Frank Louis
Former Fannie Mae head investigated for lying to investors -- his name is "Mudd"
By Frank Louis
March 21, 2011

More Fannie Mae criminal activity is exposed while millions of Americans are still on the hook for those fraudulent mortgages. Meanwhile, housing numbers are getting worse, there is no end in sight to the downward spiral in these "values," and we beg for modifications on our mortgages and are expected to continue paying these fraudulent, upside down mortgages.

It just keeps getting more and more obvious to me at least; the housing crisis was so jam packed with fraud that we property owners need to fight back. But we don't. We lose our homes, we lose real estate investments we have made for our future generations, and on top of it, we are being forced into foreclosure and bankruptcy while people like this Daniel Mudd make tens of millions of dollars from orchestrating this Ponzi Scheme.

Just this past week, the former head of Fannie Mae was fingered in an investigative probe for lying to investors concerning subprime loans. Lying to investors? WHAT? Did nobody lie to us when we invested in real estate during the time period that this fellow, Mudd, was "lying to investors?" Who are we? "Chopped Liver?"

Daniel Mudd, the former head of Fannie Mae, became the most recent target in investigations by U.S. regulators of whether financial institutions were honest with investors about their exposure to subprime loans. Wait a minute here; "investors?" Is this to say that people who made down payments on real estate at artificially "values," created by the on-slot of these very same "subprime" loans were not "investors" and were not 'lied to" about the investments that were making? I don't think so. And neither should you!

According to Mr. Mudd, Fannie Mae "did not abandon its goal of increasing homeownership for poorer Americans." No, they made millions of fraudulent loans that inflated property values. These inflated "values" ultimately, screwed millions more Americans out of their life savings and financial worth in their property. Oops! Mr. Mudd, we Americans have lost trillions of dollars in our personal worth and you can feed us this line of BS? The New York Daily News recently reported, "There have been suggestions that Fannie Mae subordinated its mission to the pursuit of higher profits." I tend to agree with this take on the situation.

Mudd was also quoted in stating: "Fannie Mae was required to expand lending, to conserve capital while providing liquidity, to meet housing goals for the underserved and to serve shareholders and homeowners alike," Mudd went on to apologize for not "balancing" those competing goals. Mudd, in a Reuters article online was quoted saying "I wish I could have maintained the delicate balance of the roles assigned to Fannie Mae and I am sorry that I could not." He's sorry? We're the underserved! We're bankrupt, and he's "sorry!"

You have got to be kidding: another major player in the ruin of our nation's economy admitting to some sort of "flaw" in judgment. We Americans, Mr. Mudd, apologize for putting our hard earned money down on our mortgages. We made a "flaw" in our judgment. We were underserved when your practice and the scale of these subprime loans (often to straw buyers) was not disclosed to us in your fiduciary responsibility to us. We want our money back! We want our good credit back.

To my earlier point about these folks making millions from their criminal activities; Mudd was listed as number 24 of the "25 highest-paid men" in Fortune Magazine "earning" a mere $25.7 million in 2009 alone for his role in driving millions of Americans bankrupt through his part is the housing crisis. Meanwhile, we are offered foreclosures, short sales and ultimately bankruptcy while the very realtors, mortgage brokers, and appraisers that sold us these properties make even more sales commissions on our financially broken backs and he makes tens of millions.

Mudd was ousted from his position when Fannie Mae and Freddie Mac were seized by regulators in September 2008. The next year, oddly enough, he was hired for over $25 million (as I mentioned above) by Fortress Investment Group. Think he had any "in" for this job? I wonder if Fortress makes money from foreclosed real estate? Humm... I wonder!

Of course, he plans to submit a written denial to the allegations. He will probably get away with it too. Sure, he too will admit hat there were "flaws" in the system as I have reported so many like Greenspan, Madoff, etc, have before. But, I am willing to bet my underwater property that no convictable crime will be found. Just poor judgment. Poor man, he just feels so badly about how this has all turned out. How's that $25 million working out for you Dan? Better than our real estate, I can bet you that!

Mr. Mudd, Please understand that investors who made down payments on over-valued real estate because of your scummy subprime loans must be reckoned with as well. They too have been lied to. Millions of Americans entered into legal contracts based on values that were fraudulently manufactured so you could create Mortgage Backed Securities (and, I am sure, be picked for your position at Fortune) have been robbed by your actions. You need to be in prison. We too were "investors." Why isn't the SEC looking out for us?

The Securities and Exchange Commission recently notified Mr. Mudd that the agency intends to pursue civil claims against him. Civil lawsuit? I think it is criminal to commit this level of fraud.

However, I guess that this is only my opinion. It is time we, as property owners in this nation form a union and fight, in a united front, for our rights.

© Frank Louis


The views expressed by RenewAmerica columnists are their own and do not necessarily reflect the position of RenewAmerica or its affiliates.
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Frank Louis

Frank Louis is a print and on-air commentator who offers opinions and solutions on and for the economy, social issues, and the future of this nation. In the Old Testament, Nehemiah 4: 14 instructs us to fight for our houses; something we need to be doing now. Our future generations depend on it!... (more)


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