As chairman and CEO of taxpayer-subsidized mortgage giant Fannie Mae, Franklin D. Raines promoted reckless lending policies that helped cause the housing bubble and mortgage crisis. He also presided over a shocking, Enron-style accounting scandal, in which Fannie Mae’s earnings were deliberately and massively manipulated to inflate Raines’ and other Fannie Mae executives’ compensation. But the Washington Post now reports that Franklin Raines will escape serious punishment under a settlement with federal regulators, paying only modest penalties. Worse, recent Congressional mortgage legislation gives Fannie Mae the ability to lend even larger amounts of money, with taxpayers potentially picking up the tab if borrowers default.
Corrupt Former Fannie Chief Escapes Serious Punishment
by Hans Bader
April 19, 2008 @ 4:39 pm
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[...] of dollars to bail them out. Fannie Mae, which helped spawn the mortgage crisis, has engaged in accounting fraud worse than what happened at Enron in order to inflate its managers’ [...]
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What’s crazy about that is there was relatively little news on the topic. I stumbled across something else very interesting today as well. Apparently, Fannie Mae is going to be eliminating their portfolio cap, which is the highest it’s ever been right now by the way, completely in March. Any thoughts? I wrote a bit and you can check out the sources here: http://truthfullending.com/us-aaa-credit-rating-at-risk/