Fannie Mae (and don’t forget its BFF Freddie!) seems indestructible even as nearly everyone wants it to go away. Even Obama has called for its demise. Yet it is arguably more powerful than ever. Now comes word that Fannie’s brokers are secretly sharing in commissions with the private real estate brokers lucky enough to be chosen to get foreclosed homes off of its back. In what could generously be called unsurprising, Fannie seems to be botching the fix up of their original botch job. And in typical big government fashion, they appear to be more concerned with being told on than actually doing something:
The suit says she was fired for reporting her suspicions about employees soliciting kickbacks, including Granillo and certain managers. She said she began raising those suspicions in 2009 and ultimately took them to higher-ups in Washington, D.C., at Fannie Mae’s human relations and ethics offices.
Umm, Fannie Mae has an ethics office? Do you want to laugh or cry at that thought? Meanwhile back in the field, some enterprising Fannie Mae employees discovered a way to make some extra coin for all of that hard work that those mean taxpayers asked them to do. And wow, it sure seems that they discovered a sure fire way to do it:
Granillo, a foreclosure specialist at mortgage giant Fannie Mae, expected to drive off with $11,200 — an illegal kickback for steering foreclosure listings to brokers, authorities allege in court records.
Well, don’t worry, I am sure the ethics office is right on this case. Oh wait, they already fired the person that informed them of this. Hey, she was a tattletale anyway, let’s not get all worked up about it. It’s not like it’s our money…oh wait again.
Fannie Mae may go down in history as one of the greatest disasters in American economic policy, but it surely will go down as one of the luckiest as well. No Fannie executives have suffered in the slightest and in fact have kept their millions of dollars in skimming (err, I mean pay). Part of that luck has to do with politics of course. Not only were Fannie Mae big shots nearly all Democrats, but many liberals want all of the blame for the Fannie debacle to fall on the banks. Many republicans like to point out that Fannie’s triple A ratings (because of its implied backing by the taxpayer) skewed the markets, even as the firm loaded up on more and more dubious mortgages. The topic is much more complicated than the last few sentences of course, but those are the barebones basics of the respective “sides”.
At this point though, I think it may be time for us all to agree that Fannie has to go. As I mentioned, even Obama agrees with that idea (at least publicly). With housing making a smart comeback the last couple of years and with interest rates at historic lows, there may never be a better time than now. And with the idea being agreed upon in substantial portions on both sides of the aisle, maybe there is room in Washington for that ever elusive bipartisanship. Alas, I won’t hold my breath.