Fannie gives OFHEO the finger
September 28th, 2004 by 
InLibrisLibertas
Fannie Mae announced that it would only take direction from the SEC as to its accounting. Basically telling its congressionally appointed regulator to stick it where the sun doesn’t shine. Mr. Potato Head is counting on his team of lobbyists and beautiful Russian escorts to do what they’ve always done in the past, whatever is necessary to get the problem swept under the rug. He may get away with it - Fannie has frequently been described as a lobbyist company with a finance business on the side.
You can tell that Fannie Mae is a government agency. If it were a private company, after evidence of wrongdoing such as OFHEO has released, the senior executive team would be gone. An interim CEO would have been appointed over the weekend by the board. Instead, they’re going to try to brazen it out. If necessary they will release a public statement “taking responsibility”. But not consequences (or truth, for that matter).
Bizarre and pathetic.
Crash coming.
Posted in Government, Real Estate, Rogues and Rascals, Stocks | 
September 28th, 2004 at 11:05 am
Man, I just got this breaking news from you, and I’m in the news business, as you might have been able to tell from my handle. I seriously would like your thoughts on matters I raised in comments on a previous post. Don’t freak out. I ain’t Mike Wallace, and this ain’t “60 Minutes” calling. And I ain’t Chris Matthews and this ain’t “Hardball.”
September 28th, 2004 at 11:17 am
I see where Fannie is now saying Mudd “misspoke.” That’s a sign that something besides the tail is waggin’ the dog at Fannie right now. Usually this kind of thing happenes AFTER a crash. Maybe this will allow housing bubbles to shrivel, rather than pop? Or is it too late?
September 28th, 2004 at 1:20 pm
Only just saw your previous comment.
Zero down? Interest only? That’s last year. This year it is negative amortization loans. Yes, you heard that right, you don’t even have to pay the interest on your loan, the lender presumes that the property will appreciate enough to secure his unpaid interest. There are several mechanisms supporting the housing bubble here in California. First is loose to non-existent credit standards, second is creative financing (see above), third is California’s foreclosure laws, which basically let borrowers mail in the keys and walk away. However, a bubble exists fundamentally when the psychology of buying on momentum takes over. People feel that they have to buy because they see rising prices and there is an instinct to chase them. Housing affordability? It is measured based on the traditional mortgage structure (20% down, 30-year fixed, etc.). That, of course, is irrelevant.
September 28th, 2004 at 3:27 pm
Many thanks. Somehow I’d missede negative amortization. How wacko.