Darrell Issa Takes on Countrywide Financial’s Crony Capitalism

By Peter Roff – Most people don’t talk about it anymore, but the current economic crisis is rooted in the corruption of the mortgage market, particularly in instruments known as “sub-prime loans” and in the Democrats stonewalling of Republican efforts to force reform on the lending giants Freddie Mac and Fannie Mae.

Hopefully that may change now that the House Oversight and Government Reform Committee released a new report (pdf) following the committee’s three year investigation into the activities of Countrywide Financial Corporation—which was acquired by Bank of America in 2008. It’s a frightening account, documenting the company’s use of what the committee called “discounted mortgages to influential Washington policy figures” to win friends and influence people. more> http://tinyurl.com/bmh7zxm

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• Countrywide Used Loans for Favor With Fannie Mae, Report Says – Bloomberg (bloomberg.com)
• Disgraced Lender Used Discounts To Buy Congress, Other Officials: Report (huffingtonpost.com)
• Countrywide Cronyism (cato-at-liberty.org)
• Report: Lawmakers, Top Officials Knowingly Received VIP Loans from Countrywide (news.firedoglake.com)
• Report: Countrywide abused ‘VIP Program’ (upi.com)
• Countrywide Scandal Resurfaces, Obama Advisers Involved (Videos) (thedaleygator.wordpress.com)
• Report: Countrywide won influence with discounts (news.yahoo.com)
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U.S. cities struggle with blighted bank-owned homes

By Tim Reid – The smell of rotting food and decay inside 10956 South Wilmington Avenue, Los Angeles, was overwhelming. A burst pipe in the kitchen ceiling leaked water onto a floor littered with half empty cans, razor blades, odd shoes, stained clothing and an upturned, mold-ridden sofa. Windows were smashed and boarded up.

Across America, bank-owned, blighted houses sit untouched, sometimes for years, disfiguring what in many cases are already troubled neighborhoods. Activists say the problem is particularly acute in minority areas. And many cities do not have the resources, the will or the power to force banks to maintain their properties. more> http://tinyurl.com/7crn9q6

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To Fix Housing, Fix Finance

By Martin Neil Baily – Rarely a day goes by without some grim housing news: most recently, “Mortgage Delinquencies Increase,” “Mortgage-Fraud Reports Up 88%,” and “New-Home Sales Sink To Lowest in Six Months.” Until the housing (and job) market recovers, the larger economic recovery will remain stalled. How housing is financed — and the role of the government in that system — is a question that must be addressed by policy makers, and soon.

Fannie Mae and Freddie Mac, the two government-sponsored enterprises that together hold more than $5 trillion in accumulated mortgage risk, were forced into a Treasury conservatorship in September 2008. In order to avoid losses on the mortgage-backed securities that had been issued by these institutions, and a complete implosion of the mortgage market, American taxpayers may be on the hook for up to $224 billion by the time this housing finance chapter is written. There was really no other choice.. more> http://is.gd/y25wsx

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