THE DEMOCRATS ARE GOING TO HAVE TO FIGHT BATTLES THEY SORT OF DIDN'T HAVE TO WHEN THEY HAD COMFORTABLE MAJORITIES
The Democrats were unable to get real reforms on mortgage debt past the Mortgage Bankers Association, who bought more Senators than had Obama, apparently.
Meanwhile, the fight over who pays for the fraud on Wall Street may seem settled (hint: Main Street lost in Washington and the wealthiest won in the last election).
However, behind the scenes Fannie and Freddie and some of the other bond insurers have been pushing back. And, once the amounts get into the tens of billions (reported by Barron's), one's eyes open from their general glaze of surrender.
Directly related or not, the GOP is honing its knives for the agencies who would dare to do such a thing as insert accountability of this size into the world of go-go finance.
I don't know how Geithner came over to the opinion that Freddie and Fannie don't have a role any longer. The organizations have functioned well since the Great Depression, so what has changed, except unchecked fraud at origination and lax underwriting, when Mudd was Chairman (and I do believe that is the crux of what went wrong).
More importantly, what would we have done without them in this crisis? To simply throw away institutionalized expertise like they have is ...
Yet, if the moves by Fannie to lock people out of refinancing their homes, potentially, by raising debt-to-equity demanded at refi come into full force, as expected, then how is that good for recovery?
Does anyone disclose how many borrowers are affected by this?
