Folks, if IndyMac’s CEO Michael Perry is right- we all need to start paying a lot more attention to what is happening with the GSEs: [Fannie, Freddie & Co.]
[Currently] it’s “difficult” to trade even AAA-rated mortgage bonds that aren’t guaranteed by government-chartered Fannie Mae and Freddie Mac, or federal agency Ginnie Mae, Perry wrote.
For this reason, HousingDoom would especially like to thank Bill Maloni for permission to reproduce yesterday’s post on his GSE blog. Bill has impressive credentials, in an earlier blog post he states:
I have worked in financial services and GSE issues for more than 35 years, since 1968: 11 years as a legislative assistant on Capitol Hill; head of congressional liaison at the Federal Home Loan Bank Board; and as a congressional liaison officer for the Federal Reserve Board and its Chairman, Paul Volcker.
In 1983, I left the Fed to go to work for Fannie Mae, as a lobbyist and later was named senior vice president of its Government and Industry Relations unit. I was hired under David Maxwell, worked Jim Johnson’s entire tenure, and for Frank Raines. After spending my final year as "adviser" to the corporation, I retired from the company in December, 2004.
I have no business connections, of any kind, with any business, trade association, or other individual or group, in the financial services or mortgage finance communities.
I, exclusively, am just an interested observer, having worked for and against many of the colliding interests in the GSE world.
We’ll start with our correspondence:
Bill also gave permission for Doom to reproduce this e-mail thread — Thanks [jm] 
To: JOHN
Subject: Re: New Blog Out, 8-2 — our door is still open
Date: Thu, 02 Aug 2007 13:26:32 -0400
From: BILL
Good and You have my permission to reprint it. (Thank you for asking.).
But, where did you go so far astray, Grasshopper??
—–Original Message—–
From: JOHN
To: BILL
Sent: Thu, 2 Aug 2007 1:02 pm
Subject: Re: New Blog Out, 8-2 — our door is still open
Hi Bill,
I disagree vehemently with much of your stuff, but …
Your 8/2 piece has a lot of important things to say. Thanks to
the popularity of a couple of our posts early in the week, we
have been running around a record 7,000 visits a day.
With your permission, I could set up and run your complete
piece on Housing Doom tomorrow. I would be delighted to
give this work additional exposure.
Cheers, John
BILL wrote:
www.malonigse.blogspot.com
Enjoy. Comments always welcome.
"Would They Take Back Their Letter, If They Could?" [1]
by Bill Maloni
A few days ago seven trade associations [2] — all representing commercial banking interests — called on the Senate Banking Committee leadership to move expeditiously on its consideration of the GSE regulatory reform bill, a version of which having already passed in the House.
The letter might be one the trades want back, since it was sent before Countrywide issued its market roiling second quarter report–suggesting payment problems in the prime mortgage market–and before this week’s American Home Mortgage funding problem.
I am sure that each of those groups—with predictable short sightedness–has its own particular form of destabilizing legislative pain and suffering that they hope the Senate will inflict on the GSEs, the sum total of which likely would leave just two smoldering holes in the ground where Fannie and Freddie headquarters once stood.
But, as the credit markets tighten, in part over the actions of some of those who signed the letter, the mortgage lender element in those trade groups might want to keep one principle in mind and it isn’t “location, location, location.”
It’s “liquidity, liquidity, liquidity!”
Read the rest of this entry »
