Mortgage Servicing Fraud
occurs post loan origination when mortgage servicers use false statements and book-keeping entries, fabricated assignments, forged signatures and utter counterfeit intangible Notes to take a homeowner's property and equity.
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Nye Lavalle

Freddie, Fannie Failure Could Be World `Catastrophe,' Yu Says
By Kevin Hamlin

Aug. 22 (Bloomberg) -- A failure of U.S. mortgage finance companies Fannie Mae and Freddie Mac could be a catastrophe for the global financial system, said Yu Yongding, a former adviser to China's central bank.

``If the U.S. government allows Fannie and Freddie to fail and international investors are not compensated adequately, the consequences will be catastrophic,'' Yu said in e-mailed answers to questions yesterday. ``If it is not the end of the world, it is the end of the current international financial system.''

Freddie and Fannie shares touched 20-year lows yesterday on speculation that a government bailout will leave the stocks worthless. Treasury Secretary Henry Paulson won approval from the U.S. Congress last month to pump unlimited amounts of capital into the companies in an emergency.

China's $376 billion of long-term U.S. agency debt is mostly in Fannie and Freddie assets, according to James McCormack, head of Asian sovereign ratings at Fitch Ratings Ltd. in Hong Kong. The Chinese government probably holds the bulk of that amount, according to McCormack.

Industrial & Commercial Bank of China yesterday reported a $2.7 billion holding. Bank of China Ltd. may have $20 billion, according to CLSA Ltd., the Hong Kong-based investment banking arm of France's Credit Agricole SA. CLSA puts the exposure of the six biggest Chinese banks at $30 billion.

`Beyond Imagination'

``The seriousness of such failures could be beyond the stretch of people's imagination,'' said Yu, a professor at the Institute of World Economics & Politics at the Chinese Academy of Social Sciences in Beijing. He didn't explain why he held that view.

China's government hasn't commented on Fannie and Freddie.

Yu is ``influential'' among government officials and investors and has discussed economic issues with Premier Wen Jiabao this year, said Shen Minggao, a former Citigroup Inc. economist in Beijing, now an economist at business magazine Caijing.

Investor confidence in Fannie and Freddie has dwindled on speculation that government intervention is inevitable. Washington-based Fannie has fallen 88 percent this year, while Freddie of McLean, Virginia, has slumped 91 percent.

Paulson got the power to make purchases of the two companies' debt or equity in legislation enacted July 30 that was aimed at shoring up confidence in the businesses. He has said the Treasury doesn't expect to use that authority.

The two companies combined account for more than half of the $12 trillion U.S. mortgage market.

To contact the reporter on this story: Kevin Hamlin in Beijing on khamlin@bloomberg.net;

Last Updated: August 22, 2008 06:09 EDT

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aslo2E01QVFI

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connect the dots
I have a good idea!!!!!!!!!!!

Let's let the chinese investors show the Securitizers how Tiananmen Square works. 

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BISHOP
FANNIE AND FREDDIE ARE IN EXISTENCE AT THIS TIME ONLY BECAUSE OF SPECIAL LEGISLATION BASED BY CONGRESS WITHIN THE LAST MONTH AND ONE HALF THAT AUTHORIZES THE FEDERAL RESERVE TO ALLOW THEM ACCESS TO THE FEDERAL RESERVE BORROWING WINDOW SHOULD THEY NEED FUNDS FOR EQUITY.

THE LEGISLATION WAS NECESSARY TO INSURE THAT THE MORTGAGE NOTES THAT WERE THE UNDERLYING COLLATERAL FOR THE SECURITIES PORTFOLIOS THAT WERE SOLD TO MANY FOREIGN INVESTORS, HEDGE FUNDS AND CENTRAL BANKS OF FOREIGN COUNTRIES COULD BE RE--PURCHASED BY FANNIE AND FREDDIE TO MITIGATE THE FRAUD PERPETRATED BY THE GOLDMAN SACHS, LEHMAN BROTHERS, ET AL, WHEREIN THE SECURITIZER HAD SOLD AND RE-SOLD THE NOTE SEVERAL TIMES OVER.

CONGRESS ABETTED THE FRAUD BY THEIR "EMERGECNY LEGISLATION" WHEREIN THE U.S. GOVERNMENT IN EFFECT UNDERWROTE THE FRAUD.

THE FRAUD COMES IN WHEREIN THE SECURITIZER, THE RATINGS FIRM (THAT RATED THE VARIOUS PORTFOLIOS AS "AAA" OR "AA" WHICH IN EFFECT LULLED THE PURCHASER OF THE MORTGAGE P0RTFOLIO INTO BUYING PAPER THAT WAS ESSENTIALLY WORTHLESS SINCE THE ONLY "INCOME STREAM" UPON WHICH THE THE INTEREST DERIVED FROM THE NOTES WERE THE NOTE'S DEBTORS...THE INDIVIDUAL HOMEOWNER.

HAD FANNIE AND FREDDIE FAILED DUE TO AN INADEQUATE SUPPLY OF CAPITAL, THE BOND HOLDERS WOULD HAVE BEEN ON THE HOOK TO MAKE GOOD ON THE FRAUDULENT PAPER SHOULD THERE HAVE BEEN JUDGMENT ENTERED IN FAVOR OF THE BUYERS OF ALL OF THE FRAUDULENT NOTES.

THE CONGRESSIONAL EMERGENCY LEGISLATION, IN EFFECT, BAILED OUT THE BOND HOLDERS.

THE IRONY IS THAT IT IS VERY POSSIBLE THAT THE CHINESE CENTRAL BANK MAY BE SUBSTANTIAL HOLDERS OF FANNIE AND FREDDIE BONDS. OR, ALTERNATIVELY, MANY HEDGE FUNDS, OF WHICH MANY WEALTHY INDIVIDUALS HERE IN THE U.S. HAVE EQUITY POSITIONS IN, COULD HAVE ALSO BEEN SUBSTANTIAL HOLDERS OF FANNIE AND FREDDIE BONDS.

BY ALLOWING FANNIE AND FREDDIE TO FAIL ....THE OUTCOME WOULD BE THAT THE CHINESE CENTRAL BANK WOULD BE ON THE HOOK TO MAKE GOOD ON THE BAD PAPER SINCE THEY HELD THE BONDS. SHOULD IT BE SHOWN THAT THE CHINESE CENTRAL BANK WAS A BOND HOLDER OF FANNIE AND FREDDIE AS WELL AS A BUYER OF PORTFOLIOS OF MORTGAGE BACKED SECURITIES, THE NET EFFECT WOULD BE THAT ONE HAND WOULD HAVE BEEN WASHING THE OTHER... A ZERO SUM GAME. AND THE U.S. TAXPAYER WOULD BE THE BAILSMAN THAT BAILED THE FRAUDSTERS OUT OF THEIR OWN PONZI SCHEME GONE BAD. THE FEDERAL RESERVE (WHO WAS THE REGULATOR SINCE 1994 OVER FANNIE AND FREDDIE...BESIDES THE OFFICE OF FEDERAL HOUSING ENTERPRISE OVERSIGHT) IS THE FOX, AND THE U.S. TAXPAYERS ARE THE CHICKENS IN WHICH THE U.S. CONGRESS HAS AUTHORIZED THE FEDERAL RESERVE TO TAKE UP RESIDENCE IN THE HENHOUSE.




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Inside CIA
What do you mean Fannie Mae and Freddie Mac debt, heck they own control of the Federal Reserve itself today
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O -
No Mo MUDD....TG!


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Stocks rally on plan for mortgage giants

NEW YORK – Stocks rallied Monday as investors placed bets that a recovery in the financial and housing sectors is more likely to occur following the U.S. government's move to bail out mortgage giants Fannie Mae and Freddie Mac. The Dow Jones industrials gained nearly 300 points.

The announcement Sunday that the Treasury Department was seizing control of the companies, which own or back about half the nation's mortgage debt, brushed aside investors' long-simmering worries that the pair would be felled by a spike in bad mortgage debt.

Investors were hoping that the plan to inject up to $100 billion in each of the government-chartered mortgage financiers could not only help lower mortgage rates but perhaps help buoy the overall economy. The move could help banks feel more open to write new mortgages and to refinance existing mortgages at lower rates, offering a possible lifeline to consumers struggling with increasing payments.

The move appeared to have an immediate soothing effect on mortgage rates. The national average interest rate for a 30-year fixed rate mortgage dropped 0.3 percentage point to 6.04 on Monday, according to financial publisher HSH Associates.

But the government's steadying hand for two institutions that many Wall Street observers had said were simply too big to let fail isn't likely to alleviate troubles for homeowners who have fallen far behind on their mortgages.

Dave Rovelli, managing director of U.S. equity trading at Canaccord Adams in New York, said that while the plan boosts confidence in sectors like financials and home builders, it doesn't immediately alleviate worries about other areas of the economy. Still, he said the move was far more welcome than a collapse of Fannie Mae or Freddie Mac.

"It saves Armageddon from happening," he said. "If you think about it, this helps the financials, this helps the housing market. Tech took a huge hit last week. Does this really affect tech? I don't think so."

At the close, the Dow Jones industrial average rose 289.78, or 2.58 percent, to 11,510.74 after being up nearly 350 points in the early going.

Broader stock indicators were also higher. The Standard & Poor's 500 index advanced 25.48, or 2.05 percent, to 1,267.79, and the Nasdaq composite index added 13.88, or 0.62 percent, to 2,269.76.

Bond prices edged higher in late trading on Monday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.68 percent from 3.69 percent late Friday. The dollar was higher against other major currencies, while gold prices rose.

Common shares of Fannie Mae and Freddie Mac will be made virtually worthless by the plan, which will dilute the stock. But the companies' shares had already suffered huge declines in the last year so many shareholders have already endured the majority of their losses.

Fannie Mae shares plunged $6.34, or 90.1 percent, to 70 cents, while Freddie Mac fell $4.21, or 83 percent, to 89 cents.

"This was another needed piece of the puzzle with regard to eliminating fear and stress in the market," said Jim Dunigan, chief investment officer for PNC Wealth Management in Philadelphia, referring to the government's move. "It helps with the balance sheet questions that are out there for financials without a doubt."

Still, Dunigan remains cautious.

"This isn't a magic wand. We're probably going to see another couple bank failures," he said.

The government's action may raise protests from upset shareholders. While Fannie was able to raise $7.4 billion in capital earlier this year, Freddie Mac was unable to fulfill its promise to raise $5.5 billion in capital.

"The Fannie shareholders have a lot of questions that need to be answered from their board of directors," said Doug Daschille, chief executive of investment firm First Principles Capital Management.

Other financial names rallied, particularly those seen as having big exposure to mortgages. Bank of America Corp. jumped $2.50, or 7.7 percent, to $34.73, while Wachovia Corp. rose $2.24, or 13.4 percent, to $18.99. Citigroup Inc. rose $1.25, or 6.6 percent, to $20.32.

Among financials, Lehman Brothers Holdings Inc. was one of the few decliners, falling $2.05, or 12.7 percent, to $14.15 as investors worried that the No. 4 U.S. investment bank was having trouble finding an investor to help shore up its balance sheet.

Home builders also gained ground alongside most financials. Lennar Corp. rose $1.39, or 10.3 percent, to $14.95, and KB Home advanced $2.93, or 14.2 percent, to $23.54.

In the tech space, SanDisk Corp. fell $1.04, or 5.9 percent, to $16.60, while Apple Inc. fell $2.26 to $157.92. Investors are worried the slowing economies overseas will damp demand.

The U.S. government's plan also touched off a global stock rally Monday. Japan's Nikkei stock average jumped 3.4 percent and Hong Kong's Hang Seng index surged 4.3 percent. Britain's FTSE 100 jumped 3.92 percent, Germany's DAX index rose 2.22 percent, and France's CAC-40 surged 3.42 percent.

Light, sweet crude for October delivery rose 11 cents to settle at $106.34 a barrel on the New York Mercantile Exchange. Hurricane Ike fanned unease about the well-being of Gulf of Mexico oil infrastructure that could be in its path.

In corporate news, Washington Mutual Inc. fell 15 cents, or 3.5 percent, to $4.12 after removing Kerry Killinger from the chief executive spot.

United Airlines parent UAL Corp. fell $1.38, or 11 percent, to $10.92 but came well off its lows of the session after an investment newsletter mistakenly passed along an old news story about the company's 2002 Chapter 11 filing. Advancing issues outnumbered decliners by about 2 to 1 on the New York Stock Exchange, where volume came to 1.5 billion shares. The Russell 2000 index of smaller companies rose 14.01, or 1.95 percent, to 732.86.
http://news.yahoo.com/story//ap/20080908/ap_on_bi_st_ma_re/wall_street

I'm not sure if most people realize what has happened here the President through Paulson has effectively seized half the mortgages in the U.S. and placed them under receivership in other words he has transferred the ownership of half the U.S. to foreign investors and is forcing U.S. taxpayers to cover the losses. There is no Constitutional basis for the President seizing U.S. private property and distributing it to foreign interests or for any reason even if it was for our best interests. Nye myself and others have been railing against the GSE's for years Nye wants regulation and transparency I want free (consumer dictatorship) market, private (common people) ownership but we both certainly agree the GSE'S Fannie and Freddie are crooks and a threat to the economy.

 

Many may breathe a sigh of relief that we have not fallen into a deep recession or depression but just as the S+L bailout came with a cost, we have traded our freedom, property rights and right to govern, to avoid the pain of a self created speculative bust. Half the mortgages in the U.S. are now under control of President Bush.

http://www.whitehouse.gov/news/releases/2008/08/20080828-7.html

 

Notice: Continuation of the National Emergency with Respect to Certain Terrorist Attacks
 
Consistent with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), I am continuing or 1 year the national emergency I declared on September 14, 2001, in Proclamation 7463, with respect to the terrorist attacks at the World Trade Center, New York, New York, the Pentagon, and aboard United Airlines flight 93, and the continuing and immediate threat of further attacks on the United States.

Because the terrorist threat continues, the national emergency declared on September 14, 2001, and the powers and authorities adopted to deal with that emergency, must continue in effect beyond September 14, 2008. Therefore, I am continuing in effect for an additional year the national emergency I declared on September 14, 2001, with respect to the terrorist threat.

This notice shall be published in the Federal Register and transmitted to the Congress.

GEORGE W. BUSH

THE WHITE HOUSE,

August 28, 2008.


Anyone notice the date on the Bushes declaration of complete control over private and government interests including transportation, media and telecommunications due to the terrorist attacks. Bush has granted himself a one year extension past August 28, 2008

The elections in November are at the Presidents discretion and so are half the nations mortgages.

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Stephen

And just like last time, the taxpayer picks up the tab for rampant racketeering.  Turns my stomach!!

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Just got news they were offered an influx of $1T...before the take over....They REFUSED IT....They therefore are like the rest and deserve anything they get!
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