{"id":4259,"date":"2008-09-07T17:49:55","date_gmt":"2008-09-08T00:49:55","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=4259"},"modified":"2008-09-07T17:49:55","modified_gmt":"2008-09-08T00:49:55","slug":"how-we-got-to-this-place","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/4259\/how-we-got-to-this-place\/","title":{"rendered":"How we got to this place….."},"content":{"rendered":"

I promise I won’t take up so much space on here after the dust settles, but I’m having a hard time getting my mind around the enormity of what’s happening with Fannie and Freddie and what it means, so I figure the best thing I can do is share what I know with others……<\/p>\n

I came across this article in the Wall Street Journal<\/a> which lays out a good “story” of what has transpired.\u00a0\u00a0 I’m going to copy excerpts of it, but I’d urge you to read the whole thing…….<\/p>\n

By DEBORAH SOLOMON<\/strong>, SUDEEP REDDY<\/strong> and SUSANNE CRAIG<\/strong>
\nSeptember 8, 2008<\/span><\/span><\/div>\n

WASHINGTON — In the end, Fannie Mae and Freddie Mac had no choice.<\/p>\n

Summoned to separate meetings on Sept. 5 with Treasury Secretary Henry Paulson and other top officials, the two mortgage giants were told they could either agree to a government takeover or one would be foisted upon them.<\/p>\n

“We have the grounds to do this on an involuntary basis, and we will go that course if needed,” Mr. Paulson told senior executives at the two companies, who had little idea such a move was coming, according to three people familiar with the meetings.<\/p>\n

There was no dramatic trigger, nor was there fear of imminent collapse. Instead, the sweeping government intervention stemmed from a growing realization by Treasury and Federal Reserve officials that the two companies couldn’t survive in their present forms, and that any collapse would be devastating to the economy.<\/p>\n

The decision was hashed out over weeks of meetings…….<\/p>\n

In the end, Mr. Paulson, Federal Reserve Chairman Ben Bernanke and James Lockhart, head of the companies’ regulator, the Federal Housing Finance Agency, concluded that the two companies had lost the confidence of the markets and couldn’t survive as currently structured. …..<\/p>\n

Inside Treasury, the hope was that merely receiving authority to backstop the two companies would comfort markets enough that they could raise capital on their own. ……..<\/p>\n

Two things would soon force Treasury’s hand. Uncertainty about Treasury’s plans and how any intervention would affect shareholders caused shares of Fannie and Freddie to fall sharply, making it all but impossible for them to raise equity. At the same Read more<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

I promise I won’t take up so much space on here after the dust settles, but I’m having a hard time getting my mind around the enormity of what’s happening with Fannie and Freddie and what it means, so I figure the best thing I can do is share what I know with others…… I […]<\/p>\n","protected":false},"author":44,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[26],"tags":[],"class_list":{"0":"post-4259","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-lending","8":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":3360,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/3360\/update-on-the-fannie-and-freddie-issue\/","url_meta":{"origin":4259,"position":0},"title":"Update on the Fannie and Freddie Issue","author":"Tom Vanderwell","date":"July 14, 2008","format":false,"excerpt":"Okay, here\u2019s an overview of my take on the Fannie Freddie issue: Do you think the Stock Markets like the Fannie Freddie Bailout? Uh, that would be a classic example of an initial elation followed by the let down that comes from looking at the details.\u00a0\u00a0 I\u2019m not going to\u2026","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"Do you think the Stock Markets like the Fannie Freddie Bailout?","src":"https:\/\/straighttalkaboutmortgages.files.wordpress.com\/2008\/07\/dow-in-time2.gif?w=350&h=200&crop=1","width":350,"height":200},"classes":[]},{"id":4267,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/4267\/update-on-fannie-and-freddie\/","url_meta":{"origin":4259,"position":1},"title":"Update on Fannie and Freddie","author":"Tom Vanderwell","date":"September 8, 2008","format":false,"excerpt":"Well, it happened.\u00a0 In case you haven\u2019t heard the news, Fannie and Freddie were bailed out by the Federal Government over the weekend.\u00a0\u00a0 I\u2019m not going to go over all of the details but just try to hit some \u201chigh points.\u201d So, here goes: 1. The Federal government now owns\u2026","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":4039,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/4039\/mortgage-market-week-in-review-7\/","url_meta":{"origin":4259,"position":2},"title":"Mortgage Market Week in Review","author":"Tom Vanderwell","date":"August 22, 2008","format":false,"excerpt":"Here we are on Friday again and it\u2019s time to take another look at what\u2019s going on in the mortgage markets. This week we\u2019re going to talk about two economic reports and two big question marks. First the economic reports from the week: 1. The Index of Leading Economic Indicators\u2026","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":10727,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/10727\/anyone-think-that-fannie-and-freddie-are-out-of-the-woods\/","url_meta":{"origin":4259,"position":3},"title":"Anyone think that Fannie and Freddie are “out of the woods?”","author":"Tom Vanderwell","date":"December 29, 2009","format":false,"excerpt":"Then check out this chart marking delinquencies at Fannie Mae.\u00a0\u00a0 Calculated Risk: Fannie Mae: Delinquencies Increase Sharply in OctoberFannie Mae reported today that the rate of serious delinquencies - at least 90 days behind - for conventional loans in its single-family guarantee business increased to 4.98% in October, up from\u2026","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/straighttalkaboutmortgages.com\/wp-content\/uploads\/2009\/12\/FannieMaeDelinquencyOct.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":4223,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/4223\/quick-update-on-the-rumors\/","url_meta":{"origin":4259,"position":4},"title":"Quick update on the rumors….","author":"Tom Vanderwell","date":"September 5, 2008","format":false,"excerpt":"If any of you have enjoyed the \"give and take\" between Sean and I about the Fannie Freddie death watch, it appears, based on reports in the Wall Street Journal and others that the bailout is happening this weekend.\u00a0\u00a0 What shape is it taking?\u00a0\u00a0 Lots of rumors, very few facts.\u2026","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":10715,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/10715\/interest-rates-have-been-trending-upward-but-what-happens-when-uncle-sugar-quadruples-the-sugar-supply-at-fannie-and-freddie\/","url_meta":{"origin":4259,"position":5},"title":"Interest rates have been trending upward, but what happens when Uncle Sugar quadruples the sugar supply at Fannie and Freddie?","author":"Greg Swann","date":"December 26, 2009","format":false,"excerpt":"From the Wall Street Journal:The Obama administration's decision to cover an unlimited amount of losses at the mortgage-finance giants Fannie Mae and Freddie Mac over the next three years stirred controversy over the holiday. The Treasury announced Thursday it was removing the caps that limited the amount of available capital\u2026","rel":"","context":"In "Big Mother"","block_context":{"text":"Big Mother","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/big-mother\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/4259","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/users\/44"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/comments?post=4259"}],"version-history":[{"count":2,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/4259\/revisions"}],"predecessor-version":[{"id":4261,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/4259\/revisions\/4261"}],"wp:attachment":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/media?parent=4259"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/categories?post=4259"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/tags?post=4259"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}