Skip to comments.True Cost of Fannie, Freddie Bailouts: $317 Billion, CBO Says
Posted on 06/06/2011 8:13:48 AM PDT by CNSNews
(CNSNews.com) The Congressional Budget Office (CBO) says the real cost of the federal government guaranteeing the business of failed mortgage giants Fannie Mae and Freddie Mac is $317 billion -- not the $130 billion normally claimed by the Obama administration.
In a report delivered to the House Budget Committee on June 2, the CBO said a fair value accounting of guaranteeing the two defunct mortgage companies known as Government Sponsored Enterprises (GSEs) was more than twice as high as the Office of Management and Budget had accounted for.
Specifically, CBO treats the mortgages guaranteed each year by the two GSEs as new guarantee obligations of the federal government, the CBO report said. For those guarantees, CBOs projections of budget outlays equal the estimated federal subsidies inherent in the commitments at the time they are made.
(Excerpt) Read more at cnsnews.com ...
U.S. Move to Cover Fannie, Freddie Losses Stirs Controversy
Dec 28, 2009
By JAMES R. HAGERTY and JESSICA HOLZER
The Obama administrations decision to cover an unlimited amount of losses at the mortgage-finance giants Fannie Mae and Freddie Mac over the next three years stirred controversy over the holiday.
The Treasury announced Thursday it was removing the caps that limited the amount of available capital to the companies to $200 billion each.
Um, not a numbers junkie, but I believe that’s more than we spent on Medicaid, a bit under what we spent on Medicare in 2010.
Bet it is much more
Lies lies lies....this administration is so predictable. Tell the lie because they know it will pass as word. When the true numbers come out, it’s quietly swept under the rug.
I hope this will be a talking point for our Republican nominees come debate time.
Instead of jail, Franklin Raines cooked the books so he and his staff could get huge bonuses making the crisis much worse.
The statute of limitations is only 5 years and Issa and others don’t seem to be investigating the obvious. Crony capitalism at it’s best.... look at GE. No expense was spared investigating Madoff and Enron but GSE’s are off limit despite the exposure to taxpayers.
The difference went into Hussein’s pocket.
REFERENCE---BY MICHELLE MALKIN Fannie Mae serves as an industrial-sized patronage factory -- sharing profits with political allies, spreading taxpayer funds to voting blocs----like ethnic groups-----and doling out jobs to left-wing academics, Washington has-beens and back-scratching buddies. Obama insider Fannie Mae exec Jim Johnson got sweetheart loans from shady subprime Countrywide. Pols raked in six-figure salaries as F/F engaged in Enron-style accounting, plunged into debt and helped usher in the subprime housing meltdown through cockamamie lending practices.
Bill Clinton appointed Franklin Raines, Daley and Rahm Emanuel just as the quasi-governmental F/M engaged in rampant book-cooking so that F/M insider could help themselves to massive bonuses. The Chi/Tribune exposed how Emanuel's "profitable stint" was low-show w/ no woek involved. Emanuel was not even assigned to committees, according to company proxy statements.
Immediately upon joining the board, Emanuel and other insiders qualified for $380,000 in stock and options plus a $20,000 annual fee, public records indicate. W/ Wall Street Emanuel there, accounting tricks were used to mislead shareholders about outsize profits F/M reaped from risky investments. The goal was to cook the books to keep fraudulent earnings on the books, to make Freddie Mac look profitable on paper-----AND to fraudulently obtain humongous annual bonuses for political insiders.
Ex-Fannie CEO and parasite Franklin is a parasitic crook of the first order. This thief Raines cooked the FM books precipitating losses of $9BILLION (that we know of) for the single purpose of creating $50 million fraudulent bonuses for himself (and millions for other F/M insiders). The SEC said Raines broke accounting rules by playing with risky derivatives. Read on.
The US Government filed suit against Franklin Raines when the depth of the F/M accounting scandal became clear. READ IT HERE http://housingdoom.com/2006/12/18/fannie-charges/
The Government noted, "The 101 charges reveal how the individuals improperly manipulated earnings to maximize their bonuses, while knowingly neglecting accounting systems and internal controls, misapplying over twenty accounting principles and misleading the regulator and the public.....explains how they submitted six years of misleading and inaccurate accounting statements and inaccurate capital reports that enabled them to grow Fannie Mae in an unsafe and unsound manner."
These charges were made in 2006. The Court ordered Raines to return $50 Million Dollars he received in bonuses based on the misstated Fannie Mae profits. (Soon going to trial.)
Freddie and Fannie, the two big quasi-govt mortgage banks that HAVE ALREADY RECEIVED HUGE federal bailouts, had huge lobbying budgets that they used for political contributions to keep regulators off their backs.
So which politicians get Fannie and Freddie political contributions.
The top three U.S. Senators getting big Fannie and Freddie political bucks were Democrats and number two was then-Senator Barack Obama who had only been in the Senate four years but still managed to grab the number two spot ahead of John Kerry, decades in the senate, and Chris Dodd then-chairman of the powerful Senate Banking Committee.
Fannie and Freddie were creations of the Congressional Democrats and the Clinton White House, designed to make mortgages available to more people, and as it turned out, some many many who couldnt afford them.
Fannie and Freddie have also been places for big Washington democrats to go to work in the semi-private sector and pocket millions.
The Clinton Administrations White House budget director Franklin Raines was appointed by Clinton to run Fannie........ and collected $50 million dollars. Jamie Gurilli Gorelick (now BP's attorney), a Clinton Justice Apartment Official, worked for Fannie and took home $26 million dollars in mfg bonuses.
Big Democrat Jim Johnson, recently on Obamas VP search committee hauled in millions from his Fannie Mae CEO job. Now remember, Obamas ads and stump speeches attacked McCain and Republican policies for the financial turmoil. It is demonstrably not Republican policy and worse, it appears the man attacking McCain, Senator Obama, was at the head of the line when the piggys lined up at the Fannie and Freddie trough for campaign bucks...." - FoxNews, Sept. 2008
The Office of Federal Housing Enterprise Oversights report goes on to say that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives.
PARASITE RAINES Franklin Raines, Fannie Maes former chief executive officer, OFHEOs report shows that over half of Mr. Raines compensation for the 6 years through 2003 was directly tied to meeting earnings targets.
The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac.The OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulators examination of the companys accounting problems. This report comes some weeks after Freddie Mac paid a record $3.8 million fine in a settlement with the Federal Election Commission and restated lobbying disclosure reports from 2004 to 2005. These are entities that have demonstrated over and over again that they are deeply in need of reform."
Franklin Raines, left, Clinton's appointee to F/M, looted and pillaged Fannie Mae. Raines famously bought into the climate control scam w/ F/M funds. Then hooked up with Ohaha's Chicago mob who organized the Chicago Climate Exchange (now defunct).
REFERENCE Ex-Fannie CEO Franklin Raines should be behind bars for life. He is a crook of the first order. This thief Raines cooked the FM books precipitating losses of $9B (that we know of) for the single purpose of creating bonuses for himself and other F/M insiders. The SEC said Raines broke accounting rules by playing with risky derivatives.
RAINES COOKS THE F/M BOOKS---WALKS AWAY A MULTI-MILLIONAIRE After Raines was fired and exposed as a fraudster for cooking the govt books, Raines walked away w/ $90 million dollars, a $26 million parachute,
PLUS..... Raines gets a MONTHLY pension of $116,300 for life. Raines had already collected $4.87 million in special performance shares. Raines owns options giving him $5.8 million in net profit after redemptions, plus another $8.7 million in deferred compensation for six years at the F/M helm.
Raines keeps $5 million of paid-up life insurance. He and his spouse get free medical and dental benefits for life, worth over $1 million. Raines earned $20 million in salary, bonuses and stock awards (that we know of) in one year.
After he was fired, Raines told the F/M board that he's entitled to get paychecks until June 22 giving him another $600,000, which triggers a $2,000 monthly raise in his lifetime pension. He also said he's entitled to disputed options with a gross value of about $5.6 million. To keep Raines happy within philanthropic circles, Fannie Mae will match Raines' charitable contributions by $10,000 a year.
December 23, 2009
Attorney General of the United States of America
U.S. Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Attorney General Holder:
We write to demand an immediate investigation into the activities of (then-) White House Chief of Staff Rahm Emanuel. We believe there is an abundant public record which establishes that the actions of the Obama White House have blocked any investigation into his activities while on the board of Freddie Mac from 2000-2001, and facilitated the cover up of potential malfeasance until the 10-year statute of limitations has run out.
The purpose of this letter is to connect the dots to establish both the conduct of Mr. Emanuel and those working with him to thwart inquiry, and to support your acting speedily so that the statute of limitations does not run out before the Justice Department is able to empanel a grand jury.
The New York Times reports that the Obama administration is negotiating to double the commitments to Fannie and Freddie for a total of $800 billion by December 31, in order to avoid the congressional approval that would be needed after that date. But there currently is no Inspector General exercising independent oversight of these entities. Acting Inspector General Ed Kelly was stripped of his authority earlier this year by the Justice Department, relying on a loophole in a bill Mr. Emanuel cosponsored and pushed through Congress shortly before he left for the Obama White House. This effectively ended Mr. Kellys investigation into what happened at Fannie and Freddie.
Since that time, despite multiple warnings by Congress that having no independent Inspector General for a federal agency that oversees $6 trillion in mortgages is a serious oversight, the Obama White House has not appointed one.
We recognize that these are extremely serious accusations, but the stonewalling by Mr. Emanuel and the Obama White House has left us with no other redress. A 2003 report by Freddie Macs regulator indicated that Freddie Mac executives had informed the board of their intention to misstate the earnings to insure their own bonuses during the time Mr. Emanuel was a director (as an appointee of the Clinton administration). But the Obama White House refused to comply with a Freedom of Information Act request from the Chicago Tribune for those board minutes on the grounds that Freddie Mac was a commercial entity, even though it was wholly owned by the government at the time the request was made.
If the Treasury approves the $800 billion commitment to Fannie and Freddie by the end of the year, it will mean that under the influence of Rahm Emanuel, the Obama White House is moving a trillion-dollar slush fund into corruption-riddled companies with no oversight in place. This will allow Fannie and Freddie to continue to purchase more toxic assets from banks, acting as a back-door increase of the TARP without congressional approval.
Before the Obama White House commits any more money to Fannie and Freddie, we call on the Public Integrity Section in the Justice Department to begin an investigation into the cause of Fannie and Freddies conservatorship, into Rahm Emanuels activities on the board of Freddie Mac (as a Clinton appointee) including any violations of his fiduciary duties to shareholders, into the decision-making behind the continued vacancy of Fannie and Freddies Inspector General post, and into potential public corruption by Rahm Emanuel in connection with his time in Congress, in the Obama White House, and on the board of Freddie Mac.
We also call for the immediate appointment of an Inspector General with a complete remit to go after this information.
Signers of this letter come from differing political ideologies. One, the conservative head of a transparency foundation, the other, publisher of a liberal political blog. But we make common cause today out of grave concern for the future of our country in the wake of corruption-riddled bailouts.
These bailouts continue to rob Main Street to benefit Wall Street, and, because of that, we together demand the resignation of Mr. Emanuel, a man who has steadfastly worked to obstruct both oversight and inquiry into the matter. Rahm Emanuels conflicts of interest render him far too compromised to serve as gatekeeper to the President of the United States. We will lay out the details further below, and are available at your earliest convenience to meet with you directly.