Oh boy, and then the taxpayers – that’s you and I – bailed out both firms, and in fact we continue to right now, with Geithner, under Obama’s direction, continuing to pour in the cash.
The first sign of what would ultimately become a $3 billion fraud surfaced Jan. 11, 2000, when Fannie Mae executive Samuel Smith discovered Taylor, Bean & Whitaker Mortgage Corp. sold him a loan owned by someone else.
But did Fannie tell anyone, like, for instance, The FBI?
Fannie Mae officials never reported the fraud to law enforcement or anyone outside the company. Internal memos, court papers, and public testimony show it sought only to rid itself of liabilities and cut ties with a mortgage firm selling loans “that had no value,” as Smith, the former vice president of Fannie Mae’s single family operations, said in a 2008 deposition.
Just dump it off on someone else, right? And who else? Well, that would be the other GSE, who they also didn’t tell….
Taylor Bean would have collapsed in 2002 “but for the fraud scheme,” according to prosecutors. It also survived because Freddie Mac began picking up the company’s business within a week of Fannie Mae’s cutoff, Jason Moore, Taylor Bean’s former chief operating officer, said in an interview.
Isn’t that nice?
Oh yeah, and this little charade factored into the Colonial Bank collapse too.
But all of it would have ended immediately had the government’s sponsored enterprises done what they had an obligation to do – turn over evidence of criminal lawbreaking to the authorities.
They did not and as a result serious financial harm was done – and now we, as taxpayers, get to pay for it.
Oh, and both Fannie and Freddie? They’re still in business, now 80% owned by Treasury. That’s you and I, who were bent over the table not just once, not twice, but each and every day this crap is allowed to continue and these firms are not shut down and the parties responsible for this intentional malfeasance remain free without prosecution.
Incidentally, Geithner and Obama, by supporting these firms, are both personally responsible for this crap continuing, and you, the taxpayer, being repeatedly screwed.