Redstate

Posted at 7:52am on Jul. 11, 2008 Rethinking the Goals of a National Mortgage Bailout

An already-ugly problem gets worse

By blackhedd

Front and center this week have been the ill fortunes of Fannie Mae and Freddie Mac, the government-sponsored enterprises (GSEs) that together own trillions of dollars’ worth of US home mortgages.

At this point in time, there really is no reason to own the stock of either company. The Administration is said to be looking carefully at whether and how to do a government takeover of one or both. The grand 35-plus year experiment in semi-public support for US housing may be coming to an end.

But that’s far from the only problem in the mortgage/housing sector. In fact, it may be the easy problem. The hard problem is what to do about all the homeowners that are falling behind on their payments.

This is a time bomb that continues to tick away, and Congress has been working hard to pass a huge bailout bill (the Dodd-Frank Act). President Bush has vowed to veto it, but he’ll break that promise.

But what are the objectives (both political and economic) of this enormously costly legislation? Can it actually meet those objectives? And are they the right objectives in the first place?

Keep reading.

Posted in Dodd-Frank Act | Economy | housing | Mortgage Bailout — Comments (45)/ Email this page » / Read More »

Posted at 5:25pm on Jun. 20, 2008 Bank of America's Bailout Bill

64 Pages of 'Confidential and Proprietary' Evidence

By Bluey

Tim Carney at the Washington Examiner has another solid piece today on Bank of America’s role in the housing bailout bill. With the Senate set to vote on the legislation next week, conservatives are mounting a last-ditch effort to stop an outrageous abuse of taxpayer money.

The “confidential and proprietary” document Carney uncovered (click here to view) illustrates just how intricately involved Bank of America has been in drafting the legislation with Sen. Chris Dodd (D-Conn.) and Rep. Barney Frank (D-Mass.). Bank of America, of course, is in the process of buying Countrywide Financial Corp., which remains at the center of the mortgage meltdown.

A Senate staffer and a House staffer both told me on background that the House version of the bill — or at least the bailout portion — was drafted by Bank of America. I have also reviewed a March 11, 2008, "Discussion Document" currently circulating among Hill staffers that appears to have been drafted by somebody at Bank of America.

The document's title, "FHA Housing Stabilization and Homeownership Retention Act of 2008," is now the title of HR 5831, the House version of Dodd-Shelby, sponsored by Rep. Barney Frank, D-Mass.

The paper more or less spells out the mortgage bailout plan contained in the House and Senate versions. The date of the document is one month earlier than the date HR 5831 was introduced. If the document, stamped "confidential and proprietary" is valid, it points to a Bank of America source as the author of the House version of this bill. Calls and e-mails to Dodd, Frank, and Bank of America were not returned.

If this was happening under a Republican Congress just imagine the media scrutiny. We’re barely hearing a peep.

Posted in Barney Frank | Chris Dodd | Congress | Congress | Housing Crisis | Mortgage Bailout — Comments (13)/ Email this page » / Read More »

Posted at 1:47pm on Jun. 18, 2008 Want to buy an overpriced house in Las Vegas? You’re about to!

By Matt Kibbe

Thanks to Matt for stopping by to post this. Matt Kibbe is the President of FreedomWorks. --Erick

The current correction in the housing market is painful for Wall Street and many homeowners. Not missing an opportunity to ‘solve’ a ‘crisis,’ Congress is attempting to save the day with the Dodd-Frank bailout bill that is scheduled to hit the Senate floor later today.

While supporters try to sell the bill as legislation to help folks facing foreclosure, a closer look shows who benefits and who ultimately pays.

Dodd-Frank creates a new $300 billion taxpayer loan guarantee facility that nearly doubles the size of the Federal Housing Administration (FHA), and allows mortgage lenders and banks to cherry-pick the worst performing and riskiest loans in their portfolios and offload them onto the FHA, creating new loans that shift 100 percent of the liability to the taxpayer.

Read on . . .

Posted in Barney Frank | Chris Dodd | Congress | Countrywide Financial | Dodd-Frank | Mortgage Bailout — Comments (16)/ Email this page » / Read More »

Posted at 10:47am on Jun. 18, 2008 Demand Congress Investigate Senator Chris Dodd

By The Directors

The New York Times reports this morning that Senator Chris Dodd (D-CN) had suspicious dealings with Countrywide Financial, the mortgage lender Senator Dodd is attempting to bailout with taxpayer dollars.

According to Senator Dodd, he knew he was in a "V.I.P. program" at Countrywide Financial, but he denies that this meant he was getting special treatment from Countrywide Financial.

That's like being a member of the United States Senate and thinking you get treated just like everybody else.

Most damning, however, is that Senator Dodd is now trying to bailout Countrywide Financial with billions of taxpayer dollars.

Call your senator at 202-224-3121.

Tell your Senator there must be a full investigation to determine if Senator Dodd is operating in a quid pro quo relationship with Countrywide Financial.

Likewise, the Senate should not consider Senator Dodd's mortgage bailout proposal that benefits Countrywide Financial until we know if Senator Dodd is returning the favor of his very low interest mortgage rate.

Finally, tell your senator that Senator Dodd should step down from chairing the Banking Committee. If he is not smart enough to know being in Countrywide's "V.I.P. Program" gave him special treatment, he is not smart enough to preside over this important committee.

Posted in Chris Dodd | Congress | Connecticut | Countrywide Financial | Mortgage Bailout | Quid pro quo — Comments (6)/ Email this page » / Read More »

Posted at 9:48am on Jun. 16, 2008 Time to Call Mitch McConnell

By Erick

Your must read of the morning is this editorial at the Wall Street Journal.

This week, the Senate takes up the Mortgage Bailout Bill.

We have known Speaker of the House Nancy Pelosi (D-CA) received preferential treatment from Countrywide Financial.

We now know that the legislation will mostly benefit mortgage lenders like Countrywide Financial.

We now know that the two Senate leaders pushing this legislation, Chris Dodd (D-CN) and Kent Conrad (D-ND), received preferential treatment from Countrywide Financial, in addition to Senator Barbara Boxer (D-CA).

Kent Conrad, on Friday, issued a statement saying he "never met Angelo Mozilo," the CEO of Countrywide Financial. But, the Wall Street Journal reports Senator Conrad now admits he "called Mr. Mozilo and asked for a loan. The result was a discounted loan on his million-dollar beach house and a separate commercial loan of a type that residential lender Countrywide did not even offer to other customers, regardless of the rate."

Call your Senator at (202) 224-3121 and tell him we should not be bailing out mortgagors as payback for Senators.

Call the Republican Leader, Senator Mitch McConnell, at (202) 224-2541 and tell him that in light of apparent Democrat indiscretions with Countrywide, he should not agree to limit debate on the mortgage bailout.

Posted in Chris Dodd | Congress | Corrupt Democrat Watch | Kent Conrad | Mitch McConnell | Mortgage Bailout | Nancy Pelosi — Comments (4)/ Email this page » / Read More »

Posted at 7:03am on Apr. 2, 2008 Congress Considers A Mortgage Bailout

The Scene Shifts to Washington

By blackhedd

As I told you yesterday (here), the Federal Reserve's aggressive measures to stabilize the financial system appear to be paying off, at least in the near term.

But the scene is shifting to Washington, as Capitol Hill Democrats hurriedly consider a home-mortgage bailout, perhaps by expanding the mandate of the Federal Housing Administration (FHA).

As I wrote here, there are very good reasons to oppose a straightforward bailout, in which taxpayer funds would provide relief to people who are either unable or unwilling to stay current on their mortgage payments. If you agree with me, today would be a very good day to call your Senator and tell him or her about it. Particularly members of the Senate Banking Committee, chaired by Christopher Dodd of Connecticut. (The ranking Republican is Shelby of Alabama.)

And Mr. Dodd spoke in the Senate on this subject yesterday (prepared text here).

I warned you that this was coming. What Senator Dodd said, in essence, is this: "the Administration [sic] just spent $30 billion in taxpayer money to bail out Bear Stearns. We're gonna kick their butts for doing that, starting tomorrow. But now that we saved Wall Street's bacon, we have to do the same thing for homeowners."

More...

Posted in Christopher Dodd | Economy | federal reserve | FHA | Mortgage Bailout | Senate Banking Committee — Comments (53)/ Email this page » / Read More »

Posted at 8:46pm on Dec. 10, 2007 On The Mortgage Bailout Plan

By Pejman Yousefzadeh

Alan Reynolds points out the myriad problems with the new scheme. An excerpt:

If risky subprime borrowers were actually supposed to be the main beneficiaries of such refinancing assistance, then it would have been the height of irresponsibility for President Bush to suggest greater involvement of the Federal Housing Administration, Fannie Mae and Freddie Mac. Shifting default risk to U.S. taxpayers could be very costly.

In reality, the only financial aid in this plan goes to those who qualify for the five-year freeze on mortgage rates -- a curiously selective little group, estimated to number between 145,000 and 360,000.

Read on . . .

Posted in Economy | Mortgage Bailout — Comments (6)/ Email this page » / Read More »