Freddie Mac Acting CFO Found Dead in Apparent Suicide

reply to post by Kailassa


I don't think Israel has the ability to project power on a level needed for the U.S. to use them as an attack dog. It is much more complicated than that.

Notice Kellerman wasn't one of the ivy league insider boys?

Looks like there is some recent news on this.

online.wsj.com...

Mr. Kellermann had won a favorable accounting ruling from the Securities and Exchange Commission. His boss, John Koskinen, acting chief executive officer, was pleased, and told the finance chief to stop worrying about whether Freddie would meet its May 15 deadline for filing quarterly results. "If we're late, we're late," Mr. Koskinen recalls saying.

But Mr. Kellermann, 41 years old, was visibly stressed. Mr. Koskinen says he advised his CFO to take a few days off. That evening, Mr. Kellermann said he would take off the next day. Mr. Koskinen suggested the rest of the week, at least. "We'll be in good shape.

Hmm, Kellermann had just pulled off a huge victory, so why was he so worried? The pressures of his job got to him? Or somebody else who didn't want Kellermann to succeed in this strategy to lower mortgage payments for home owners?

In February, the Obama administration announced a plan under which Fannie and Freddie would lower mortgage payments for millions of Americans in an attempt to prevent foreclosures. That may be good for the economy, but it will require the companies to give up income and may slash the value of many mortgage securities they hold.

Mr. Kellermann and other Freddie executives felt they needed to issue a warning in their annual SEC filing: The plan was likely to hurt the company's finances, notably the valuation of guarantees it made on millions of mortgages. Freddie believed that certain accounting rules could force it to take a pretax charge against earnings of roughly $30 billion as a result of the plan.

The FHFA, which regulates Fannie and Freddie, felt that Freddie's initial draft of the warning put too much emphasis on that risk, says one person involved in the discussions. Freddie, this person says, was hoping the SEC would let it maintain an exemption from certain accounting rules and thus allow it to avoid a big earnings hit. After tense exchanges between Freddie and the regulator, the two sides came up with compromise wording about the risk.

The day before Mr. Kellermann's death, the SEC agreed to Freddie's preferred accounting treatment. Mr. Kellermann didn't seem excited, but remained "subdued," says one person who worked for him.

So, the government wants Freddie Mac to lower mortgage payments, and Freddie Mac then insists on reporting a huge loss if forced to do this, which would require more bailout money. The government says, no you don't have to report this as a loss.

Ok, what the article does not say, is that lowering interest rates so that home owners can keep making payments should be a lot cheaper than incurring large losses from all those same people defaulting. The article wants to make this out as the governments fault, but it seems that someone within Freddie Mac, or someone with a great deal of influence over Freddie Mac, was trying to prevent lowering of mortgage rates.

I think the real clue is hidden in this article.

www.washingtonpost.com...

This potential expense was related to the Obama administration's housing recovery program, for which Freddie Mac playing a part in modifying the mortgages of homeowners facing foreclosure. Many of these loans had been bundled into securities. So to modify the mortgages, Freddie Mac has to pluck them out of the securities, which entails reassessing the value of the loans and marking them down to their current market price. The company might then have to record a charge to reflect these decreased values.

Maybe the holders of these bundled securities would rather have hung on to the foreclosed properties? Stick the government with the losses, and keep the properties. This would be an excellent plan if it could be pulled off.

Kellermann comes up with a plan that allows Obama's mortgage plan to go into effect without Freddie Mac claiming a 30 Billion dollar loss, and that night the hitman shows up at his door.





[edit on 11-5-2009 by poet1b]

Originally posted by poet1b

Maybe the holders of these bundled securities would rather have hung on to the foreclosed properties? Stick the government with the losses, and keep the properties. This would be an excellent plan if it could be pulled off.

Kellermann comes up with a plan that allows Obama's mortgage plan to go into effect without Freddie Mac claiming a 30 Billion dollar loss, and that night the hitman shows up at his door.

Good reasoning. We don't know what else Kellerman had on his plate. Maybe personal or unconnected things never to be revealed.

But he either chose not to blow the whistle or go to prison - or didn't have the opportunity to. Maybe he was bumped off which it is starting to look like from the pieces of the puzzle in place so far.

Like the other damage control hits engineered by government and big business, the full story is unlikely to come out.


Mike

Looks like Freddie Mac was looking for a way to politically embarrass Obama, by claiming that his mortgage plan forced them to report more losses, and the compromise ended that attempt. It isn't publicized at all, but these banking execs are really PO'd over not getting their undeserved, humongous bonuses.

Still, I doubt even these buggers would have him bumped off because he thwarted their attempt to politically embarrass Obama. Something much bigger must be hidden in the books.

Is it normal for a boss to give someone the day or week off after pulling off a great victory? Cause this doesn't jive with my work experience. When the boss tells you take tomorrow off, it usually isn't good, especially followed by the comment, you can take the week off if you would like. Unless this time off had been requested in advance for the first opportunity, or the conversation included statements like, "I am worried about your health. I think you need to take a break, you have been working too hard", it wouldn't make the employee feel very good about himself.