The New York Times wrote five years ago on September 11, 2003:
The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.
Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.
The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.
The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac — which together have issued more than $1.5 trillion in outstanding debt — is broken. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates.
The article goes on to detail how Republicans supported the reform legislation, but Democrats caving to Home Builders Associations killed the bill before it had a chance to pass.
"These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ”The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”
Representative Melvin L. Watt, Democrat of North Carolina, agreed.
”I don’t see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,” Mr. Watt said.
Why would the Democrats block this bill ?Because they thought it would affect lower income people who wouldn't be able to afford housing. Hello....they couldn't afford it and now they are going through foreclosure. That is a much better option for the poor. You know what else the Democrats blocked five years ago......................A COMPREHENSIVE ENERGY PLAN.
And it looks like the one that they are currently offering up is in name only. Yes, they will open up the Outer-Continental Shelf for drilling, but only the areas that do not have any known oil reserves (50 miles off the coast). It puts a wind-fall profit tax on "big" oil companies. So basically they are going to give them new areas to drill without oil and at the same time tax them on their earnings. Do you really believe that will inspire them to drill more? Do they not understand this is our national security at risk?
Why is it the Democrats are ready to bail out Freddie/Fannie with tax payer money, but when companies make a profit they are evil? Isn't that ass backwards? You don't reward failing companies and punish companies that are succeeding!
Update: As of tonight, the House of Representatives passed their "NO REAL ENERGY/ENERGY PLAN"!
Update2: Thanks to one of my comments and some visitors from noquarter, I was able to find the quote from John McCain in 2006 that predicted this crisis was in the works. I thought Obama said that McCain doesn't get the economy:
.It appears that not only did John McCain get it, but he got it before anyone else. It kind of reminds me of another issue that he was out in front of.....oh yeah.....the surge in Iraq. Where is the MSM on this? As usual, non-existent.
The OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulator’s examination of the company’s accounting problems. This report comes some weeks after Freddie Mac paid a record $3.8 million fine in a settlement
with the Federal Election Commission and restated lobbying disclosure reports from 2004 to 2005. These are entities that have demonstrated over and over again that they are deeply in need of reform.
For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac–known as Government-sponsored entities or GSEs–and the sheer magnitude of these companies and the role they play in the housing market. OFHEO’s report this week does
nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO’s report solidifies my view that the GSEs need to be reformed without delay.
I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie
Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole