What We Need Is More Regulation - Not

The History of a Financial Disaster

1997
. Fannie Mae is a GSE (Govt. Sponsored Entity) regulated by Congress.
. Fannie Mae buys mortgages from other companies.
. It is backed by the taxpayers for all losses, but keeps all profits.
. President Clinton loosens Home Loan Requirements.

1998
. Banks begin making thousands of bad loans, 0 down, no documentation, for
120%! (1998 - 2008).
. Franklin Raines and Jamie Garelick from the Clinton Administration are
appointed to run Fannie Mae.
. Executives at Fannie are encouraged with huge bonuses to meet loan
targets.

2003
. President Bush proposes a new oversight committee to clean up Fannie Mae,
but Democrats derail the effort.
. Rep. Melvyn Watt, (D-NC) Committee on Financial Institutions & Consumer
Credit. stated, "I don't see much other than weakening the bargaining power
of poorer families to get affordable housing."

1999-2004
. Raines earns $100 million in bonuses.
. Garelick earns $75 million in bonuses.
. In 2004, Enron collapses, congress investigates, Executives Skilling & Lay

go to jail, for fraudulent bookkeeping.
. Congress responds with the Sorbanes- Oxley Act, more heavy regulation of
corporations.

2004
. An OMB investigation finds massive fraudulent bookkeeping at Fannie Mae.
. False numbers triggered executive bonuses every year.
. Congress holds no hearings, no one goes to jail, or is punished.

1999-2005
. Fannie Mae pays millions to 354 congressmen and senators, from both
parties.
. Top 4 recipients:

#1 Sen. Christopher Dodd, (D-CT) Chairman of the Banking, Housing, & Urban
Affairs Committee

#2 Sen. Barack Obama, (D-IL) Federal Financial Management Committee

#3 Sen. Chuck Schumer, (D-NY) Chairman of the Finance Committee

#4 Rep. Barney Frank, (D-MA) Chairman of the House Financial Services
Committee

#325 Sen. John McCain, (R-AZ) Armed Services, & Commerce, Science, &
Transportation

2005
. Franklin Raines & top execs are forced to resign from Fannie Mae.
. They do not go to jail.
. There is no media "perp. walk."
. They keep all of their bonuses
. They finally pay $31.4 million in civil fines.

2005
. The Federal Housing Enterprise Regulatory Reform Act is sponsored by: Sen.

John McCain, (R-AZ) "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."

2005
. None of the top 4 recipients support the legislation.
. The reform act is blocked by Democrats, never even making it out of
committee.
. None of the politicians return any of the money, tainted by fraud.

2008
. Fannie Mae & Freddie Mac go bankrupt and the govt. takes them over
completely.
. Lehman Brothers, goes bankrupt from investing in bad mortgages.
. AIG get $85 million in loan guarantees, after insuring bad loans &
projects.
. Taxpayers will ultimately pay BILLIONS.
. Franklin Raines is now an advisor to the Obama Campaign which wants the
govt. to take over more of the economy.
. McCain favors revising regulations & loan standards, selling off Fannie &
Freddie.

Sources:
Congressional Record, 5/25/06
Fox News, 9/16- 9/17/08
Herald Tribune, 4/18/08
New York Times, 9/13/03
www.govtrack.com, 9/17/08

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