You know that old joke about “Sure, we lose money on every deal, but we figure we’ll make it up on volume”? I couldn’t help but think of that this morning when I was reading an article L sent me this morning. The article was about FHFA’s review of Bank of America’s mortgages, and indicated that FHFA examiners did have some concerns about how Freddie Mac was reviewing mortgages. Doesn’t this sound like that “make it up on volume” strategy?
Senior Freddie Mac managers disagreed with the examiner’s concerns and said they feared losing business from Bank of America if the government became more aggressive in getting money back for bad mortgages, the report said.
It sounds like Freddie Mac should have let the business walk. Taxpayers don’t need that kind of volume.
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But who believes they actually care about losing taxpayer money? The people who work at the GSEs make a fortune whether they make money or lose it by the trillion, and when they leave, they will no doubt go to work for the institutions whose garbage they bought on behalf of the taxpayer.
Regulatory capture. The system is utterly, utterly corrupt at this point and nothing will change anything short of burning it to the ground, literally, and starting again. But we can’t advocate taking up arms because even saying such a thing would land you in prison as a terrorist, so if you don’t like it, find another country to live in – the U.S. is circling the bowl at this point and beyond hope, it’s going to take much longer than the lifetime of anyone reading this and get much, much worse before anything changes for the better here.
I believe taxpayers are irritated as much when they hear about this.