November 09, 2007

Fannie and Freddie regulator upset Cuomo filed subpoenas without consulting him. My question is why didn't Cuomo subpoena the regulator?


It was one thing to have ENRON happen in the private sector, it's another thing when Fannie and Freddie go belly up, who supposedly had government oversight.

I hope people go to jail. A lot of 'em. Because a lot of people were in on the scam, and knew everything that was going on, but for commissions, bonuses, stock options or career advancement, they looked the other way. And no, incompetence should not be a defense.

WASHINGTON (Reuters) - New York Attorney General Andrew Cuomo was wrong to file subpoenas against Fannie Mae and Freddie Mac without consulting their regulator and may have overreached his authority, the regulator wrote in a letter on Thursday.

"I am disappointed that your office did not contact OFHEO before or even after subpoenaing the GSEs and issuing certain threats regarding their future business activity," wrote James Lockhart, director of the Office of Federal Housing Enterprise Oversight.

Cuomo announced on Wednesday that he had served the two mortgage finance firms with subpoenas in an investigation of what Fannie and Freddie might have known about possible home value inflation.

21 comments:

Anonymous said...

It's obvious. All regulatory positions have been captured by the modern GOP.

They do stuff like put an arabian horse breeder in FEMA---not accidentally but intentionally.

An oil company lobbyist type as head of Interior.

The purpose of these people is to actively *prevent* the government from doing its usual job. These people hate government and democratic accountability.

Remember when Republicans used to be the fuddy duddies who believed in following all the rules?

Now they believe that the rule is that there's no rules, if you're rich and Republican.

Only poor people commit crimes.

But indicting rich white people for ripping us off?

That's ""class warfare"".

Princess Mononoke said...

I don't understand why Cuomo would have to ask OFHEO for permission to subpoena the GSEs??? The clear fact that they're pissed off indicates some guilt or fear of what they must disclose under OATH. That's my take on their reaction.

There is sooo much bureaucracy! If the GSE regulator "Office of Federal Housing Enterprise OVERSIGHT" was doing their job in the first place WE would NOT be in this historical mess to begin with!!! Unbelievable garbage!

Corruption begets more corruption. The perpetual cycle of shameless cover-up continues.

Anonymous said...

CEO for Fannie or Freddie sees the Subpoena.... Calls the head of OFHEO and says, "Hey, you gotta get this guy off my back. We paid you a lot of money and why should we have to deal with this twit? You better go out in the media and make a statement. Get him off our backs! If we go down, you go down with us!"

Natural Eyebrows said...

It was OFHEO that first discovered the accounting shenanigans at Fannie and Freddie. That scandal cost Franklin Raines his job. Mr. Raines was rich by then, but he wasn't white.

I agree with the director of OHEO: the GSE's have little incentive to tolerate puffed up appraisals, because they stay on the hook for the loans they sell into the bond market. Loans sold to the private MBS firms are the ones to look at.

Anonymous said...

Because they wanted more time to run the paper shredders.

wc said...

Fannie and Freddie may have little incentive to accept high appraisals - the problem is they're more than likely being run by baffoons. There's also no reason to believe that anyone in charge of Federal oversight is actually qualified to do their job - clearly they haven't been. Look at FEMA.

Anonymous said...

To be fair to OFHEO, it was their office that was doggedly uncovered corruption at the GSE's, against the best efforts of the Democratic leadership, for whom the GSE's are a bulwark of support.

Anonymous said...

And Benny wants to give fraud agencies power to give out $1million loans. That's right, from $417 to $1m!

What a moron. B2 Bomber is now active.

http://housingdepression.blogspot.com/2007/11/1million-fanniefreddiie-loan.html

Anonymous said...

This Regulator is upset because Cuomo is about to uncover the biggest toxic mess in history, a investigation that will cost he and his corrupt buddies their jobs. Pure and Simple, and his motives for such outrage toward Cuomo are completely and utterly transparent.

The Emporer has no clothes--

michael said...

99.99999999% of time...if a govt regulator don't like it...I FRACKING LOVE IT!!!!!

sam said...

You got this completely wrong here with Lockhart. He is possibly the 1 regulator in America that has been on the case here for the last 4+ years.

His regulatory powers are limited by statute, and he's caught a lot of heat from Fannie and Freddie (and their many bipartisan shills in Congress) by limiting their portfolio growth, forcing them to fess up to accounting irregularities, fire CEO's and sue these executives for bogus compensation.

A hero? He is probably most responsible for limiting the level of mortgage stupidity that the "government sponsored" entities (Fannie + Freddie) were able to engage in.
Unfortunately Wall Street took up the slack here, but this is outside of his purview. The bubble fallout would be MUCH worse if Fannie and Freddie had been leading the decline in underwriting standards and were holding the sort of junk the banks are. They wanted to. Fannie and Freddie have been pushing Congress to force Lockhart and OFHEO off their case during his entire tenure, which means he is constantly under pressure by their shills in Congress to justify his actions. After serving, he certainly won't be getting any of their cushy politician/regulator payoff jobs.

Regarding Cuomo, while it gives me some pleasure, in this instance at least, to see shyster lawyers recriminating against the banks and bringing out "gotcha" emails describing REIC corruption we all knew existed. But remember that Cuomo is a political whore trying to gain attention (and probably Hillary's senate seat) by being like big boss Elliott Spitzer. Cuomo has little understanding of the bigger problem, and quite frankly doesn't care if he makes the problem worse.

Like others of his ilk, he becomes a master of the obvious when it comes time to assess blame. Before then, he is useless.

Contrast Cuomo to Lockhart. Lockhart went up against Fannie and Freddie and their lobbying might when it was an extremely unpopular thing to do. He is a high level civil servant making less than many uneducated mortgage brokers/ reic. He was not building his political career, but doing the right thing.

brokersleaveyoubroke said...

I agree with the director of OHEO: the GSE's have little incentive to tolerate puffed up appraisals,

That's true but it's usually not the corporation itself that's crooked, it's usually a few individuals in the corporation who are getting some money under the table to turn a blind eye to fraud.
The director of OHEO is just calling attention to the fact that he's not doing such a great job.

Mammoth said...

"Corruption begets more corruption. The perpetual cycle of shameless cover-up continues."
------------
Notice a pattern with the Bush administration?

The green light for this sort of thing comes from the very top.
Those of you who who voted for Bush got just what you voted for.

Anonymous said...

you guys are too much- you left out bush being personally responsible for bringing down building #7 at the WTC, and being personally responsible for the levies breaking during katrina!

frickin nutjob liberals

Princess Mononoke said...

Anonymous said...
frickin nutjob liberals
November 09, 2007 6:43 PM

No one is blaming GW for those freak accidents. Duh!

However, I'm sure even YOU can agree that nobody wanted DOPEY to become "leader" of the FREE world?!? or are you one of those clones under his spell?

This is not a partisan issue for me, it's a leadership issue! GET IT?!?

Anonymous said...

Fannie, Freddie and FHA criminal enterprises were created by Franklin Dopes Roosevelt. The idiot also created the Social Security ponzi scheme that steals 7.65% of your paycheck because the government thinks YOU are too irresponsible to handle your finances. Therefore, they will spend it on pointless wars in Iraq and Bosnia and assorted pork barrel projects.

We need a balanced budget amendment right now.

Matthew said...

Fannie, Freddie and FHA criminal enterprises were created by Franklin Dopes Roosevelt. The idiot also created the Social Security ponzi scheme that steals 7.65% of your paycheck because the government thinks YOU are too irresponsible to handle your finances.

Hardy har har har.

another Ayn Rand blowing Fox News genuflecting moron.

FDR saved this nation from both Communism and the corruption and injustice of Republican hypercapitalism, as ever evident in the in the 1920's and 1990-2000's. Only maroons still fight him. Reality: He was right, you were wrong. As it was then, it is now.

The wars have NOTHING to do with FDR or Fannie mae or decent regulatory authority or classic American prudent behavior. They have everything to do with war profiteering.

BTW: We won in Bosnia. We lost in Iraq, costing 100 times as much money.

What part of "Don't get in a land war in Asia" don't they understand?

serindippity said...

Lockhart went up against Fannie and Freddie and their lobbying might when it was an extremely unpopular thing to do.

yeah?

That was during the period that the banking industry, and hence the GOP, was against the GSEs because they were getting in the way of massive private-sector profits.

It was simply capitalist banker envy.

They wanted that profit for themselves.

There wasn't any concern about stability or ethics or any such blah blah blah by the Republicans.

After all look at today---clearly it is entirely the PRIVATE SECTOR BANKS which engaged in the most egregiously stupid and risky practices, not the GSE's (restrained by traditional prudent government regulation, fortunately).

They were against GSE's because they wanted more profit for themselves, not for any ethical reason. (Just plain banking envy and greed.)

If it were otherwise, they would have advocated increased regulations on lending and underwriting to both GSEs AND private banks. Did any of them say that?

No way.

Never.

They were simply ideologically against government in all ways whenever it got in the way of their particular private-sector profit pipeline.

They can go Cheney themselves.

Anonymous said...

Fannie, Freddie and FHA criminal enterprises were created by Franklin Dopes Roosevelt. The idiot also created the Social Security ponzi scheme that steals 7.65% of your paycheck because the government thinks YOU are too irresponsible to handle your finances.

Hardy har har har.

another Ayn Rand blowing Fox News genuflecting moron.

FDR saved this nation from both Communism and the corruption and injustice of Republican hypercapitalism, as ever evident in the in the 1920's and 1990-2000's. Only maroons still fight him. Reality: He was right, you were wrong. As it was then, it is now.

The wars have NOTHING to do with FDR or Fannie mae or decent regulatory authority or classic American prudent behavior. They have everything to do with war profiteering.

BTW: We won in Bosnia. We lost in Iraq, costing 100 times as much money.

What part of "Don't get in a land war in Asia" don't they understand?

Anonymous said...

If Ron Paul had his way we wouldn't have any of these regulators at all. The cognitive dissonance you show on this matter is breathtaking.

Anonymous said...

Matthew,

FDR was classified as a commi when the bloated NWO puppet passed oppression in this once great country. And since this demon's work was done we have seem a steady destruction of the greatest nation on earth. You think FDR was fighting the Rockefellers and other "Republican hypercapitalism". Moron, he WORKED FOR THEM. And they all are still laughing all the way to the bank. I dont mind if suckers get screwed as long as their beliefs do not screw me. So, did you buy a bubble?