Establishes a Board that yearly will.....examine
`(1) the safety and soundness of the regulated entities;
`(2) any material deficiencies in the conduct of the operations of the regulated entities;
`(3) the overall operational status of the regulated entities;
`(4) an evaluation of the performance of the regulated entities in carrying out their respective missions;
`(5) operations, resources, and performance of the Agency; and
`(6) such other matters relating to the Agency and its fulfillment of its mission, as the Board determines appropriate.'.

Places a limit on certain assets: SEC. 1369E. LIMITATION ON NONMISSION-RELATED ASSETS.

Place limits on golden parachutes: SEC. 111. LIMIT ON GOLDEN PARACHUTES.

---SEC. 112. REPORTING OF FRAUDULENT LOANS.
Subtitle C of part 1 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4631 et seq.), as amended by this Act, is amended by adding at the end the following:
`SEC. 1379E. REPORTING OF FRAUDULENT LOANS.
`The Director shall, by regulation, require the regulated entities to timely report to the Director when the regulated entity discovers it has purchased or sold a fraudulent loan.'.


--SEC. 151. CEASE-AND-DESIST PROCEEDINGS.
Section 1371 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4631) is amended--
(1) by striking subsections (a) and (b) and inserting the following:
`(a) ISSUANCE FOR UNSAFE OR UNSOUND PRACTICES AND VIOLATIONS- If, in the opinion of the Director, a regulated entity, any enterprise-affiliated party, or the Federal Home Loan Bank Finance Corporation, is engaging or has engaged, or the Director has reasonable cause to believe that the regulated entity, any enterprise-affiliated party, or the Federal Home Loan Bank Finance Corporation is about to engage, in an unsafe or unsound practice in conducting the business of the regulated entity, or is violating or has violated, or the Director has reasonable cause to believe that the regulated entity, any enterprise-affiliated party, or the Federal Home Loan Bank Finance Corporation is about to violate, a law, rule, regulation, or order, or any condition imposed in writing by the Director in connection with the granting of any application or other request by the regulated entity or any written agreement entered into with the Director, the Director may issue and serve upon the regulated entity, enterprise-affiliated party, or the Federal Home Loan Bank Finance Corporation a notice of charges in respect thereof.
`(b) ISSUANCE FOR UNSATISFACTORY RATING- If a regulated entity receives, in its most recent report of examination, a less-than-satisfactory rating for credit risk, market risk, operations, or corporate governance, the Director may (if the deficiency is not corrected) deem the regulated entity to be engaging in an unsafe or unsound practice for purposes

---`(b) PORTFOLIO OPERATIONS, RISK MANAGEMENT, AND MISSION-
`(1) IN GENERAL- Not later than 2 years after the date of enactment of the Federal Housing Enterprise Regulatory Reform Act of 2005, the Director shall submit a report to the Congress--
`(A) describing the holdings of the regulated entities in retained mortgages and repurchased mortgage-backed securities and the use of derivatives for hedging purposes;
`(B) describing the extent of such holdings relative to other assets and the risk implications of such holdings;
`(C) containing an analysis of such holdings for safety and soundness or mission compliance purposes; and
`(D) containing an assessment of whether such holdings and other assets of the regulated entities fulfill the mission purposes of the regulated entities under the Federal National Mortgage Association Charter Act, the Federal Home Loan Mortgage Corporation Act, and the Federal Home Loan Bank Act.
`(2) CONSULTATION- The Director shall consult with the Comptroller General of the United States in preparing the report under this subsection and in conducting any research, analyses, and assessments for the report.
http://www.govtrack.us/congress/bill...?bill=s109-190

To name but a few of the clauses.

In layman's terms.....


Senator John McCain: Jan 2005: "Mr. President, this week Fannie Mae's regulator reported that the company's quarterly reports of profit growth over the past few years were "illusions deliberately and systematically created" by the company's senior management, which resulted in a $10.6 billion accounting scandal.

The Office of Federal Housing Enterprise Oversight's report goes on to say that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives. In the case of Franklin Raines, Fannie Mae's former chief executive officer, OFHEO's report shows that over half of Mr. Raines' compensation for the 6 years through 2003 was directly tied to meeting earnings targets. The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac.

The OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulator's examination of the company's accounting problems. This report comes some weeks after Freddie Mac paid a record $3.8 million fine in a settlement with the Federal Election Commission and restated lobbying disclosure reports from 2004 to 2005. These are entities that have demonstrated over and over again that they are deeply in need of reform.

For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac--known as Government-sponsored entities or GSEs--and the sheer magnitude of these companies and the role they play in the housing market. OFHEO's report this week does nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO's report solidifies my view that the GSEs need to be reformed without delay.

S. 190 [109th]: Federal Housing Enterprise Regulatory Reform Act of 2005
Last Action: Committee on Banking, Housing, and Urban Affairs. Ordered to be reported with an amendment in the nature of a substitute favorably.
Status: DeadI join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.

I urge my colleagues to support swift action on this GSE reform legislation." John McCain

Making them report their fraudulent loans.....prohibiting golden parachutes.....making them open their books to this board for examination....making them get rid of certain non-related assets.....and giving this Board the right to make them "cease and desist" such offending practices....the ability to examine their books......checks on the soundness of their operations.....requiring that their holding match with their mission purposes......ALL would have helped prevent what happened. There's much more in there as well. This is all the homework I'm going to do for you.

__________________
"What exactly is this foreign policy experience?" Obama said mockingly of the New York senator. "Was she negotiating treaties? Was she handling crises? The answer is no."

1. They were already covered under OFHEA
2. The secondary mortgage loan business was there main mission (which includes subprime)
3, 4, and 5. OFHEO already mandated minimum and critical capital levels and required a risk based capital test. In fact, Fannie and Freddie were not able to meet these minimum levels so OFHEO was forced to reduce them. The only was Fannie and Freddie were going to increase there capital was to issue more bonds, hardly a fix to the underlying problem. The problem was that OFHEA and just about everyone else in the market underestimated the risks associated with sub-prime and even prime loans, and then they lacked the ability to reduce their risk because they would only be able to sell their assets for pennies on the dollar.
6. There were already enforcement actions and penalties
7. Executive compensation in the millions is not going to cause a multi-trillion dollar company to go under.


This bill didn't even go to a vote. And even if it passed, the secondary mortgage market was so screwed that it wouldn't have mattered.




Here's an outline of the capital requirements allready in place.



http://www.ofheo.gov/CapitalRequirements.aspx?Nav=107

"If the Democrats had let the 2005 legislation come to a vote, the huge growth in the subprime and Alt-A loan portfolios of Fannie and Freddie could not have occurred, and the scale of the financial meltdown would have been substantially less. The same politicians who today decry the lack of intervention to stop excess risk taking in 2005-2006 were the ones who blocked the only legislative effort that could have stopped it."

"Beginning in 2004, the portfolios of Fannie and Freddie's subprime and Alt-A loans and securities began to grow. Subprime and Alt-A originations in the U.S. rose from less than 8% of all mortgages in 2003 to over 20% in 2006. During this period the quality of subprime loans also declines, going from fixed rate, long-term amortizing loans to loans with low down payments and low (but adjustable) initial rates, indicating that originators were scraping the bottom of the barrel to find product for buyers like the GSEs.

The strategy of presenting themselves to Congress as the champions of 'affordable housing' appears to have worked. Fannie and Freddie retained the support of many in Congress, particularily Democrats, and the were allowed to continue unrestrained. Rep. Barney Frank (D., Mass), for example, now the chair of the House Financial Services Committee, openly described the "arrangement" with the GSEs at a committee hearing on GSE reform in 2003: "Fannie Mae and Freddie Mac have played a very useful role in helping to make housing more affordable...a mission this Congress has given them in return for some of the arrangements which are of some benefit to them to focus on affordable housing." The hint to Fannie and Freddie was obvious: Concentrate on 'affordable housing' and, despite your problems, your congressional support is secure."

http://online.wsj.com/article/SB122212948811465427.html

__________________
"What exactly is this foreign policy experience?" Obama said mockingly of the New York senator. "Was she negotiating treaties? Was she handling crises? The answer is no."

To fillibuster a bill it actually has to make it to the floor. This one did not.



Well, at the time of this bill Congress was Republican controlled. So obivously your assertion is not correct.


And I can provide proof that Republicans thought everything was hunky dory just a few months ago. It's called Phil Gramm.

The opinion section of the WSJ is a joke, and this article is a joke. First he makes the blatantly wrong and foolish claim that somehow the Dems found a way to block a vote when they were in the minority without filibustering.


And then he makes this claim :""If the Democrats had let the 2005 legislation come to a vote, the huge growth in the subprime and Alt-A loan portfolios of Fannie and Freddie could not have occurred." His evidence is apparently that it is true because he said so.

November 4, 1999 -- Gramm-Leach-Bliley Act passes the Senate 90-8 and the House 362-57 And Bill Clinton signed it.

AND added to that Republican bill----as a condition from Bill Clinton that he wouldn't veto it and that the Democrats would come on-board, they added that "banks would be REQUIRED to make loans to people who normally could not afford it." That is what Clinton and the Democrats insisted on and it is what they got.

And after the banks made these bad loans, there was the gov't sponsored Fannie & Freddie, protected by Congress, with open arms ready and willing to buy these bad loans.

...AND now.....we have the mess.

It's really pretty simple.

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"What exactly is this foreign policy experience?" Obama said mockingly of the New York senator. "Was she negotiating treaties? Was she handling crises? The answer is no."

how about sharing a link to that quote ... i was unable to google it

__________________

Quote:

"I like to watch the news, because I don't like people very much and when you watch the news ... if you ever had an idea that people were really terrible, you could watch the news and know that you're right."

Frank Zappa

Clinton vowed to veto the Senate version of the bill unless it was re-written to include "requirements that banks make loans to minorities, farmers, and others who have had little access to credit."
http://www.ickypeople.com/2008/04/bi...-subprime.html

My quote in the previous post was based on memory from yesterday when I posted it and we discussed it---- so I should have stated that. However, it wasn't that far off.

__________________
"What exactly is this foreign policy experience?" Obama said mockingly of the New York senator. "Was she negotiating treaties? Was she handling crises? The answer is no."

but this allows us to see that he was NOT advocating lending to those who were NOT creditworthy ... he was encouraging lending to the underserved

i see it as disingenuous to pretend that clinton expected lenders to write bad loans

__________________

Quote:

"I like to watch the news, because I don't like people very much and when you watch the news ... if you ever had an idea that people were really terrible, you could watch the news and know that you're right."

Frank Zappa

But that was the start of what the end result was. "Requiring" banks to make such loans means that the banks had to find a way to loan to people who had no access to credit before.

They shouldn't have "required" banks to do it at all. They injected themselves into that process and they shouldn't have. You're right---I doubt Bill Clinton meant, 'go out and make bad loans' to these people anymore than Bush did when he advocated and pushed the concept of 'affordable housing' to everyone. But from the banks point of view----they had Congress and Presidents "requiring" they do this on the one end and on the other end they had this nice safety net called Fannie & Freddie who was ready and willing and encouraging the banks to get them as many of these loans as possible.....as they sought to grow their portfolio even larger and larger with no end in sight.

The leaders now want to blame it all on these banks. But they had a large hand in this as well, IMHO. And to top it all off, the legislators fought any kind of changes to these GSE's that might have prevented it all from getting to this point.

It was a perfect storm.....and IMHO, it all began with our leaders who are now trying to place ALL the blame elsewhere.

__________________
"What exactly is this foreign policy experience?" Obama said mockingly of the New York senator. "Was she negotiating treaties? Was she handling crises? The answer is no."