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Former Fannie, Freddie Executives Charged

WASHINGTON, Dec. 16 (UPI) — U.S. finance regulators have charged former executives of the nation’s largest mortgage brokers with misleading investors about their risky mortgages holdings.

The Securities and Exchange Commission filed the charges in Manhattan against former Federal Home Loan Mortgage Corp. Chief Executive Officer Richard Syron and two other former Freddie Mac executives, Patricia and Donald Bisenius.

Similar charges were filed against Federal National Mortgage Association CEO Daniel Mudd, former Fannie Mae Chief Risk Officer Enrico Dallavecchia and Executive Vice President Thomas Lund, The New York Times reported Friday.

“Fannie Mae and Freddie Mac executives told the world that their subprime exposure was substantially smaller than it really was,” said Robert Khuzami, director of the SEC’s Enforcement Division.

“These material misstatements occurred during a time of acute investor interest in financial institutions’ exposure to subprime loans, and misled the market about the amount of risk on the company’s books,” he said.

The two banks are considered government-supported enterprises, as they accept the role of buying mortgages from banks to encourage more lending and expanding homeownership.

The banks were encouraged to do so by the government and by banks that did business with Fannie Mae and Freddie Mac.

By 2005, the two companies attempted to increase their share of subprime mortgages, as Wall Street was going through a housing boom — more accurately a mortgage boom.

By 2008, however, the market had soured and banks had billions of dollars worth of frozen assets on their books.

The government has since loaned Freddie Mac and Fannie Mae more than $100 billion to keep them afloat, The New York Times reported.

The Obama administration has already said it would unwind the two banks, the Times said.

UPI - United Press International, Inc.

Since 1907, United Press International (UPI) has been a leading provider of critical information to media outlets, businesses, governments and researchers worldwide.

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  • s c

    Do I smell a whitewash? If it’s important to get to the bottom of this charade, then it would NOT be fair to omit anyone. WHERE ARE Fwank AND Dodd?
    Long before GB left office, he specifically asked Fwank if there was anything suspicious going on, and Fwank SAID NO. Fwank LIED. He LIED to the president, he LIED to himself and he LIED to America.
    America, if Fwank and Dodd are in any fashion immune from prosecution, then it makes NO sense to look at anxious house owners as the only ones who can be left holding an empty bag. WHERE is the justice? HOW can Fwank and Dodd be ignored?
    America, either DEMAND that justice be done, or take the time to REWARD criminals like Fwank and Dodd. Did you forget that both Fwank and Dodd GOT RICH while they were in Washington?
    We’re supposed to believe that “SOME” people don’t trust those who get RICH. Well, HYPOCRITES, here’s your golden opportunity to prove that you’re not like Fwank or Dodd. Grow a spine. Go buy some ethics. Act like adults, AND DEMAND THAT Fwank and Dodd be HELD ACCOUNTABLE!

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