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John_Schwada's Blog

by John_Schwada from Los Angeles

Last Post 7 days, 3 hours Ago


U.S. Rep. Maxine Waters, D-Los Angeles, played a forceful role in protecting mortgage giants Fannie Mae and Freddie Mac when regulators repeatedly raised red flags, saying that these two institutions, now disgraced and bailed-out, were in very deep trouble.

Unwitting enablers or co-conspirators? The record is chilling. It shows the feisty Waters and her congressional colleagues ignored repeated warnings that Fannie Mae was a potential train-wreck waiting to happen; that Fannie was loaded down with risky loans, was cooking its books to hide the gaping holes in its portfolio and that the engineers of this impending debacle, in particular Fannie CEO Franklin Raines, were raking in millions of dollars in bonuses based on Fannie's reckless policies.

Fannie and Freddie's overseers in the Office of Federal Housing Enterprise Oversight (OFHEO) regulators ran into a buzzsaw of skepticism and denial when they testified (repeatedly testified) about their troubling findings regarding Fannie and Freddie before a U.S. House of Representatives subcommittee (Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises) on which Waters and U.S. Rep. Barney Frank, D-Massachusetts (photo below, right), sat. Frank now is a leading voice in the bailout debate, Waters to a lesser extent.

Fannie and Freddie, the regulators were told by the testy Democrats, were not in crisis; in fact, the OFHEO folks were told by one Democratic lawmakers that they had wasted the subcommittee's time with their findings, that he was literally "pissed off" by OFHEO's work. Talk about shooting the messenger.

Take a look at this videotape now on YouTube. http://www.youtube.com/watch?v=_MGT_cSi7Rs
WARNING: This video is highly partisan and heavily edited. But it does capture the flavor of the congressmembers reacting to a Bush administration proposal to alter and supposedly improve, the oversight of Fannie Mae and Freddie Mac after an audit discovered some major irregularities.

In 2006 OFHEO produced an exhaustive 390-page examination of Fannie Mae's activities - that goes along way toward explaining that agency's meltdown and its role as an enabler of the housing bubble. http://www.ofheo.gov/media/pdf/FNMSPECIALEXAM.PDF

Here are some excerpts from the transcript of the Sept. 25, 2003 hearing of that subcommittee.

U.S. REP. BARNEY FRANK (D-MASSACHUSETTS):
".... I think it is clear that Fannie Mae and
Freddie Mac are sufficiently secure so they are in no great
danger.
And I was glad to have Secretary Snow say when he
testified that this is not something we are doing in response
to a crisis. For once, Congress is getting out ahead of a
problem.....In this case, we are taking some anticipatory steps....

"I don't think we face a crisis; I don't think that we have
an impending disaster. We have a chance to improve regulation
of two entities that I think are on the whole working well.

Fannie Mae and Freddie Mac do very good work, and they are
not endangering the fiscal health of this country."


U.S. REP. GREGORY MEEKS (D-NEW YORK):
"And since I have to go to another hearing, I will try to be just real quick.
As well as the fact that I am just pissed off at OFHEO because if it wasn't for
you I don't think that we would be here in the first place.

"And Freddie Mac, who on its own, you know, came out front
and indicated it is wrong, and now the problem that we have and
that we are faced with is maybe some individuals who wanted to
do away with GSEs in the first place, you have given them an
excuse to try to have this forum so that we can talk about it
and maybe change the direction and the mission of what the GSEs
had, which they have done a tremendous job."

******SCHWADA Note: Meeks' view is that the best defense is a good offense.
But the oversight agency head, Armando Falcon, Jr., fires back:


ARMANDO FALCON, JR., OFHEO DIRECTOR:
"Congressman, OFHEO did not improperly apply
accounting rules; Freddie Mac did. OFHEO did not try to manage
earnings improperly; Freddie Mac did. So this isn't about the
agency's engagement in improper conduct, it is about Freddie
Mac. Let me just correct the record on that."

******SCHWADA Note: And then there's Waters, also defending the GSE's
(Government Sponsored Enterprises, i.e. Fannie and Freddie), opposing any new
regulatory scheme that might interfere with Fannie and Freddie's
missions and - with haunting irony - praising Fannie and Freddie's
"innovative" loan practices - including backing "100 percent loans."

U.S. REP. MAXINE WATERS (D-CALIFORNIA):
"Mr. Chairman, we do not have a crisis at Freddie Mac, and
in particular at Fannie Mae, under the outstanding leadership of
Mr. Frank Raines.
Everything in the 1992 act has worked just fine.
In fact, the GSEs have exceeded their housing goals.

"What we need to do today is to focus on the regulator, and
this must be done in a manner so as not to impede their [Fannie and Freddie's]
affordable housing mission, a mission that has seen innovation
flourish from
desktop underwriting to 100 percent loans."

this is the url that gets you to the full transcript of Sept. 25, 2003 hearing:
http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbn
ame=108_house_hearings&docid=f:92628.wais

19 Comments |  Add a Comment

Member Comments Total Comments: 19
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DfDeportation read my blog view my photos
Oct 2, 2008 | 12:37 AM

And now they're crying for more oversight? What hypocrites!!!

voodoodog read my blog view my photos
Oct 2, 2008 | 4:14 PM

Maxine Waters along with her gal pal Nancy Pelosi are cancerous sores on this state and nation.

DMMickie read my blog view my photos
Oct 2, 2008 | 7:23 PM

Schwada- don't forget the Republicans. The BUSH administration is pushing this bailout and look what his appointed treasury secretary composed for his friends on Wall Street.
-The new legislation states: “Decisions by the Secretary [of the Treasury] pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.” "The Legislation allows the Treasury Department to appoint the same bankers who created the crisis to administer and dictate the use of trillions of our tax dollars."
Your master Rupert Murdoch is a donor to the McCain campaign and donated to the Bush campaign. So what does that make you?
Check out Murdoch's donations this year, from the site, www.opensecrets.org

-McCain, John MURDOCH, K RUPERT MR
LOS ANGELES,CA 90064 20TH CENTURY FOX/CHAIRMAN 3/14/08 $2,300
-McCain, John MURDOCH, RUPERT MR
NEW YORK,NY 10036 FOX ENTERTAINMENT GROUP INC./CHAIRM 6/5/08 $2,300
-McCain, John= MURDOCH, WENDI MRS
LOS ANGELES,CA 90064 NEWS CORPORATION/EXECUTIVE 3/14/08 $2,300
-McCain, John= MURDOCH, WENDI MRS
NEW YORK,NY 10036 MYSPACE/EXECUTIVE 6/5/08 $2,300
-

John_Schwada read my blog view my photos
Oct 2, 2008 | 7:49 PM

More from U.S. Rep. Barney Frank’s 9/25/03 testimony, explaining that Fannie and Freddie had a special mission and therefore he was willing to “roll the dice a little bit more” in regards to regulating them so they could fulfill that mission:
“I don't want to treat Fannie Mae and Freddie Mac the same as I treat a regular bank. If I wanted them to be just like a regular bank, then we wouldn't need a Fannie Mae and a Freddie Mac. We could have a regular bank. The theory is that we have these separate government-sponsored enterprises that do have some statutory advantages in return for which they focus on housing, and, specifically, we give them goals. We have the Community Reinvestment Act. ... .they are very different...So I guess that may sum up to me why some of us have some differences on this. I do not want Fannie and Freddie to be just another bank. If they were not going to do more than another bank would because they have so many advantages, then we do not need them. And so therefore, I do think I do not want the same kind of focus on safety and soundness... I want to roll the dice a little bit more in this situation towards subsidized housing.”

John_Schwada read my blog view my photos
Oct 2, 2008 | 8:16 PM

Dmmickie: Please spare us your gross generalizations. Take a look at the contributions of News Corp. President, Peter Chernin, and his wife, Megan:

Obama, Barack CHERNIN, MEGAN
BEVERLY HILLS,CA 90212 NON PROFIT/NON PRACTICING ATTORNEY 10/12/07 $2,300
Obama, Barack CHERNIN, MEGAN
BEVERLY HILLS,CA 90212 NON PROFIT/NON PRACTICING ATTORNEY 1/9/08 $2,300
Clinton, Hillary CHERNIN, PETER
BEVERLY HILLS,CA 90212 NEWS CORP/PRESIDENT AND COO 6/15/07 $2,300
Clinton, Hillary CHERNIN, PETER
BEVERLY HILLS,CA 90212 NEWS CORP/PRESIDENT AND COO 6/15/07 $2,300
Obama, Barack CHERNIN, MEGAN
BEVERLY HILLS,CA 90212 NON PROFIT/NON PRACTICING ATTORNEY 10/12/07 $2,100
Obama, Barack CHERNIN, MEGAN
BEVERLY HILLS,CA 90212 NON PROFIT/NON PRACTICING ATTORNEY 2/14/07 $2,100
Dodd, Christopher J CHERNIN, PETER
BEVERLY HILLS,CA 90212 NEWS CORPORATION 12/16/06 $2,100
Obama, Barack CHERNIN, PETER
SANTA MONICA,CA 90402 NEWS CORP/PRESIDENT 2/14/07 $2,100

Sorry to bust your bubble, Dmmickie. In fact, it looks like Chernin and his wife gave $8,400 MORE to Democratic presidential candidates, Obama, Clinton and Dodd, than Rupert Murdoch and his wife gave to McCain. Also, you failed - perhaps an innocent mistake on your part (?) - to note that Murdoch gave $2,300 to Hillary in June, 2007.

John_Schwada read my blog view my photos
Oct 2, 2008 | 8:21 PM

Dmmickie: since you are dedicated to the proposition that money is a problem in politics, maybe you should express those concerns to candidate Obama, who opted out of public financing. but i suspect you've already contacted him personally and railed at him on this issue...right? right? i can't hear you....

DMMickie read my blog view my photos
Oct 3, 2008 | 7:54 PM

Schwada_... looks like News Corp. is hedging its bets? Your master is RUPERT MURDOCH. He is an admitted supporter of the conservative agenda, and has admitted directing his news organization to support the Bush Administration and its follies such as the Iraq war. It is pretty obvious who he supports in this election. Watch is this You Tube video: http://www.youtube.com/watch?v=0K2pLo8JV5Y

DMMickie read my blog view my photos
Oct 3, 2008 | 8:22 PM

Schwada- candidates need money to run a campaign... yes? so how should they raise that money? Who should be allowed to donate? Obama and McCain are both raising lots of money. Look at McCain's top donors.
I have an idea to lower the need for so much money. Free air time on the networks to presidential candidates, in PRIME TIME. After all, those are public airwaves Rupert is making money with. Get fair and balanced Schwada.

This_Aint_Your_Land read my blog view my photos
Oct 4, 2008 | 9:31 AM

100 million dollars of that bailout money is going to the National Council of La Raza.

You remember La Raza right? (For The Race Everything, For The Rest Nothing) is their national slogan.

Meanwhile Antonio Villaraigosa is demanding five billion to build 20,000 low income units for his illegal friends from Mexico. While the rest of us are paying the highest taxes in the nation during the worst economy since the depression.

And who was one of Obama's largest contributors? None other than Fannie Mae.

DfDeportation read my blog view my photos
Oct 4, 2008 | 10:46 AM

John_Schwada
Oct 2, 2008 | 5:21 PM Dmmickie: since you are dedicated to the proposition that money is a problem in politics, maybe you should express those concerns to candidate Obama, who opted out of public financing. but i suspect you've already contacted him personally and railed at him on this issue...right? right? i can't hear you....

Apparently The Dali Bama doesn't believe in REGULATORY OVERSIGHT in campaign financing huh? Kinda like Faniie Mae and Freddie Mac?

DfDeportation read my blog view my photos
Oct 4, 2008 | 10:47 AM

Is TED HAYES running against maxine waters?

DfDeportation read my blog view my photos
Oct 4, 2008 | 10:52 AM

I'm just amazed at how much hatred from angry black females is being spewed toward Sarah Palin. You had to love Palin mocking Tina Fey and the Extreme Liberals during the debate by flirting and winking at the camera. Didn't you like that DMickie?

donaldtrump read my blog
Oct 4, 2008 | 1:14 PM

Murdoch kinda likes Obama and thinks McCain is unpredictable, "he has a lot of problems". Rupert wants to meet Obama and has a great deal of respect for him.

http://www.youtube.com/watch?v=GHdQHgIR0-s

DfDeportation read my blog view my photos
Oct 4, 2008 | 5:38 PM

MACK DADDY!!!!

This_Aint_Your_Land read my blog view my photos
Oct 5, 2008 | 1:34 AM

Remember how Maxine Water fought so hard to keep that money sucking Killer King hospital open so that her illegal alien constituents could continue to receive free emergency healthcare. That, despite continuously proven incompetency and drug use by unqualified staff members that led to the death of thousands.

TameraHB read my blog view my photos
Oct 5, 2008 | 7:06 PM

WOW...EVERYONE Should look into O'BOMB'YA's contributions...oh yeah wait, He WON'T POST Them all, as the MCCain campaign has!!!!! HOWEVER, several of the ones "found out" come from people like "will, good" with the occupation of "loving" no really...there are several like this, and other BOGUS names just to MOCK The whole process!! AND people like Khadafi, Iranian President Mahmoud Ahmadinejad and terrorist countries are supporting,rallying for, and fundraising for him...what does that tell you??????

donaldtrump read my blog
Oct 6, 2008 | 8:47 AM

TameraHB
Oct 5, 2008 | 4:06 PM

Things is, you lose credibility calling Obama, "O'BOMB'YA's".

DMMickie read my blog view my photos
Oct 7, 2008 | 8:19 PM

Tamera_ Look what the Washington Post.com is reporting.
-"The FEC sent a letter to Sen. John McCain's campaign treasurer Sept. 30 demanding the candidate turn over more information about "contributions that appear to exceed the limits."
The letter is accompanied by a nine-page list showing scores of overages from McCain's August campaign finance report, including nearly $13,000 from Texas rancher Ray R. Barrett Jr.; $9,200 from an Iraqi security consultant, H. Carter Andress; and $5,000 from Joseph F. Davolio, an executive at a major national liquor, beer and wine distributor."

DMMickie read my blog view my photos
Oct 7, 2008 | 8:27 PM

Schwada: sorry to horn in on your job but let me inform your "dear readers" about a few of McCain's biggest donors. Money came from the organization's PAC, individual members or employees or owners. Several PACs also contributed to Obama. Guess they are "fair and balanced". I can't wait to read your scathing and hard hitting blog about the McCain campaign money trail. Well... I am waiting.
-
Merrill Lynch $349,170
Citigroup Inc $287,801
Morgan Stanley $249,377
Goldman Sachs $220,045
JPMorgan Chase & Co $206,392
AT&T Inc $183,663
Credit Suisse Group $175,503
PricewaterhouseCoopers $163,670
Blank Rome LLP $153,426
US Government $152,118
US Army $150,470
Wachovia Corp $147,456
Greenberg Traurig LLP $145,737
UBS AG $141,365
Bank of America $133,975
FedEx Corp $121,904
Gibson, Dunn & Crutcher $120,246
US Dept of Defense $118,125
Lehman Brothers $115,707
Bear Stearns $108,000

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John_Schwada

That's me, Nov. 1, 1989, at the Herald-Examiner bureau, LA City Hall...a long-time ago. As a reporter at Fox 11 News, I have covered national political conventions, presidential impeachment hearings and gubernatorial recall campaigns. I've done double-duty as an investigative reporter and, in this capacity, won Golden Mike and Emmy awards. I also have labored in the newspaper biz: LA Herald-Examiner, the LA Times, the San Diego Union, the Arizona Republic and the Riverside Press-Enterprise. I went to UC Berkeley and learned to respect the sharpshooting ability of Alameda County's "blue-meanies" who could hit protesters in the derriere with buckshot from 50 paces. I'm now looking for a wealthy benefactor who will donate their villa in Spain to me and my family.

Member Since: 7/4/2006