(Yes) {and it’s gonna get worse}
Remember all the fraud that lies at the heart of economic and especially government accounting?
Well…it was bad. It is bad. And it’s only going to get worse.
The biggest (and continuing) problem exists in how Fannie (and frankly all of ‘Murica) reports on the value of foreclosure and real estate data. “The Banks” and the ‘Murica Real Estate Mafia continue to report on the value of real estate holdings based on Final Judgment Amounts…and not on the true, decimated value of the underlying collateral.
This is why Fannie/Freddie loans will not typically provide waivers of deficiency…although everyone says, “but you know they will never collect”.
Yes, the probably won’t try to collect….and they probably couldn’t even if they tried…..but they can still report to Congress the fictional, delusional value of their “holdings”….
MORE HERE:
So folks let’s review the situation again with a little truth on our side. Fannie and Freddie needed to borrow 132 billion from the government. 55 billion of the 187 billion was borrowed only to pay it directly back in the form of the 10% cash dividend that the government demanded. The 132 billion becomes 72 billion if we adjust for the 60 billion accounting hi-jinx. The 72 billion would likely be zeroed out if it were not for the approximately 267 billion in toxic MBS that were dumped on them.
The fact of the matter is that if the rule of law was followed Fannie and Freddie had been allowed to pay the government back and begin rebuilding adequate capital reserves our housing market would be far more stable. Our government chose instead to enact the Soviet style profit grab in 2012 and engage in an unprecedented attempt to deceive the American people. The ramifications of this are massive, they have put our fragile economic recovery at risk. They have imperiled the very people they have sworn to protect.
Let me be perfectly clear here, I know I am not the only one who is seeing the puzzle coming together. It would sure be nice to see a few more articles that point out some of these simple facts. Keep the faith!
