What Fannie and Freddie Knew (They were at the VERY HEART of the housing bubble)

Democrats have spent years arguing that private lenders created the housing boom and bust, and that Fannie Mae and Freddie Mac merely came along for the ride. This was always a politically convenient fiction, and now thanks to the unlikely source of the Securities and Exchange Commission we have a trail of evidence showing how the failed mortgage giants turbocharged the crisis.

That's the story revealed Friday by the SEC's civil lawsuits against six former Fannie and Freddie executives, including a pair of CEOs. The SEC says the companies defrauded investors because they "knew and approved of misleading statements" about Fan and Fred's exposure to subprime loans, and it chronicles their push to expand the business.

The executives deny the charges, and we hope they don't settle. The case deserves to play out in court, so Americans can see in detail how Fan and Fred were central to the bubble. The lawsuits themselves, combined with information admitted as true by Fan and Fred in civil nonprosecution agreements with the SEC, are certainly illuminating.

The Beltway story of the crisis claims that Congress's affordable housing mandates had nothing to do with it. But the SEC's lawsuit shows that Fannie degraded its underwriting standards to increase its market share in subprime loans. According to the SEC suit, for instance, in 2006 Fannie Mae adjusted its widely used automated underwriting system, "Desktop Underwriter." Fannie did so as part of its "Say Yes" strategy to "provide more 'approve' messages . . . for larger volumes of loans with lower FICO [credit] scores and higher LTVs [loan-to-value] than previously permitted."

>>did not know what a GSE (government sponsored entity) or a MBS (mortgage backed security) was.

Unlike the knowledgeable friends of Comrade Chairman Obama...

" Uhhhh, that's not ours either! "

---Weiner, Obama, Perry, Pelosi, Frank, Pritzker and Associates, LLLP.

Follow the....

http://www.campaignmoney.com/finance.asp?type=in&cycle=08&criteria=pritzker&fname=penny

Billionaire business mogul Penny Pritzker is a member of one of America’s richest families and was the Finance Chair for the presidential campaign of Barack Obama. It was Pritzker that led the prolific, and illegal, fundraising that helped power Barack Obama’s presidential campaign. She was the chair of Chicago-based Superior Bank’s board for five years.

Pritzker was into subprime lending before it became all the rage starting in around 2000. Prtizker's chairmanship was to concentrate on sub prime lending, principally on home mortgages, but for a while in subprime auto lending, too, after the Pritzkers' bank acquired its wholesale mortgage organization division, Alliance Funding, in December 1992.

Back then they called it "predatory lending."

Superior Bank went belly up in 2001 with over $1 billion in insured and uninsured deposits; 1,406 depositors lost much of their life savings. This collapse came amid harsh criticism of how Superior’s owners promoted sub-prime home mortgages.

On Nov. 1 [2002] the Federal Deposit Insurance Corp. pointed the finger at Ernst & Young, Superior’s auditor, in a fraud suit filed in federal court here. But that action came two months after a group of Superior depositors accused the bank’s owners and directors, including two members of the Pritzker family, of racketeering....

[snip]

...Pritzker is chairman of Classic Residence by Hyatt, luxury senior living communities in 11 states; chairman of The Parking Spot, which owns and operates off-airport parking facilities in nine cities; chairman of the credit data company TransUnion and chairman of Pritzker Realty. She also sits on the board of Global Hyatt and plays a role in numerous non-profit groups, including serving as chairman of the Olympic village portion of Chicago’s bid to win the 2016 Summer Games.

http://www.theobamafile.com/_associates/PennyPritzker.htm

Nudge nudge nudge...

Odd how the "Occupy" Useful Idiots seem to be totally clueless about Pritzker's perch upon the apex... of the "one percent" they continuously bleat about.

And the "Fithcally Conthervative" RINOs too for that matter... narry a peep about Pritkzer from them either.

Observe what we didn't hear in September/October 2008:

"I'm glad my opponent brought up the economy. Mr. Obama, isn't Penny Pritzker your National Finance Chairwoman -- and didn't her Chicago Family-owned Superior bank FAIL in 2001 from doing subprime loans for ACORN?"

Game set match, hello President McWeevil / VP Palin.

But nooo, not a peep.

FAIL. BOHICA.

The press won’t touch this except to turn the blame on the first repub they can.

Starting with Bill clinton, barney frank and Chris dodd at the leadership positions of all this mess and all the other good soviet dimrats who protected these entities.

Chris Dodd retired.
Bwarnee Fwank retiring.

Add to that holder will not open a case against any of them.

And they threw the book at madoff.

Kangaroo courtery at work.

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