I have had several liberals ask me (with the usual emotion and all-knowing contempt) to explain just how, with a republican in the White House, it was their fault that Fannie/Freddie collapsed. I usually ignore these types of requests because the ‘askers’ think they already have the correct answers, and they probably won’t listen to the facts anyway. But, it’s always a good thing to remind others (‘Independents’?) just how liberal policies destroyed our housing market, and how the ripple effects directly caused the current economic crisis.

A brief history – F/F were the key enablers of the mortgage crisis. They allowed Wall Street to securitize subprime loans by being the major player in all AAA subprime mortgage pools, while simultaneously holding a huge amount of the mortgages themselves. So, they either made the market or became the market. The environment created by this behemoth even allowed the acceptance of mortgage-backed securities put together by others in the industry! But, as we all know, these ‘low risk’ securities were viable only if real estate prices continued to rise.

They didn’t.

In 2005 F/F were failing. Their disgraced leader, (liberal) Franklin Raines, and his ‘accounting principles’ and was found to have perpetrated “extensive financial fraud” by regulators at the Securities and Exchange Commission (SEC) and the Office of Federal Housing Enterprise Oversight (OFHEO). This white-collar thief, defended by liberals to the end (see earlier videos), cooked the books so he and fellow executives could collect hundreds of millions of dollars in bonuses. Raines himself received 52.8 million dollars in bonuses that OFHEO director Lockhart said ‘You could argue that none of it was deserved’.

Why, you might be asking yourself, wasn’t this man and his cronies prosecuted and thrown in jail? How could there possibly have been no legal actions against these criminals – unbelievably, Raines was allowed to retire and keep all of his 52.8 million – particularly given the current climate of the progressive, wealth-sharing Obama administration forcing the evil CEO of GM to retire, admonishing private industry executives for flying to DC in corporate jets for grand-standing, liberal congressional tongue-lashings, and trying to regulate the bonuses earned by executives in PRIVATE industry?

Glad you asked.

The top two recipients of campaign contributions from 1989 – 2008 were Chris Dodd, Chairman of the Banking Committee and of Countrywide sweetheart mortgage deal fame; and, amazingly, newcomer Barack Obama.

In 2005, Alan Greenspan said to congress: If Fannie and Freddie ``continue to grow, continue to have the low capital that they have, continue to engage in the dynamic hedging of their portfolios, which they need to do for interest rate risk aversion, they potentially create ever-growing potential systemic risk down the road,'' he said. ``We are placing the total financial system of the future at a substantial risk.''

The Senate Banking Committee then passed a F/F reform bill, that gave a regulator the power to force F/F to make proper investments, and it required F/F to cease investments in risky assets.

Common sense, right?

If that bill had actually become law, our current economy would be entirely different. But, what happened, you ask? What true Americans, concerned with their constituent’s and this countries well-being, could have possibly been against this regulation?

You already know the answer, don’t you?

In a move that was ‘seen as obscene even then’ and criminal now, Democrats opposed it in committee on a party-line vote (but, I thought Republicans were the obstructionists?). Republicans, due to this Democratic opposition, couldn’t even get the senate to vote on the bill. Chris Dodd (#1 recipient of F/F campaign contributions), Chairman of the Banking Committee, effectively killed the McCain cosponsored bill – S.190. It was reintroduced in 2007, as S.1100: Federal Housing Enterprise Regulatory Reform Act of 2007. It was held up in the Senate Committee on Banking, Housing, and Urban Affairs by the honorable Senator Chris Dodd (D-CT), Chairman.

Now, here comes the embarrassingly uninformed liberal ‘talking point’ that you hear them bring up so much when trying to deflect the blame deservedly placed squarely on their shoulders: “Hey, neocon, why is it that the only F/F reform bill signed into law by Bush was sponsored by Democrats?”

Wow. Any liberal that asks this question is not only showing their ignorance concerning the issue, they are basically shouting “Hey, make fun of me, I’m such a Kool-Aid drinker George Soros has my personal email!’ True, the alternative reality band ‘Pelosi and the Progressives’ did pass a watered down, pork-laden F/F reform bill. Bush signed it into law in Jul, 2008. It wasn’t even close to what Hagel and McCain submitted years earlier (S.190, in 2005), and established the Federal Housing Finance Agency about three years too late. A politically motivated move designed to save face only, and after the F/F collapse!. America and the world was already reeling due to the partisan politics displayed by the crooked liberals in charge of F/F.

TIMELINE:

2001 - The Bush administration warned in the 2001 budget it issued that Fannie and Freddie were too large and overleveraged. Bush said failure "could cause strong repercussions in financial markets, affecting federally insured entities and economic activity" well beyond housing. Bush questioned why government regulated banks, credit unions and savings and loans, but not GSEs? Bottom line, he wanted the GSEs to be treated (regulated) just like their private-sector competitors.

2001 - Democrats had ready allies among lenders accustomed to GSEs buying their risky mortgages. Angelo Mozilo, CEO of Countrywide Financial, complained that "an overly cumbersome regulatory process" would "reduce, or even eliminate, the incentives for the GSEs and their primary market partners."

2003 – Democrat Chris Dodd, Banking Committee Chairman gets an illegal, unethical ‘Friends of Angelo’ sweetheart mortgage, saving him tens of thousands of dollars.

2003 - ''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing."

2003 - At a House Financial Services Committee hearing, Sept. 25, 2003, Frank said: "I do think I do not want the same kind of focus on safety and soundness that we have in OCC [Office of the Comptroller of the Currency] and OTS [Office of Thrift Supervision]. I want to roll the dice a little bit more in this situation towards subsidized housing...."

2005 - McCain cosponsored S.190 , calling for regulatory reform and stiff oversight of F/F. Democrats procedurally kill the bill in a party-line vote, led by powerful liberal, largest F/F campaign contribution recipient, and ‘Friends of Angelo’ sweetheart mortgage recipient, Democrat Chris Dodd.

2005 - Barney Frank, ‘You’re not going to see the collapse’. Homes that are occupied may see an ebb and flow in the price at a certain percentage level, but you’re not going to see the collapse that you see when people talk about a bubble. And so, those of us on our committee in particular (liberals), will continue to push for homeownership (subprime loans).”

2007 – Bill S.190 was reintroduced as S.1100. Same result. Dodd again.

2007 - House passes the Federal Housing Finance Reform Act of 2007, H.R. 1427, fully aware of the impending collapse of F/F in an effort to save face and divert blame.

2008 - Dodd, who chairs the Senate Banking Committee, said he had spoken earlier with representatives from the Federal Reserve, Treasury Department, the executives of Fannie Mae and Freddie Mac, as well as their regulator, the Office of Federal Housing Enterprise Oversight. He said he was reassured that the firms are "fundamentally sound," have access to the capital markets, and have plenty of capital.

2008 – Sept; F/F placed into conservatorship. Complete Liberal FAIL.

2008 - President Clinton put it best today to Chris Cuomo of ABC News: "I think the responsibility the Democrats have may rest more in resisting any efforts by Republicans in the Congress or by me when I was President to put some standards and tighten up a little on Fannie Mae and Freddie Mac."

*Interesting Footnote:
The failing, liberally biased paper, The New York Times’ Dec. 20 report, Clinton’s Sept. 25 statement isn’t mentioned. The Times censors all evidence of the Democrats’ central role in destroying the economy. However, George Bush, the president who tried to regulate Fannie Mae and Freddie Mac’s lending practices, is accused of opposing regulation.

Videos proving all the above is true are easily viewed on YOUTUBE. Of particular interest are the ones where liberals are defending Raines, and giving his leadership a partisan vote of confidence.