Banks Want Pieces of Fannie-Freddie Pie
By LOUISE STORY
As the Obama administration prepares a report on the future of Fannie Mae and Freddie Mac, some of the nation’s largest banks are offering a few suggestions.
Wells Fargo and some other large banks would like private companies, perhaps even themselves, to become the new housing finance giants helping to bundle individual mortgages into securities — that would be stamped with a government guarantee.
The banks have presented their ideas publicly through trade groups. Housing industry consultants and people familiar with recent meetings at the Treasury Department say these banks view the government’s overhaul of the mortgage market as a potential profit opportunity. Treasury officials have met with executives from several institutions, including Wells Fargo, Morgan Stanley, Goldman Sachs and Credit Suisse, according to a public listing of the meetings.
The administration’s report, to be released later this month, is expected to be sweeping and could address basic questions like whether a government guarantee is needed at all for middle-class homeowners. While other arms of the government are dedicated to making loans available to lower-income borrowers, Fannie and Freddie have helped lower rates for the bulk of homeowners. Some Republicans are trying to narrow this broad role, and on Thursday, several conservative researchers released a proposal on how to do so. But banks, for their part, have told the administration that removing the guarantee would wipe out the widespread availability of the 30-year mortgage, fundamentally reshaping the American housing market. Though some other countries do not promote long mortgages, some analysts warn that such a change would be devastating to the market here. At firms like Goldman, analysts are predicting that a government guarantee on a broad swath of mortgage securities will survive in some form.
A spokesman for the Treasury declined to comment on the administration’s plans, but one former Treasury official warned against the banks’ proposal.
“I don’t think that private shareholder-owned entities should issue federal government guarantees,” said Michael S. Barr, who worked on housing issues at the Treasury Department until the end of last month and then returned to his job as a law professor at the University of Michigan. “I think that creates the same conflict we had in the past.”
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The banks want that action, but read what William Black says:
http://neweconomicperspectives.blogspot.com/2011/01/fannie-and-freddies-managers-bought.html
Who gives a flying *&%$ WHAT the banks “want”. I sure don’t!
Fannie/Freddie are all of the banks/servicers. They just assume different identities to carry out their fraud. A true white collar criminal enterprise. The shadow knows.
Has anyone ever heard of the song Big Balls by AC/DC? I think they wrote that song about ALL of them. That should be their National Anthem.
These Banksters are soo deceptive about what they do. Wikileaks has not come out with those leaks yet about BOA. It must be big. Who would have thought that leaks about a bank could be such a big deal. I could see if it was a national security issue but this is a bank, not a defense dept. secret. This is very suspicious. This has alot of people wondering what could possibly be in that hard drive?
All banks should be private entities and not be Government owned. That is how the Gov. may own and control all of us by controlling the banking system. The Gov. should not be allowed to control and manipulate the currency through corporations on wall street like the FED RESERVE which operates through Goldman Saks, Aig and many other stock market symbols. This is why wall street is their pal. Everything is rigged in their favor, not ours.
Take out the government guarantee, purchase everything at fair market value, assume all liabilities, and that sounds great.
Leave in the guarantee, and sell the notes below the price a non-subsidized arms-length buyer would pay, and it sounds like a backdoor mega-bailout that’s a set-up for another housing bust, probably because that’s exactly what it is.