Time to Reform the Fed?

Publically traded companies are audited by independent third-parties and regulated by government agencies who seek to make sure they keep the rules, make objective disclosures, and aren't committing fraud. On top of this there is Sarbanes Oxley mandating personal liability just to make sure senior management get the message. But what about the Fed? To whom are they accountable?

True the Federal Reserve is intentionally structured to be independent so that monetary policy decisions are not contaminated by political agenda, but can we any longer rely on this current arrangement? And, indeed has the Fed in fact been accomodating to political and/or big business pressure putting the world in peril of a collapse of the financial system? The GAO must investigate the Fed and report its findings to Congress?

We think this is necessary because as we see it there can be no ligitimite excuse for the lack of oversight that has led us to where banks now find themselves--short of capital to meet their reserve requirements. One has to ask why the Fed didn't step in to raise reserve requirements when loose lending practices became banking's stock-n-trade for years? Why the Federal Reserve Board of Govenors never curtailed the 100% mortgage loan practice that in addition to offering no down payment loans with equity lines, didn't even require full payment of current mortgage interest? Why the Fed, under Greenspan, actually lobbied for NO Regulation of derivative securities and Hedge Funds, the later of which have excessively leveraged themselves in some cases as an arm of a bank? And how anyone responsible for regulatory oversight could imagine that separating origination & appraisal from the credit risk & collateral assessment process could have ever reached the conclusion that this would work? I mean do the Comptroller, Federal Reserve and FDIC officials ever talk to one another about business matters? Are we being outrageous to assume people in these agencies think?

We have to have answers and following the money is usually the most direct route to getting them so we can fix this problem so it is will not be repeated again and so we can hold (ir)responsible parties accountable. We know that loans were sliced up and repackaged into an array of complex securities, slices were then collared with various risk triggers and insurance, and finally sold around the world to everyone from pension plans to sovereign governments. We know that investment banks and brokerage firms collaborated to make the sales. (We wonder if Treasury helped make the sales?) And we know that Fannie Mae (FNM), Ginnie Mae and Freddie Mac (FRE) guarantee mortgages and in the last few years had tremendous growth. So we ask, can all this activity go on for years and years without a probe, a question, or change in requirements as the normal lending process moves to the exotic and nothing less than pure speculation?

YES, YES, YES. And that is why we need to examine the facts and get some answers. There is an inherent conflict of interest at the Fed. We cannot let the Federal Reserve transfer this problem to the tax payer. To fix it they resist lowering interest rates, sanction charging excessive fees even to those in bankruptcy, authorize exorbitant credit card rates, and seek to entirely avoid responsibility. The answer now is not to let the shepherd who slept through the night do their own fix. They are obviously incapable and in any case conflicted. Safeguarding the banking system is best put in responsible, INDEPENDENT hands who have to allegiances to those they regulate. Not in the hands of those who need to make up their losses. This is so because before this story ends we'll be talking public tax dollars needed for a bailout. We think this is OUTRAGEOUS. It's time for Congress to take charge.

Comments

[Barbara AnnJackson]

re: Foreclosure Fraud, Freddie Mac “You Tube” Sham, Court Corruption
~~~~~~~~~~~~~~~~~~~~~~...
Freddie Mac’s warning on You Tube about foreclosure scams is contradictory. Representation about $$$ billion dollar losses due to people defaulting on mortgages should be weighed against the fact that Freddie Mac and Wells Fargo needlessly pay DEBT COLLECTION firms outrageous legal fees for corporate lawyers to outmaneuver –and even persecute people who file court proceedings in opposition to fraudulent foreclosures.

FORECLOSURE FRAUD enables MORTGAGE LENDERS to ILLEGALLY FLIP properties. It is HIGHLY COMMON for a DEBT COLLECTOR attorney to file a foreclosure: (i) in the name of a DEFUNCT mortgage company;(ii) in the name of a mortgage company which is NO LONGER holder of the security interest (the promissory note); or (iii) file a foreclosure and AFFIX a "ransom" amount (the collector's fee) far exceeding what the promissory note "Acceleration Clause" authorizes. In Louisiana, Wells Fargo and FREDDIE MAC greatly benefit from fraudulent foreclosures. Irrefutable PROOF of White Collar real estate and mortgage fraud is posted on my lawgrace.org website.

Despite a property owner's entitlement to Challenge CONTRARY-TO-LAW loss of his / her home, most property owners LACK legal knowledge; the Court System is REFRACTORY; and there are limited attorneys with Consumer Law acumen. Also, when borrowers sue for "Unfair Debt Collection Practices," damages, the collector gets to make more $$ through prolonged litigation, as co-conspirators enjoy the foreclosure fraud pie, Investors get zero.

Also SEE:
Mortgage Mess, Foreclosure Fraud and Impediments to Justice
newsblaze.com/story/20...

Viewpoint: Calls for Impeachment of New Orleans Federal Judge
G.Thomas Porteous"
www.opednews.com/artic...

Comment on Foreclosure of Louisiana Judge Reginald Badeaux’s Home
www.lawgrace.org/2007/.../

by Barbara Ann Jackson
lawgrace.org

[SW Appraiser]

Amen to this article (I'm sure I'll see the reprecusions from my post but it can't be any worse than it is now since I DON'T PLAY the game)!

There has been far too many, for far too many years, monkeying around with the financial aspects of real estate - it is, and has been (across the party lines) a "fantastic method" to show an improvement in the economy (or that the economy is strong).

I have seen way too many new developments of "affordable housing" turned into the NEW BARRIOS because of the government subsidized financing where someone goes in with absolutely NOTHING invested. What the heck do they have to loose?

[Jay Jay]

The answer isn't more regulation its less. Its like having a rotten railing atthe edge of a cliff. If there were none there, people would use common sense and keep their distance. Lets free ourselves of the Fed once and for all. Our biggest economic disasters have occured since they got their tenticles into our economy after they were given power in 1913. If the Fed chairman serves at the pleasure of the president, how can you say he is independant? Greenspan learned during the term of Gerorge 1, that if you don't do what your boss wants, bad things can happen.

The taxpayers will be tapped to pay for a bank bailout under the guize that we're protecting america. Well, the New York banks aren't America, and life would go on without them or the Fed.