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Ed Pinto: Fannie and Freddie accept responsibility for misleading investors

rcwhalen's picture




 

Latest from Ed Pinto, who piles on the blame the GSEs argument with some new data and analysis in The American, AEI's online magazine. This will not help the cognitive illusion being so skillfully maintained by our friends Barry Ritholtz and Joe Nocera, who still cannot bring themselves to admit that Wall Street runs the GSEs just like a private SIV. Lawyers and first loss exposure is the only difference. Meanwhile as we note in the IRA this week, Leland Miller: The Crisis Ahead for China's Policy Banks, with a comment about Chinese GSEs, the problem of public debt used to drive make believe economic growth is also an issue in Beijing. Chris

The American

Cleaning House: The Financial Crisis and the GSEs

By Edward Pinto edward.pinto@aei.org

Tuesday, December 20, 2011

Disclosures contained in SEC complaints further validate the necessity to look behind Fannie and Freddie’s characterization of subprime loans.

Late last week, the Securities and Exchange Commission charged the former executives of Fannie Mae and Freddie Mac with systematically misleading shareholders by grossly underestimating the levels of subprime and Alt-A loans in their single-family loan guaranty portfolios. Current management of Fannie and Freddie have agreed to cooperate with the SEC and to accept their findings, but they are not admitting wrongdoing for misleading investors about their firms’ exposure to troubled mortgages.

I have used new information from the complaints to update the totals contained in my related paper Government Housing Policies in the Lead-up to the Financial Crisis: A Forensic Study. Fannie and Freddie are now estimated to have had a combined $2 trillion in high-risk loans and securities, amounting to 42 percent of their total single-family mortgage guarantees and investments.

Fannie and Freddie entered into agreements accepting responsibility for misleading conduct discovered by the SEC, including:

1. As of June 30, 2008, Freddie had $244 billion in subprime loans, while investors were told it had only $6 billion in subprime exposure.

a. Freddie knew it was inadequately compensated for the risks it was taking. For example, it was taking on “subprime-like loans to help achieve [its] HUD goals” that were similar to private fixed-rate subprime, but the latter typically received “returns five to six times as great,” says the complaint.

b. Freddie had concerns about risk layering on loans with an LTV >90% and a FICO <680. (Yet, in Freddie’s disclosures it only noted risk layering concerns on loans with an LTV >90% and a FICO <620. This is a major difference since only 10 percent of its loans fell into the LTV >90% and a FICO <620 category, while nearly half fell into the LTV >90% and a FICO <680 one.)

2. As of June 30, 2008, Fannie had $641 billion in Alt-A loans (23 percent of its single-family loan guaranty portfolio), while investors were told it had less than half that amount ($306 billion, or 11 percent of its single-family loan guaranty portfolio).

3. The SEC complaint disclosed that Freddie had a coding system to track “subprime,” “other-wise subprime,” and “subprime-like” loans in its loan guaranty portfolio even as it denied having any significant subprime exposure.

These suits are important because they demonstrate that Fannie and Freddie “told the world their subprime exposure was substantially smaller than it really was … and mislead the market about the amount of risk on the companies’ books,” said Robert Khuzami, director of the SEC’s Enforcement Division.

The government-sponsored enterprises also misled the world about the massive buildup of risk in the mortgage market as Fannie and Freddie, starting in 2001, accounted for about half of all outstanding single-family first mortgages. By mid-2008, more than 40 percent of their loans had risky characteristics. It was this unprecedented accumulation of weak and risky mortgages that precipitated the collapse of housing and mortgage markets and the ensuing financial crisis.

When the financial crisis hit in full force in 2008, approximately 27 million, or 49 percent, of the nation’s 55 million outstanding single-family first mortgage loans had high-risk characteristics, making them far more likely to default.

The SEC’s disclosure regarding Freddie’s coding system for subprime loans is particularly important. In 2010, I released Government Housing Policies in the Lead-up to the Financial Crisis: A Forensic Study, cataloguing research I began in 2008. One of my goals was to document the accumulation of non-traditional mortgages in the housing finance system, and to look behind Fannie and Freddie’s misleading disclosures and nomenclature to see actual risks.

The SEC’s disclosure debunks criticism leveled by David Min of the Center for American Progress and others against my analysis of the nature of the mortgage crisis. Min’s central objection was that I used “radically revised definitions for … subprime and Alt-A mortgages.”

In the Forensic Study, subprime loans were defined as those with a FICO score of less than 660. Min described this as a “radical definition” of subprime as it resulted in Freddie’s loan guaranty portfolio having $243.3 billion in subprime loans at June 30, 2008. It now turns out to be virtually identical to the subprime loan total of $244 billion that the SEC calculated. This should come as no surprise, as Freddie, in an August 1995 industry letter, set a 660 FICO as the score for an investment grade loan.1

Interestingly, Fannie’s subprime loans, defined using the same <660 FICO definition, performed even worse than Freddie’s subprime loans.

Fannie’s risk exposures related to Alt-A loans (23 percent, based on SEC complaint), subprime loans (14.8 percent, based the Forensic Study definition), loans with LTVs >90% (10.4 percent, based on Fannie’s disclosure), and subprime and Alt-A private mortgage backed securities (2.4 percent, based on Fannie’s disclosure) totaled 43 percent of Fannie total single-family mortgage investments.2 This percentage is even higher than the 39.5 percent estimate contained in my study.

The disclosures contained in the SEC complaints further validate the necessity to look behind Fannie and Freddie’s characterization of loans.

Why would Freddie and Fannie guarantee risky loans like subprime even though they were being inadequately compensated? The answer: these loans were necessary to meet affordable housing goals.

My American Enterprise Institute colleague Peter Wallison, in his Financial Crisis Inquiry Commission dissent, cited Fannie data showing loans with a FICO <660 that met the low- and moderate-income goal grew from 38 percent in 1996 to 56 percent in 2006. The percentage meeting the special affordable base goal grew from 12 percent in 1996 to 26 percent in 2006.

In a 2000 rulemaking, the Department of Housing and Urban Development pushed Fannie and Freddie “to play a significant role in the subprime market.” HUD went on to add “the line between what today is considered a subprime loan versus a prime loan will likely deteriorate, making expansion by the GSEs look more like an increase in the prime market … This melding of markets could occur even if many of the underlying characteristics of subprime borrowers and the market's (i.e., non-GSE participants) evaluation of the risks posed by these borrowers remain unchanged … Lending to credit-impaired borrowers will, in turn, increasingly make good business sense for the mortgage market.”

HUD nailed this one (except for the “good business” part). Was this mere prescience or an invitation to Fannie and Freddie to mislead investors?

Edward Pinto is a resident scholar at the American Enterprise Institute.

FURTHER READING: Pinto also writes “Senate Undermines Obama—and the Country—on Housing,” “Government Housing Policy: The Sine Qua Non of the Financial Crisis,” “Housing Affordability: U.S. Is the Envy of the Developed World,” and “How the TBA Market Would Function for Privately Issued Mortgage-Backed Securities.” Peter J. Wallison contributes “How Regulators Herded Banks into Trouble” and “Fannie, Freddie Caused the Financial Crisis.”

Footnotes

1. S&P Structured Finance Ratings, January 1997, p. 14

2. Percentage takes into account loans with overlapping characteristics.

Image by Rob Green | Bergman Group

 

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Tue, 12/20/2011 - 16:02 | 1998616 Steve in Greensboro
Steve in Greensboro's picture

For you libtards out there, let me make it very clear. There would not have been a financial crisis in 2008 had it not been for the actions of the U.S. government. Wallison's and Pinto's research makes it painfully clear that without the efforts of Fannie and Freddie and their leftist accomplices, Barney Frank, Maxine Waters, Franklin Raines, et al there would not have been a housing bubble the collapse of which precipitated the 2008 collapse.

There are two elements to the solution. 1) Shut down Fannie and Freddie permanently. 2) Take the management of the supply of USD out of the hands of the U.S. government and turn it over to a currency board whose charter is to fix its value in terms of a basket of commodities.

Tue, 12/20/2011 - 16:40 | 1998781 NotApplicable
NotApplicable's picture

You surely realize the libtards of which you speak do not frequent here?

*looks at comment up/down votes*

Ok, maybe one, LOL.

Tue, 12/20/2011 - 15:32 | 1998498 Esculent 69
Esculent 69's picture

If you want to see how fraudulent Fannie and Freddie were just go read the OFHEO report that describes in detail how the execs were manipulating the numbers for their personal financial benefit. Franklin Raines, Jamie Gorelick, all democrats. Barney Frank, Maxine Waters were attacking the regulator Armando Falcone Jr. for shedding light and asking for more strict regulation of the GSE's. Maxine Waters husbands bank was givien $12 million of bailout money,  and what exactly did happen to those ethics charges.  This is all the government doing, and it is purposeful. What is the first plank of Communism?  Abolish private propery. What better way to do that then to taint the entire market while having a vast majority of the loans to go into foreclosure only to be owned by the GSE's or banks that have a boot on their necks by the government on who does and who doesn't get a loan. Not to mention that some of these loans are help by foreign investors.  Wacca Wacca.

Tue, 12/20/2011 - 15:39 | 1998493 sasebo
sasebo's picture

All these greedy assholes have got their's comimg --------- just elect Dr. Ron Paul to make sure they get it ------

Romney & Ginrich are just white Obamas.

Tue, 12/20/2011 - 15:17 | 1998436 Snakeeyes
Snakeeyes's picture

Whalen and Pinto make some good points. But it does really boil down to HOW subprime is defined. Pinto uses a strict definition. 

SEC Versus Fannie’s Mudd and Freddie’s Syron: It Boils Down to the Definition of Subprime

http://confoundedinterest.wordpress.com/2011/12/19/sec-versus-fannies-mu...

 

Tue, 12/20/2011 - 15:21 | 1998435 Esculent 69
Esculent 69's picture

Consfearacy by Slayer

I need to redefine 

all the things I hate today

Politics that fail 

from a President derailed

I hate the shitty economy 

it might as well be sodomy

I know that in the end 

that i'm expected to pretend

But I can't relate 

to your literal idiocy

No one's in control 

when the government is the enemy

So lite the fuse

Impose your views

Consfearacy is anarchy

Actions of hostility

Breeds conformity

Annihlation will begin

Extermination from within

so lite the fuse

impose your views

consfearacy 

insanity

I need to redefine 

how i see the world today

Seems the last war 

didn't even up the score

It's only mind pollution 

there is no resolution

still i know that in the end

i'm expected to pretend

that i can't think for myself 

living off someone else

halfhearted smile 

while you look the other way

i can't relate 

to your verbal idiocy

no one's in control

when the government's the enemy

ENEMY!

So lite the fuse

impose your views

Consfearacy

COMPLACENCY IS YOUR DEMISE!!!!!!!!!!!

Merrrrry New Year

 

 

Tue, 12/20/2011 - 15:22 | 1998378 Esculent 69
Esculent 69's picture

Its funny how this guy writes a book about how the senate undermined obama and the country of housing. do you think this guy knows that in 2008, senator Obama was the #2 recipient of campaign cash from fannie/freddie. #1 was chris dodd (senator and democrat) who was head of the senate banking committee and was involved in the countrywide scandal with angelo mozillo. He got a great deal on his mortgage through a friends of angelo program. go look at james johnson who along with the clinton admin help create not only the subprime loans, but the mbs, derivatives as such to goldman sachs and others to give value to worhtless paper. go look at the former fannie execs who also worked at goldman. just a coincidence? Jon Corzine democrat gov and senator of Joyzee who MF'd everyone was Obama and Biden's go to guy on the financial crisis, CYA.  And lastly, Fannie Mae traded on the NYSE and the execs at the GSE's were manipulating the data to meet their maximum  bonuses as well as to meet the affordable housing goals. Fannie couldn't care less when they were the gov't and giving an implicit guarantee that these loans would be bailed out. 

Tue, 12/20/2011 - 14:57 | 1998359 SwingForce
SwingForce's picture

In March 2008 I stopped paying my mortgage with Suntrust. In December 2008 it was transferred to FNMA.

Tue, 12/20/2011 - 15:14 | 1998419 chunga
chunga's picture

Thats a big no no right there.

See what I mean about the plan to privatize the gains and dump the losses on the taxpayer?

Is the MERS Secret Electronic Mortgage Society involved? If so you may want to read this.

SunTrust MERS Consent Order !

Now they wanna make deals that make all their legal transgressions "go away" along with the fucked chain of title.

If you get one of these...don't sign it.

tOO BiG To fAiL LOan MOdIFiCATioN FOrm r.1.A.002.B.XXXX

"By reading this document, which may change or be withdrawn without notice, you waive any and all rights you may or may not have, past, present, and future and unequivocally agree to the following terms under pain of Death."

 

Tue, 12/20/2011 - 14:54 | 1998343 Esculent 69
Esculent 69's picture

or hanging from a rope

 

Tue, 12/20/2011 - 13:38 | 1998003 ebworthen
ebworthen's picture

 

 

Culture of corruption

Seed of greed

Willful destruction

Societal bleed

Tue, 12/20/2011 - 12:25 | 1997745 David Fiderer
David Fiderer's picture

"Disclosures contained in SEC complaints further validate the necessity to look behind Fannie and Freddie’s characterization of subprime loans."

OK, but what about the necessity of looking at loan performance--losses, deliqnuencies, default rates? What about the necessity to compare GSE loan performance with that rest of the mortgage market? That's what the FCIC did when it eviscerated Pinto's "research":

http://fcic-static.law.stanford.edu/cdn_media/fcic-docs/2010-08-09%20FCI...

That's what David Min did when he eviscerated Pinto's "research":

http://www.americanprogress.org/issues/2011/02/pdf/pinto.pdf

And that's what the Pinto/Wallison crowd refuse to do, because they cannot deal with the truth. GSE loan performance is about three times better than the rest of the mortagage market, which is why their "theory" about the financial crisis cannot withstand scrutiny.

And nothing in the SEC complaint suggests that the GSE's loan overall loan performance has been any worse than what has been reported over the past four years.

Finally, the SEC complaint debunks the Pinto theory about the GSEs leading the way into the subpriem and Alt-A markets. The SEC confirms what the FCIC found, that the GSEs were late to the game, follwers who were trying to recapture lost market share.

Tue, 12/20/2011 - 13:35 | 1997996 ghostfaceinvestah
ghostfaceinvestah's picture

Another thing Pinto fails to mention is the role of the private mortgage insurers, which is convenient given his organization was paid by one such insurer to promote the industry.

Under their charters Fannie and Freddie cannot guarantee a mortgage with less than 20% down without credit enhancement, almost always in the form of private mortgage insurance.

So in order to take on this risk, F&F needed the support of the private MI industry.  Think about it - without private mortgage insurance, Fannie and Freddie couldn't have insured a single loan above 80LTV.

Now, of the 7 active MIs during the bubble, three are in runoff with two of those unable to pay all their claims (and probably more to come).

The whole setup between the GSEs and the MIs is a farce that continues to this day, but yet Pinto and Wallison recently wrote a paper, paid for by Genworth, the support the MI industry.

 

Tue, 12/20/2011 - 13:53 | 1998069 David Fiderer
David Fiderer's picture

It's also worth remembering that the GSE guidelines dictated that whenever a loan had an LTV higher than 80%, then the GSE risk exposure must be below 80%. For instance if a mortagge had an 85% LTV, the GSE's uninsured risk exposure was 72%.

http://georgiaappraiser.com/pdf/FNMAUnderwritingGuide.pdf

Tue, 12/20/2011 - 12:15 | 1997721 Lmo Mutton
Lmo Mutton's picture

Banksters are exempt from all legal implications.

Get back to work serfs.

Tue, 12/20/2011 - 12:14 | 1997717 tony bonn
tony bonn's picture

this article was really a fine piece of analysis and much appreciated especially so since it documents the link between corrupt government policy (affordable housing for even ninjas) and spineless clueless gse "leaders" who rode the banana peel down the peter coffin staircase....

fuck the banksters who promoted it....

Tue, 12/20/2011 - 11:51 | 1997642 rawsienna
rawsienna's picture

Question to Ed

What about all the exposure to subprime and alt a in the investment portfolios.  It is my understanding that FANNE in particluar was very aggressive in purchasing the AAA tranches from most subprime backed private label MBS (perhaps as much as 250bb at Libor + 25 spreads) and took massive losses.  Alhough the bonds were rated AAA at the time (now many are rated D), it DOES count as subprime exposure becasue it was backed by subprime loans. Freddie did similar in the CMbs market..  These guys DID NOT dsiclose this to congress when asked as well as misleading investors.

Tue, 12/20/2011 - 11:35 | 1997589 newstreet
newstreet's picture

But Raines remains untouchable.

Tue, 12/20/2011 - 13:47 | 1998048 Bob Sacamano
Bob Sacamano's picture

Until they get Franklin Raines no justice will be done.....but he is untouchable for some obvious reasons.

Tue, 12/20/2011 - 11:53 | 1997654 rawsienna
rawsienna's picture

As will Corzine. 

Tue, 12/20/2011 - 11:42 | 1997625 prains
prains's picture

That's not what my wife says

Tue, 12/20/2011 - 11:28 | 1997573 Sweet Chicken
Sweet Chicken's picture

Can somebody please tell me when we get to hang all these mother fuckers!?!?!?!?

Tue, 12/20/2011 - 11:13 | 1997535 MrBoompi
MrBoompi's picture

Fannie and Freddie were a very small percentage of the subprime and Alt-A markets until they saw the enormous profits that were being made by the other mortgage securitization firms.  Then they increased their holdings of these mortgages as well.  F/F is being singled out for doing what others are doing as we speak, refusing to mark-to-market and holding bad debt "off balance sheet".  Where do you think all the new high-risk loans on their books came from, Santa Claus?  Wall St is using F/F as a toxic waste dumping ground.

But now we're talking about the unholy partnership of government and Wall St.  They've done NOTHING but protect each other's asses for 4 years.  There is still not enough capital to go around, even after years of fraudulent activity.  Even if this suit is successful, you'll see the same approach, a small fine relative to the profiteering, and no admittance of guilt.  Well, maybe they'll appear to act "tough" this time and make somebody actually admit they did something wrong.  But I guarantee whatever they do won't harm any of the Wall St gang.

Tue, 12/20/2011 - 13:35 | 1997999 GCT
GCT's picture

No they lined the politicians pockets to look the other way starting with Barney Franks.  But thats ok they still give the incompetant CEO's yearly salaries more then some of us will make in a life time.  I am all for capitalism but not stealing from the taxpayers that subsidize Freddie and Fannie.  They ought to be capped at 150 k or even better get the scoundrels that did this and put them in jail. 

Tue, 12/20/2011 - 11:11 | 1997527 Ancona
Ancona's picture

We're so sorry we fucked you up the ass. Can you please forgive us?

Tue, 12/20/2011 - 10:28 | 1997373 GMadScientist
GMadScientist's picture

Because nobody was making private-label sausage right alongside them?

Lulz.

Tue, 12/20/2011 - 09:26 | 1997185 Widowmaker
Widowmaker's picture

They lied, cheated, and stole. It's a gov sponsored racket, executed on the backs of poor, Middle class taxation, and vulnerable. Incorporated fraud and theft from top to motherfucking bottom!

No accountability, no punishment, not even a fucking "we're sorry."

These guys deserve every record bonus, every asset stripped from them, and then blacklisted from the industry. Every last injust cock sucking one of them. I want their mommys to see their names and faces tarred and feathered on TV.

It's bullshit from top to bottom, and it should be blatantly obvious there is continued collusion and monopolistic market coverup to this second.

I'm ashamed to be an American. Shame shame shame on these fucks in pinstripes. Shame on the system in its entirety. No wonder " terrorists " hate the US, we deserve it!!!

History will reflect these fucks broke the US's spine for future generations.

Destroy them.

Tue, 12/20/2011 - 10:47 | 1997434 chunga
chunga's picture

+30 trillion and counting.

Like the guy from Ohio said while they were walking by a bunch of homes slated for demolition on 60 Minutes.

"The money was looking for people". You could get a loan in the drive-thru, or if that was too much trouble, they'd come to you and do the closing at your house.

I guess now would be a good time to shoot the greedy homeowners.

It’s crystal clear. From the very beginning the homeowners have gamed the system. They started by tricking the property appraiser (lender’s agent) into submitting an outcome-based appraisal.

Then, millions of homeowners shrewdly conned the “lenders” into dismissing all agency and fiduciary responsibility in the underwriting process….going so far as to force the “lenders” into forging documents.

Then, the greedy homeowners forced the “lenders” to securitize the loan in such a fashion as to bifurcate the mortgage from the note.

On top of that, the homeowners secretly cooked up the concept of “Credit Default Swaps” and forced the “lenders” to insure the collateral at the full (outcome based) value 30X over.

Having successfully pulled the wool over everyone’s eyes – these irresponsible homeowners showered themselves with well deserved bonuses.

Realizing they were too big to fail, these irresponsible, reckless homeowners lined the pockets of legislators and received enormous sums of taxpayer bailouts.

The result of these cunning maneuvers by the fraudulent homeowner scheme has them sitting fat and happy in the cat birds seat. Yup, that’s how they did it. And they’re getting away with it.

Savings drained – check, 401ks all gone – check. Kicked out of their homes – check. “Lenders” made whole many times over via Credit Default Swaps – check. Homeowners foreclosed and “lender” buys back property for pennies on the dollar – check.

Follow the money and you’ll find the culprit. It’s about time we hold these homeowners accountable.

All of this was done under the guise of helping the "little guy", minorities, etc. Thats all bullshit.

Good call. The websites below are sponsored by a well-healed, politically connected, PR machine of greedy volunteers… and contain detailed information on how the collusion on Main Street has ripped off Wall Street.

Don’t look though… it’s just spam.

http://www.4closurefraud.org

http://www.foreclosurehamlet.org

Tue, 12/20/2011 - 13:31 | 1997984 ebworthen
ebworthen's picture

Nicely spiced sarcasm.

Yes, those wily homeowners with their MBA's, wool suits, and silver spoons.

Tue, 12/20/2011 - 13:36 | 1998001 chunga
chunga's picture

thanks

Tue, 12/20/2011 - 10:42 | 1997427 DeadFinks
DeadFinks's picture

The great big brains that "lead" us tinker with our lives like it's game.  Who pays when they fuck up, line their pockets with our money and cover their cronies' asses?  We do. Why? Because they were only doing it for our own good.(/s) Fucking crooks, all of them.

Tue, 12/20/2011 - 09:32 | 1997200 Blue Water
Blue Water's picture

This was bad governmental policy plain and simple.  Push as many people to buy a home as possible, regardless of the consequences.  Congress started it all with the CRA regulations, and HUD policies that required lending to low to moderate income regardless of qualification.  Once lending standards started to depend on demographics rather than ability to pay, the housing market was doomed.

Tue, 12/20/2011 - 13:32 | 1997985 Clark Bent
Clark Bent's picture

Demographics means politically useful constituency. This is the alternative approach to Constitutional liberty. 

Tue, 12/20/2011 - 11:03 | 1997503 chunga
chunga's picture

The CRA was a red-herring.

Do you really believe anybody in DC gives a fuck about minorities and low income people? How can you steal money from someone who doesn't have any?

It's easy. Just give it to them, then insure the ass off of it. All the intermediaries KNEW it would be backstopped by the GSEs. So they whipped out the TBTF card, partied on, and created a situation where we'd all be pointing fingers at each-other. The poor minorities fucked up the world economy. The pinstriped ponzi players are flush with cash.

 

Tue, 12/20/2011 - 14:19 | 1998194 Clark Bent
Clark Bent's picture

"helping the underprivileged" is the cover story of choice to obtain the power to seize assets from those who actually produce them, and then disseminate them as is most politically useful. Some of this goes to the ignorant poor to prime the pump for the next round of seizures as you can explain that the first seizure was useful, but underfunded. Now more is needed. You also get payola to garner the support of the Reverend Wrights who cajole the wholly ignorant into supporting candidates that are supposed to care about the underpriviliged. The Honorable Reverend has to deliver the votes which he does by telling his credulous followers that the CIA invented AIDS to kill black people and Obama, Rahm Emanuel, or whomever is going to put a stop to that. Then the media spins it all to enhance their own opportunities to segue into governmental positions and break bread with the elite. All of this works very well, and all inside know what their roles are to continue the game. 

Tue, 12/20/2011 - 09:49 | 1997257 Benjamin Glutton
Benjamin Glutton's picture

this policy was not a systemic problem until BANKS sought ways around proper lending standards. this is the wrong place to tell half truths.

 

sell that tripe to Yahoo sheep!

Tue, 12/20/2011 - 14:24 | 1998224 Clark Bent
Clark Bent's picture

Get the sequence right, banks are regulated by government. They are also protected from garrulous mobs filling their lobbies and screaming "racism!" and threatening employees at their homes. Or, the government decides not to protect them from this activity and community organizers like Obama have careers. Once the government corrupted the banks, the banks were fiull of corrupt persons who made their loot from more exciting gambits than earning interest. In tunr these risky-to-criminal players were overlooked by government regulators who kow-towed to the shrill swindlers in Congress like Barney Fwank. And the Jamie Gorelicks, Franklin Raines's, and Rahm Emanuels all got jobs at the banks while Goldman Sachs alumni populated the halls of government. 

Tue, 12/20/2011 - 09:00 | 1997150 Northeaster
Northeaster's picture

Reads like a "covering my ass" letter.

Tue, 12/20/2011 - 08:12 | 1997082 Everybodys All ...
Everybodys All American's picture

Is it too soon to close the entire department at HUD? When a crime has been comitted to this degree it's time to close the entire enterprise. 

Tue, 12/20/2011 - 10:40 | 1997415 metastar
metastar's picture

Accepting responsibility means doing time.

Do NOT follow this link or you will be banned from the site!