Defrauding America and the Global Catastrophe

By
Real Estate Agent with ERA Queen City Realty

The defrauding America and the global catastrophe has created much speculation. From all accounts, including Capitol Hill, the culprits were Fannie Mae and Freddie Mac. The "GOP.gov, the official website for Republicans in the House of Representatives, says flatly: "Fannie Mae and Freddie Mac were the main cause of the nation's current financial turmoil."  The names of these two institutions have been bantered about with ease as the the primary cause of the mortgage meltdown.

The verdict was without merit, primarily because there was no evaluation of the facts to render such a decision. Now that the dust has settled,  a proper analysis of the information available has produced factual statements about the role of Fannie Mae, Freddie Mac and others in the defrauding of America.

It would appear that there were three factions to the process, instead of the two often mentioned. The third entity was Wall Street. A very powerful player and one that fostered the derivative market. Michael Hudson of the Daily Beast goes on to demonstrate that "Government data show Fannie and Freddie didn't take the same risks that Wall Street's mortgage-backed securities machine did."For those of us in the real estate industry, you may recall that there wasn't much demand fro Freddie and Fannie products during the boom years. That's because Wall Street lead the way in products and services to meet every potential consumer no matter what their financial circumstances. The federal Financial Crisis Inquiry Commission, is scheduled to release its final report this month. Unfortunately, the report is not the work of independents without a political agenda. Although the data suggests that Wall Street was the prime leader in the defrauding of America, the term "Wall Street" was prohibited from being included the the final report. So much for open and honest government. According to Michael Hudson "When it comes to public policy, though, a sense of context and proportion is important. Tagging Fannie and Freddie as the primary suspects in the mortgage debacle diverts attention from bigger offenders and from policy decisions-such as deregulation in the mortgage market and on Wall Street-that helped create the climate for out-of-control lending."

However, the fact remains as supported by independent sources that Fannie and Freddie were followers, not leaders, in the mortgage frenzy. Michael Hudson proclaims The Monster in all of this was "a gang of predatory lenders and Wall Street bankers, that fleeced America and spawned a global crisis." While Fannie and Freddie share some of the blame, they consistently played second fiddle. The real defrauding of America and the global catastrophe was created and supported aggressively through the efforts of Wall Street.

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Kristal Kraft
The Berkshire Group Realtors - Denver, CO
Selling Metro Denver Real Estate - 303-589-2022

The crimes continue!  They are being rewarded for their unbridled greed.  When will this stop?

kk

Jan 18, 2011 01:38 AM #1
Rainmaker
218,889
William Collins
ERA Queen City Realty - Scotch Plains, NJ
Property and Asset Management

Hi Kristal, thanks for stopping by. the role of the people is more crucial than ever before. We must demand accountability and nothing less. Nothing should be accepted at face value.

Jan 18, 2011 07:16 PM #2
Anonymous
Shawna

The truth is, I suspect, that the banks with time on their side, are still waiting for Americans to default on their loans as it happens naturally. Their goal is to decrease the amount of underwater mortgages by however means necessary (through refi programs or natural default) to remove their guilt.  The programs that the government have set up thus far, such as HARP etc., also been gradually getting sweeter with the passing of time.  The guilt is there, no questions on that.  I've gotten contacted by my mortgage servicing company recommending that I get my property financed at a lower percentage rate.  Now why would they like to collect less on interest?  Mortgage companies are in business for the profit they make on interest.  This must be admission of guilt.  Or a business deal with another mortgage company?

Apr 10, 2013 11:50 AM #3
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William Collins

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