To: Enchante; kcvl; mabelkitty; Grampa Dave; backhoe
A couple links touching on Gorelick's Fannie Mae connection--pinging a few folks who've posted on this on other threads and may have more info/insight:
9-11 Commission Testimony Too Hot To Be Under Oath
Gorelick is closely linked to the intelligence community, currently serving on the Central Intelligence Agencys (CIA) National Security Advisory Panel, as well as President Bushs Review of Intelligence -- affording the current Fannie Mae vice-chairman access to the inner-workings of the CIA while providing the Agency with an ally on the Commission.
FReeper Research: GORELICK WORKED WITH RICHARD CLARKE! (HHS website transcript), Post 76
Freddie Mac and Fannie Mae: Corporate Welfare King & Queen
by Vern McKinley
McKinley has worked as a financial analyst and attorney in Washington, D.C. This article is based on a policy analysis published by the Cato Institute.
They are two of the largest financial institutions in the nation, with more than half a trillion dollars in assets between them: Freddie Mac and Fannie Mae. But few people can explain exactly what function those financial giants serve.
Freddie Mac and Fannie Mae indirectly assist homebuyers by purchasing mortgages from lenders, such as commercial banks, savings and loans and mortgage banks. Freddie and Fannie, in turn, generally get those loans off their books by creating securities that are eventually paid off as the underlying mortgages are paid off. Homeowners are happy because they are aided in borrowing money for a home. Lenders are happy because they don't have to hold mortgages for several years. Investors in the securities are happy because they have a reliable investment, and Freddie Mac and Fannie Mae are happy because they make a handsome profit. Sound like capitalism at its finest? Not exactly.
Although Freddie and Fannie are privately owned, they are what is known as government-sponsored enterprises (GSEs). GSEs don't have to follow all the rules that true privately owned companies do: they don't have to register their securities with the government, their securities receive special treatment for investment purposes, they don't have to pay state and local income taxes and--most important--their government sponsorship gives them the aura of a fully guaranteed government entity. That final benefit means they save billions in borrowing costs, just as lenders are willing to offer low-interest student loans that are guaranteed by the government. That savings alone allows the GSEs to pocket about $2 billion per year, according to estimates by the Congressional Budget Office and the Treasury Department.
Allowing Congress to grant such special privileges is a bad idea. Those privileges, which are granted solely to Freddie and Fannie, crowd out other potential competitors in their market. Privately owned companies should not receive such preferred borrowing status, because it redirects investor funds into the middle- and upper-income housing market at the expense of other potential investments. Finally, the failure of either Freddie or Fannie could saddle taxpayers with a huge liability.
Throughout 1996, a number of reports mandated by recent legislation were issued by the General Accounting Office, the Congressional Budget Office, the Department of Housing and the Treasury Department. Those reports scrutinized the system under which Freddie and Fannie operate. Congressional hearings were also held on the subject. Critical commentators argued that the $2 billion in benefits received by the GSEs is a blatant form of corporate welfare. They further argued that Freddie and Fannie constitute a duopoly, a fancy term to indicate that the two GSEs share above-average profits in a noncompetitive market. It's no wonder that with the many benefits of their special status, Freddie and Fannie have no direct competition. They have even begun to move into new markets.
A clear sign of how much Freddie and Fannie value their government sponsorship is the great effort they expend to maintain it. They have used a portion of their billions of dollars in benefits to fund a high-powered public relations and lobbying machine with the sole purpose of maintaining their current status. Their efforts have involved spending millions on full-time lobbyists, paying millions to politically connected executive officers, and making "soft money" political contributions of three-quarters of a billion dollars, evenly split between Democrats and Republicans, during the last election cycle.
One would think that the scrutiny of last year's reports and hearings would have prompted the GSEs to lie low for a while, but that has not been the case. They have continued to squeeze competitors who do not enjoy their borrowing and tax advantages by entering or increasing their presence in the insurance, reverse mortgage, home equity and subprime mortgage markets. They have contributed nearly $400,000 in soft money in just the first six months of this year. Finally, Fannie Mae brought on board a new political hired gun: Jamie Gorelick, Janet Reno's second-in-command at the Justice Department. She will be compensated millions to, as the American Banker put it, "fight for Fannie Mae on Capitol Hill."(sounds like a lobbyist to me)
The GSE structure is a classic case of a special legislative benefit that its recipients will fight to the death to maintain. Congress should immediately revoke all the benefits of government sponsorship: clearly, Freddie and Fannie can be profitable without them. Eliminating special privileges will force mortgage markets to be truly competitive and will eliminate the possibility that the current system of government sponsorship will someday lead to yet another taxpayer-funded bailout.
posted on 10/17/2005 9:40:28 PM PDT
Too good to be true, a scandal linking Jamie Gorelick and Henry Cisneros (former Sec'y of HUD)??? This PR seems like it could point the way toward a link between HUD and Gorelick turning the "social activism" of the Fannie Mae program into political outreach???
For Immediate Release
NAHREP to Host Hispanic Marketing Conference in San Diego;
Henry Cisneros, Richard Mendenhall, Jamie Gorelick and Jim Park to be honored. http://www.nahrep.org/News/Articles/20011022.htm
San Diego, Calif.October 22, 2001The National Association of Hispanic Real Estate Professionals (NAHREP) will host the nations first real estate conference dedicated exclusively to Hispanic marketing from November 18 through November 20 in San Diego, California.
Henry G. Cisneros, Former Secretary of Housing and Urban Development (HUD) and Chief Executive Officer of American CityVista, Richard A. Mendenhall, the 2001 president for the National Association of Realtors® (NAR), Jamie S. Gorelick, Vice Chair of Fannie Mae and Jim J. Park, Managing Director of Housing & Industry Outreach, Freddie Mac will each be honored for their contribution to Hispanic homeownership
Henry G. Cisneros serves as the founder and chairman of American CityVista, a joint venture to build homes in the central areas of many of the nations major metropolitan areas. It is a commitment by Henry Cisneros and KB HOME to build large-scale distinctive communities in areas where new residential development has not occurred in recent years.
The demand for homes in central neighborhoods, or infill housing, is at an all-time high, says Cisneros. Nationally, there is great momentum for new development in central cities, and city leaders recognize that large-scale homeownership provides community stability. Many Americans want to live closer to work and enjoy a more metropolitan lifestyle. There is also a definite increase in demand for homeownership among minorities and immigrants. These factors have created a tremendous opportunity for American CityVista to build a successful business, because it is based on an ever-growing need.
American CityVista works along with Kaufman and Broad to identify sites, plan neighborhoods, acquire and develop land, build homes, and market them as competitively-priced villages within cities that are wired for technology and designed to honor local tastes and traditions.
Committed to building neighborhoods that mirror the face of America, American CityVista provides new residential options for buyers of all backgrounds and incomes, from immigrants and first time homeowners to empty nesters and hip urban dwellers.
Richard A. Mendenhall, the 2001 president for the National Association of Realtors® has developed a new awards program for individuals or companies that make a significant contribution to the cause of increasing minority homeownership. This new industry awards program sponsored by a partnership of real estate associations will raise public awareness about the need to place a higher priority on creating equality in homeownership. The HOPE Awards (Home Ownership Participation for Everyone) will become a catalyst for focusing public attention on this important issue. It will raise public awareness and signal to policy-makers that its time to place a higher priority on creating parity on homeownership. Among real estate professionals and REALTORSÒ, NARs leadership on this issue will encourage them to renew their efforts to make the minority marketplace a larger part of their business. For those deserving few who win the honor, the awards will be a small way to say thank you.
As Mendenhall stated, The problem with homeownership in America today is that homeownership doesnt look like America today. I served in Vietnam as a Green Beret. A Hispanic man trained me, an Asian man was my point man and I fought side by side with a black man - our very lives depended upon each other. I learned that regardless of our skin color; all of our blood bleeds red. I pledged to myself then that I would never forget! To me it honors us all that the HOPE Awards are a true partnership of so many ethnic real estate associations.
Jamie S. Gorelick is Vice Chair of Fannie Mae. Jamie is responsible for affordable housing and community development products and initiatives, including Fannie Maes $2 trillion American Dream Commitment.
Fannie Mae is committed to expanding the affordable homeownership rates. In March 1994, Fannie Mae set a goal to invest $1 Trillion to provide affordable homeownership and rental housing to 10 million families through the year 2000. This goal was surpassed under Jamies leadership. As a result, in March of 2000 Fannie Mae challenged the public and private sectors to join them in setting a national goal of creating 5 million new minority homeowners. Through the American Dream Commitments minority homeownership initiative, Fannie Mae has committed to contribute at least $420 billion in mortgage investments to serve more than 3 million minority households over the decade. Last year, 8.1 percent of the loans financed by Fannie Mae were made to Hispanic borrowers; this percentage is an all time record for Fannie Mae.
Jim J. Park, is the Managing Director of Housing & Industry Outreach, Freddie Mac. In this position, Park is responsible for the corporations national program outreach and consumer education initiatives with community and consumer groups and supports key business and policy issues impacting Freddie Mac. His position has led him to be an instrumental key aspect in the creation of the Hispanic Community Technology Initiative, a major outreach effort and a partnership between the National Council of La Raza (NCLR), Freddie Mac, the National Association of Hispanic Real Estate Professionals (NAHREP), RealEstateEspanol.com, and EMT Applications, Inc.
The CounselorMAX is a powerful new Web-based tool that is an integral part of the Hispanic Community Technology Initiative. This tool is set to increase access to homeownership among Latino families by using the latest mortgage technology to increase homeownership among Hispanic families. Freddie Mac is providing $2 million over three years to help NCLR reach low- and moderate-income Latino homebuyers, helping them overcome barriers to homeownership, and improve their access to mortgage credit.
It is gratifying to know that these individuals who have contributed greatly to increasing home ownership rates for underserved communities will be nationally recognized for their contributions. said NAHREP president Ruben Garcia.
Fannie Mae, Citigroup and Freddie Mac have supported the event as Diamond Sponsors. Additional information regarding registration and sponsorship is available at www.nahrep.org or by phoning 800-964-5373.
The National Association of Hispanic Real Estate Professionals (NAHREP) is a nonprofit trade association committed to increasing the Hispanic homeownership rate by empowering real estate professionals that serve Hispanic consumers. Founded in 1999, NAHREP has more than 45 regional and local affiliates and members in 43 states. Information about NAHREP is available at www.nahrep.org and on www.realestateespanol.com.
posted on 10/17/2005 10:06:59 PM PDT
(Bill Clinton: "I did not have sex with any of the skeletons in my closet!")
What did Gorelick know and when did she know it??? This article is from just six months ago and it sounds like the Fannie Mae scandal could be huge -- anyone know if there's a further update on this? I'm trying to find something more recent....
False Signatures Aided Fannie Mae Bonuses, Falcon Says
By Kathleen Day and Terence O'Hara
Washington Post Staff Writers
Thursday, April 7, 2005; Page E01
Fannie Mae employees falsified signatures on accounting transactions that helped the company meet earnings targets for 1998, a "manipulation" that triggered multimillion-dollar bonuses for top executives, a federal regulator said yesterday.
Armando Falcon Jr., director of the Office of Federal Housing Enterprise Oversight, said the entries were related to the movement of $200 million in expenses from 1998 to later periods. The result of the changes was an increase in Fannie Mae's 1998 earnings per share and the release of a $27.1 million bonus pool for senior executives.
posted on 10/17/2005 10:30:47 PM PDT
(Bill Clinton: "I did not have sex with any of the skeletons in my closet!")
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