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New proposals to ease our great mortgage meltdown keep rolling in. First the Treasury Department urged the creation of a new fund that would buy risky mortgage bonds as a tactic to hide what those bonds were really worth. (Not much.) Then the idea was to use Fannie Mae and Freddie Mac to buy the risky loans, even if it was clear that U.S. taxpayers would eventually be stuck with the bill. But that plan went south after Fannie suffered a new accounting scandal, and Freddie\'s existing loan losses shot up more than expected.
Now, just unveiled Thursday, comes the \"freeze,\" the brainchild of Treasury Secretary Henry Paulson. It sounds good: For five years, mortgage lenders will freeze interest rates on a limited number of \"teaser\" subprime loans. Other homeowners facing foreclosure will be offered assistance from the Federal Housing Administration.
But unfortunately the \"freeze\" is just another fraud -- and like the other bailout proposals, it has nothing to do with U.S. house prices, with \"working families,\" keeping people in their homes or any of that nonsense.
The sole goal of the freeze is to prevent owners of mortgage-backed securities, many of them foreigners, from suing U.S. banks and forcing them to buy back worthless mortgage securities at face value -- right now almost 10 times their market worth.
Posted: 10 December 2007 Monday 10:27
I served as Assistant Secretary of Housing from 1989-90 during Bush I, and my company, Hamilton Securities Group, later served as lead financial advisor to the Federal Housing Administration from 1993-1997 until we were fired by Andrew Cuomo.
Significant systemic financial fraud in the mortgage markets did not start in 2004. It was going on when I tried to clean it up/stop it in 1989-90 and in 1993-97. This is a problem that has been growing steadily worse for some time.
Andrew Cuomo is not a reformer. If you want to understand what Cuomo is doing now, you need to understand his contribution in the Clinton Administration, the extraordinary amounts of money that went missing from HUD under his leadership as Secretary of Housing. Cuomo, like Paulson, is playing for the same team he was playing for when he was instrumental in the creation of the current housing bubble.
Another way to say this is that what we saw in cleaning up the S&L crisis at the last of the last housing bubble burst was that the players made more on the dump than they did on the pump. So Cuomo was in on the pump and now it appears he is in on the dump.
This housing bubble was part of the “strong dollar policy” which was in turn part of a reengineering of how resources will be governed in the United States and worldwide. There is a fundamental difference between fraud and a financial coup d’etat. The mortgage fraud we are dealing with is not a fraud that is a failure of government. It is part of a coup d’etat that is a reengineering of government and social and political order. - C.A.F. Full Text