Unwinding The Serpent

The same big Wall Street interests that fought tooth and nail to avoid the government liquidating them are now calling for the end of Fannie and Freddie.

The federal government should take mortgage finance giants Fannie Mae and Freddie Mac off life support sooner rather than later, the Mortgage Bankers Association urged on Wednesday.
 
The bankers said Fannie Mae and Freddie Mac should move beyond the "conservatorship" that started two years ago and be placed "receivership."

"Fannie Mae and Freddie Mac have already moved well beyond the points where any other financial institution would have been put into receivership," MBA Chief Executive John Courson and MBA Chairman-elect Michael Berman wrote in a seven-page letter to the Federal Housing Finance Agency.

So why liquidate Fannie and Freddie and the trillions in mortgages they control?  Guess.

The mortgage bankers urged the FHFA to make it clear what would happen to the two firms so creditors will know who will be paid if and when they are put into receivership.

"What is paramount, however, is that FHFA protect all the cash flows associated with the (mortgage backed securities) from the demands of any other class of claimants," the bankers wrote.

In other words, make sure we get our cut, and oh yeah, you'll need some mortgage banks to sell all those mortgages to at pennies on the dollar, right?  Pretty good deal if you think about it.  Trillions in mortgages at pennies on the dollar will turn Wall Street's mortgage giants into unstoppable powerhouses that will of course be Too Big To Fail.

Make no mistake, this is the real endgame of Wall Street "reform" right here.  And if the Wall Street tycoons win, it's game over for the middle class.