Housing Catastrophe Ahead: Fannie Mae Headed For Bankruptcy After Theives Stole Profits (Video, Picture)

We’re headed for another catastrophe: this ime mortgage giant Fannie Me is headed down the toilet–and how many billions of tax payer dollars will it take with it?

Hang on to your hats, people, because the rollercoaster is about to head over the cliff. Insiders say dear ole Fannie is headed over the cliff, even if it is government backed and insiders are stuffing their pockets.

The Federal National Mortgage Association (FNMA), colloquially known as Fannie Mae, was established in 1938 by amendments to the National Housing Act^[5] after the Great Depression as part of Franklin Delano Roosevelt‘s New Deal. Fannie Mae was established to provide local banks with federal money to finance home mortgages in an attempt to raise levels of home ownership and the availability of affordable housing.^[6] Fannie Mae created a liquid secondary mortgage market and thereby made it possible for banks and other loan originators to issue more housing loans, primarily by buying Federal Housing Administration (FHA) insured mortgages.^[7] For the first thirty years following its inception, Fannie Mae held a monopoly over the secondary mortgage market.^[8]

It was acquired by the Housing and Home Finance Agency from the Federal Loan Agency as a constituent unit in 1950.^[9] In 1954, an amendment known as the Federal National Mortgage Association Charter Act^[10] made Fannie Mae into “mixed-ownership corporation” meaning that federal government held the preferred stock while private investors held the common stock;^[5] in 1968 it converted to a privately held corporation, to remove its activity and debt from the federal budget.^[11] In the 1968 change, arising from the Housing and Urban Development Act of 1968, Fannie Mae’s predecessor (also called Fannie Mae) was split into the current Fannie Mae and the Government National Mortgage Association (“Ginnie Mae”).

Ginnie Mae, which remained a government organization, supports FHA-insured mortgages as well as Veterans Administration (VA) and Farmers Home Administration (FmHA) insured mortgages. As such Ginnie Mae is the only home-loan agency explicitly backed by the full faith and credit of the United States government.^[12]  MOREHERE

Fannie is holding on to a batch of iffy lons.  How could it not, when it guarantees more mortgages than anybody?  The icing on this maggoty cake is getting thin and creepinf food poisoning creeated by underlying tainted mortgages remain a danger to the taxpayers

This won’t be Fannie’s first dance with bankruptcy.

You may also remember that Fannie Mae went bankrupt during the housing crisis and was bailed out with taxpayer money.

Now, a chastened Fannie Mae continues to set policies that have a tremendous impact on the housing market. For instance, if a loan does not meet Fannie Mae criteria, a bank can’t sell the loan to Fannie Mae, making it unlikely the loan will be issued. MOREHERE

Some claim that Fannie’s in trubble–surprise!!! because theives have srtolen the profits-  and have left taxpayers holding the bag. Again:

Umm, Fannie and Freddie are doing EXACTLY what they were designed and created to do, enable housing lending to continue duing a Financial Crisis. The were created during (Fannie was) the Great Depression as banks at that time refused to lend money to people to buy housing, so there was no mobility of the workforce.

They are doing the same today, as Fannie, Freddie are about 85% of the Loan owners in America. They give banks the confidence to lend to the public, which otherwise would NOT exist (For an example, take a look at small business lending that isnt backed by the SBA, oh thats right, it doesnt exist…)

The reason Timmy boy did what he did was to steal the profits that he knew Fannie and Freddie were going to start producing (As stated in their 2nd Quarter 2012 10Qs, which was prior to the August 2012 theft)

The reason they wanted to steal the profits is so that the administration did NOT have to explain why Fannie and Freddie are making more money now, when housing is sucking wind, than the reported in the years of 2001-2007, during the height of the housing Boom.

They dont want to explain how that money was siphoned off and stolen…

And besides, if the treasury would let them, Fannie Mae could pay off every dime owed to the Feds today, and has had this ability for the last 5 years, as the “Losses” were nothing more than Fannie taking money and building loss reserves with it, funny, considering like 90% of the sub-prime that Fannie and Freddie own was “Credit Enhanced” which means it had Private Mortgage Insurance, which would make Fannie whole on whatever the difference was between the Foreclosed Sales price on the home and the amount owed on the lean… morehere

 

Looks like insiders have their hands in the cookie jar and are taking the cookies in their pockets and leaving taxpayers with the crumbs.

What’s going on with Fannie and Freddie? (The short version)
The short version is that Fannie and Freddie shareholders are outraged that the Treasury unilaterally changed the agencies’ profit distribution once they started making money. Now, 100% of both companies’ profits go straight in to the U.S. Treasury as “dividends”, meaning that the bailouts given to them during the financial crisis will never be paid back.

Naturally, shareholders think they have a solid claim to some of the profits, and it does make a lot of sense. After all, a lot of these people bought or held onto their shares when they were trading for as little as $0.10 and the agencies were left for dead by many market experts. They took the risk, now they want some of the reward. Sounds reasonable, right?

Plus, Fannie and Freddie have actually paid back more to the Treasury already than they received in the bailouts. In fact, as of the most recent quarterly earnings report, the Treasury has received $225 billion in “dividends”, which is about $37 billion more than the amount of the bailouts. Shareholders seem to think that’s enough.  MOREHERE