Time To Kill Off Freddie Mac, Fannie Mae, Says Barney Frank (click title to entry - thank you)
By Eric Savitz
Rep. Barney Frank wants to kill off Fannie Mae (FNM) and Freddie Mac (FRE) for good.
At a hearing in Washington today, the chairman of the House Financial Services Committee said “the committee will be recommending abolishing Fannie Mae and Freddie Mac in their current form and coming up with a whole new system of housing finance. That’s the approach, rather than a piecemeal one.”
Fannie and Freddie, the largest U.S. mortgage finance companies, have received $110.6 billion in taxpaper aid since regulators took control of them in September 2008.
So, what would happen to the public holders of FNM and FRE? Nothing good, in the market’s view.
Freddie Mac shares are down 10 cents, or 7.6%, to $1.21.
Fannie Mae shares are down 6 cents, or 5.6%, to $1.01
I believe that will fall in line with the new Consumer Financial Protection Agency. It will remove corrupt practices and will better serve the citizens of the country.
That, and the Senate laying new ground rules for 'The Fed,' will round out a 'movement' if you will, among the current leadership to remove dysfunction and replace it with better regulated entities that may prove to be fool proof.
Nice.
How many people knew they were all working on this issue so long and hard?
None? Few?
Oh.
I wonder why?
Feeling a little disconnected from the work your federal government has been doing?
Feel like nothing was achieved for the last year?
Oh.
Used to 'instant gratification' maybe?
I have absolutely no doubt the Republicans will reject all this as well.
Can't imagine why? Hm?
NATION'S HOUSING
The proposed agency's powers and oversight would go beyond mortgages and real estate. Here's a rundown of what the agency could do, who's for and against it, and how it might affect you.
By Kenneth R. Harney August 2, 2009
Reporting from Washington - Healthcare reform has drawn most of the attention on Capitol Hill lately, but for home buyers, sellers and mortgage applicants, the legislative ballgame will really get underway in September, when Congress begins serious work on the proposed Consumer Financial Protection Agency.
Legislation creating the agency is pending in the House, pushed by Financial Services Committee Chairman Barney Frank (D-Mass.), who is its principal author. The Obama administration had outlined a similar plan at the end of June and considers passage of a bill a priority.
Why should you care? What might the agency do for you -- or to you? Here's a quick overview:
To begin with, be aware that the agency's powers and oversight would extend far beyond mortgages and real estate -- into all credit cards, debit cards, consumer loans, payday loans, credit reporting agencies, debt collection, stored-value cards and even investment advisory and financial advisory services, to name only part of the list.
It would have the authority to alter long-common practices that nettle consumers, such as mandatory arbitration clauses in the fine print of contracts that automatically send business-consumer disputes to arbitrators rather than to courts. The agency could ban or limit such clauses in specific products if they are shown to tilt against consumers' interests.
The agency would write the user-safety rules for virtually all consumer financial products and would have the legal firepower to levy huge fines -- tens of thousands of dollars a day per violation in some cases -- and prosecute lenders, brokers and others who break the rules.
The agency would be the dominant federal consumer protector in all home real estate settlements. It would regulate "affiliated" title, escrow and financing businesses connected with realty firms and builders. It would oversee equal credit opportunity and fair housing, and would set standards for all mortgage offerings, whether from the biggest national banks or the smallest local brokers. Generally it wouldn't seek outright bans on mortgage products that carry elevated risks -- interest-only loans, for instance -- but would require that lenders restrict such mortgages to well-informed applicants who can document that they understand the risks and can afford the payments.
Within its first year, the agency would be tasked with creating consumer-friendly, uniform disclosures for all home purchase and financing transactions, starting with a combined "good-faith estimates" and truth-in-lending statement....
