How Serious Are the SEC's Charges Against Fannie Mae and Freddie Mac?

Tuesday, December 20, 2011

Fannie Mae Headquarters in Washington, D.C. (flickr: futureatlas.com)

A series of recent filings from the Securities and Exchange Commission bring new charges against executives at Fannie Mae and Freddie Mac. The SEC claims executives misled investors about Fannie and Freddie's exposure to subprime mortgages in the two years leading up to the housing market collapse. It is unusual to hear a defense of the mortgage giants — conventional wisdom holds that their risky loans were at the heart of the financial crisis from the beginning. But writing in his New York Times op-ed columnJoe Nocera argues that the SEC's latest complaint shows "how desperate the SEC has become to bring a crowd-pleasing case."

Guests:

Joe Nocera

Produced by:

Mythili Rao

Comments [3]

listener

"The reality is that Fannie and Freddie followed the private sector off the cliff instead of the other way around".

Did the federal government and their progressive activist allies force the private sector to the cliff in the first place by pressuring them to make high risk loans?

Dec. 20 2011 01:22 PM
listener

The great "misguided" and deliberate revision of history is underway.

The defense of Fannie and Freddie would not have to do that they were run by extremely well paid Democrats and wholly defended by progressive Democrats like Rep. Frank and Rep. Waters, would it?
Did progressive politicians and their shock army of "community activists force the "mandate to help make houses affordable" which was the government telling banks how to run their business?

The federal government issued regulations and punitive demands on lenders to abandon traditional lending practices and give loans to persons they knew could not afford it.

Why no discussion with Gretchen Morgenson of the NY Times and her book
"Reckless Endangerment"?

Dec. 20 2011 10:26 AM
Seth from NY, NY

Is Joe Nocera actually using the "but everyone was doing it" defense of Fannie and Freddie? These are large, semi-public financial institutions run by adults with a charters to help expand the housing market. A defense stating that Fannie and Freddie "followed" the private banks into the subprime market is no defense at all.

Dec. 20 2011 06:30 AM

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