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REAL ESTATE MARKETS FORUM
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Realty Reality
Recommended Reading
with
Editorial Comment
Ex-Fannie
Mae Accountant Admits Concerns
by
Marcy Gordon @ Yahoo!Ap.com
October 6, 2004
See:
link
Fannie
Mae Execs Face the Music
by
Peter Eavis @ TheStreet.com
October 6,
2004
See:
link
Fannie
Mae's Raines Disputes Report from Regulator
by
Jeff Bliss, Reporter & Robert Burgess, Editor @ Bloomberg.com
October 6,
2004
See:
link
Fannie
Paid Little for Its Audits
WSJ
Online (subscription only)
October 6,
2004
See:
link
EDITOR'S
COMMENTS
by Ole Bear
Flunking
Math Class 101
From Peter Eavis:
- Fannie really doesn't have a leg to stand on. People expect Raines to make a convincing effort in Congress to overcome the skeptics. But the evidence stacked against Fannie is so weighty that Raines may just flame out like former Enron CEO Jeff Skilling did when he tried to defend himself before Congress.
From Bloomberg.com's Burgess and Bliss:
- Republican Representative Richard Baker of Louisiana, chairman of a House Financial Services subcommittee on capital markets, said he'll ask Raines and Howard about the bonuses as well as a lack of internal controls cited by Ofheo. Raines allowed a management structure that gave Howard the ability to both set and meet financial targets, Ofheo said.
- ``It's just pretty clear the books were manipulated,'' Baker said. ``They didn't allocate the resources to the audit side that they did to the business-development side.''
From Marcy Gordon:
- At Fannie Mae, he [Roger Barnes] said, "The atmosphere and culture, particularly within the Controller's Division, is one of intimidation, restraint of dissenting opinions and pressure to be part of the 'team,'" giving Raines and Howard the numbers they sought to please the markets.
Intimidation? Restraint of Dissenting Opinions? Pressure to be part of the Team? Pretty clear the books were manipulated? Evidence stacked? Raines compared to flaming out like former Jeff Skilling CEO at Enron?
Hey, is this a National Soap Opera or what!???? Gee, I am glad someone else has connected a few dots from Enron to Fannie Mae, my favorite fudge candy. Knowing how the GSEs operate on Main Street America bullying the realty valuation community and professional realty valuation organizations and foundations, we suspect Congress had better look into their loan loss reserves and their foreclosure history for all that pretty paper bundled loan stuff they peddle to investors as gift wrapped mortgage backed securities. From what I can tell, they are bleeding in the streets on inflated appraisals and liquidating foreclosures significantly below the realty's appraised market value -- since I understand how to add, multiply, divide and subtract. In the real world, 2 + 2 ='s 4. In the real world a bogus $91,000 realty valuation on a property that is sold in the market as a Fannie Mae foreclosure for $65,000 and chump change, is not exactly the best way in our view to provide "shareholder value." Neither is selling a foreclosure for $35,000 and chump change, based on a refinance realty valuation of $71,000, when the property was never worth more than $50,000 to begin with at the time of the refinance. In the real world, this is mortgage and realty appraisal fraud, isn't it?
Some American Dream of 100% home ownership. Fannie Mae flunks my Math Class 101!
Ole Bear, Editor
© 2004 Realty Reality
