 12:30:26 PM PST by twigs
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To: Ernest_at_the_Beach

You and your little “friends” are the ones who regulated Fannie and Freddie, Miss Fwank!


16 posted on 03/05/2010 12:31:44 PM PST by Oldpuppymax
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To: Ernest_at_the_Beach

Unbelievable! Such a hypocrite, aren’t there youtube videos of him pounding the desk saying Fannie and Freddie were sound. Oh well, for your afternoon entertainment, one more time, Banking Queen!

http://www.youtube.com/watch?v=a5NrqqK60OI


17 posted on 03/05/2010 12:32:22 PM PST by dawn53
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To: Ernest_at_the_Beach

Did you see this AIM article?

http://www.aim.org/aim-column/whos-behind-the-financial-crisis/


18 posted on 03/05/2010 12:33:03 PM PST by FromLori (FromLori)
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To: Ernest_at_the_Beach

The “catcher” should know! He’s one of the slimeballs who has let Freddie and Fannie get in deep..AT OUR EXPENCE!


19 posted on 03/05/2010 12:36:22 PM PST by WellyP
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To: Ernest_at_the_Beach
An influential voice on Capitol Hill has unexpectedly called into question the safety of investing in Fannie Mae and Freddie Mac, raising the specter that investors who have lent money to the two firms or bought their mortgage-backed securities could one day suffer losses.

Shut your lying PIE HOLE you crook.

LETTER: Bush raised red flags about Fannie and Freddie (South Coast Today ^ | 3/14/08 | Peter D. Friedman)

Starting with the 2002 budget request in April 2001, the Bush administration raised red flags about Fannie Mae and Freddie Mac. In 2003, the White House warned that financial problems with the organizations could spread well beyond the housing sector and proposed to Congress that they create a new regulatory agency to supervise Fannie and Freddie.

On Sept. 10, 2003, Rep. Frank objected, stating, "Fannie Mae and Freddie Mac are not in a crisis"¦ The more people, in my judgment, exaggerate a threat of safety and soundness, the more people conjure up the possibility of serious financial losses to the treasury, which I do not see. I think we see entities that are fundamentally sound financially"¦ But the more pressure there is, then the less I think we will see in terms of affordable housing."


20 posted on 03/05/2010 12:39:16 PM PST by a fool in paradise
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To: junta

He took it back we are still on the hook!

Statement by Chairman Barney Frank

Washington, DC – Today, House Financial Services Committee Chairman Barney Frank (D-MA) issued the following statement:

“I have been asked some questions by members of the media and others about my noting the distinction between the legal status of Fannie Mae and Freddie Mac debt and the debt of the U.S. Treasury. Throughout the debate over Fannie and Freddie in past years, I have noted that Fannie and Freddie debt did not have the same legal standing as Treasury debt. This does not prevent the Treasury from treating the debt of Fannie and Freddie in the manner that it believes best supports the important goal of stabilizing the financial system. Specifically, I support the intention of the Treasury to stand fully behind the terms of its December 24 statement with regard to Fannie and Freddie debt. It is also the case in going forward, as we restructure housing finance, we will make sure that there are no implicit guarantees, hints, suggestions, or winks and nods. We will be explicit about what is and is not an obligation of the federal government.

“To reiterate, I continue to think that it would be a mistake for Congress to take action that formally conferred on Fannie and Freddie debt the legal status of debt issued by the Treasury. But nothing in that position prevents Treasury from acting as it thinks best with regard to its obligation to provide stability to the housing market and the financial system.”

http://www.zerohedge.com/article/barney-frank-backtracks-gse-statement-realizes-put-foot-mouth-yet-again


21 posted on 03/05/2010 12:57:07 PM PST by FromLori (FromLori)
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To: junta

This crook should be in jail.
http://www.brayincandy.com/id147.html

Pray for Freedom


22 posted on 03/05/2010 1:04:02 PM PST by bray (Throw All the Bums Out, starting with McCain)
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To: Ernest_at_the_Beach

FM was trading at 99 cents from a high of $2.99(?) last year- only way to go is up(?).


23 posted on 03/05/2010 1:18:35 PM PST by bunkerhill7 (God bless)
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To: twigs

“had assumed our mortgage from Wells Fargo”

It will most likely still be serviced by WF. I would be surprised if you don’t still send your payment to WF?


24 posted on 03/05/2010 1:20:45 PM PST by HereInTheHeartland (The End of an Error - 01/20/2013)
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To: Ernest_at_the_Beach

Gee Bwarney...ya’ think?


25 posted on 03/05/2010 1:58:47 PM PST by EBH (The warning bell of Freedom is ringing, can you not hear it?)
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To: Ernest_at_the_Beach
Rep. Frank questions safety of Fannie Mae, Freddie Mac investments

...about nine years too late.

26 posted on 03/05/2010 1:59:04 PM PST by OrangeHoof ("Barack Obama" is Swahili for "Bend over suckahs".)
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To: FromLori
From your link:

********************************EXCERPT***************************

Diamond, with 14 years of experience in the financial markets, calls his book a course in "Economic crisis 101" because of the need to inform ordinary Americans of what is happening right before their eyes.

The book is easy to read, although it deals with complex financial regulations and operations, and is only 118 pages.

The theme is that the economic crisis was deliberately engineered for profit and political gain and has already resulted in the "looting" of $11 trillion from the U.S. economy.

27 posted on 03/05/2010 2:06:58 PM PST by Ernest_at_the_Beach ( Support Geert Wilders)
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But Zubi Diamond, author of the powerful new book, Wizards of Wall Street, says the agenda of Soros and other short sellers is clear. Their purpose, he says, is "to loot America and any foreign country which invested in America. Greece was one of them. Iceland was ravaged and annihilated."
28 posted on 03/05/2010 2:08:44 PM PST by Ernest_at_the_Beach ( Support Geert Wilders)
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To: Ernest_at_the_Beach
Franks is about 4 years too late. What about Frank's boyfriend who walked off with a multi million dollar bonus of "investor" funds? Done while they were fraudulently rating affirmative action sub prime mortgages as low risk on tne secondary mortgage markets?

FEANKS SHOULD BE INVESTIGATED AND THEN TRIED. HE IS A CRIMINAL.

29 posted on 03/05/2010 3:45:46 PM PST by Candor7 (Now's the time to ante up against the Obama Fascist Junta ( member NRA))
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