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See: http://www.washingtonpost.com/wp-dyn/articles/A48621-2005Jan4.html?referrer=emailarticle
for Robert J. Samuelson's [Washington Post]
The Trouble with Fannie Mae

See: http://www.washingtonpost.com/wp-dyn/articles/A51967-2005Jan5.html
for Kathleen Day's [Washington Post]
Fannie Mae Bonuses Targeted

See: http://www.nypost.com/business/37848.htm
for Richard Wilner's [New York Post]
Congress in Bonus Hunt at Fannie Mae

See: http://www.msnbc.msn.com/id/6791003/
for Kevin Tibbles [NBC News Correspondent]
Foreclosures Grow as Refinancing Increases

Ole Bear, Editor, Commentary -- Fannie Watch

We've Only Just Begun

In our first three articles noted above it appears that the witchhunt is on for the bennies, bonuses, and that perky money tossed around at this GSEs upper exec level. We are talking about at least $18,000,000+ in chump change since 2001, Folks. That buys a lot of bananas and coconuts in our playbook. Author Samuelson looks at the fallacy of the GSE monetary policy of 100% American Dream "home ownership." I agree that this is a stupid monetary policy. If every family in America owned a home, who would be left to rent all the apartments and other residential rental property? Space Aliens?

From Kathleen Day we get this juicy snippet:

In 2003, for example, Raines's total compensation of $5.41 million included $4.18 million in bonuses. Mudd's $2.1 million in compensation that year included $1.29 million in bonuses. Howard's $1.82 million in pay included $1.18 million in bonuses, and Levin's $1.37 million included an $800,000 bonus. 

Nice work if you can get it. Congressman Baker from Louisiana is one of the leading Congressional Rat Terriers nipping at the heels of this executive tap dance and ballet. Or is it a Dog and Pony Show? -- and just the tip of the troubles at Fannie Mae?

What trouble? From NBC News Correspondent Tibbles another dead kitty kat gets tossed on the table:

Refinancing in America skyrocketed 35 percent from 1993 to 2001, but from 2000 to 2003, foreclosures also climbed 45 percent. Many economists suggest that with volatile real estate and money markets, pinning all of your financial future on your house isn't much different than taking a spin at the local casino.

We suspect after the Benny Hill Bonus Dog and Pony Show is over, the Rat Terriers snooping around the GSEs will start looking at their foreclosure rates and some of those inflated real estate appraisals they have on file supposedly securing these mortgage backed portfolios. This of course is under the assumption that the Rat Terriers learn new math -- that many of the foreclosures don't sell for the inflated appraised price of the real estate. This more or less puts the nail in the GSE coffin as far as we are concerned:

And the high stakes don't stop with loans. A recent study by October Research shows 55 percent of appraisers say they've felt 'uncomfortably pressured' to overstate property values, and 46 percent of those say they were asked to inflate the value by 11 to 30 percent.

This is lender client pressure on the realty valuation community, and it came about because of FIRREA 1989 and the use of the credit score as the main determinant for making the mortgage loan in lieu of the actual realty collateral. We think October Research's numbers are way too low! This is why a lot of realty valuation folks are starving, and many are leaving the realty valuation business -- too much banking cartel control and pressure over the realty valuation industry. And... it goes all the way to the top. I am afraid the GSE situation is going to get a lot nastier before it is all over.

The Carpenter's had a hit song in the early 1970s when I was in college... 'We've Only Just Begun'...

Ole Bear, Editor
Columbia, Missouri

© 2005 Realty Reality