Friday, January 30, 2009


What has happened to the idea of investigative reporting? We are in the midst of the greatest economic story in 80 years and the best analysis of what happened that the media can come up with is that it is the result of greed and lack of regulation. As attempts are made to recover from this debacle is would be instructive to know the answers to the traditional Who, What, When, Where, Why, and How questions. This can only help to identify what went wrong, who to listen to (and who not to listen to) and what to do next.
To help the next budding Pulitzer prize winner:
Who at Fannie Mae and Freddie Mac change the time tested lending guidelines (20% down payment, etc.) necessary to obtain a mortgage back by these agencies? This Agency guarantee placed the full faith and credit of the US treasury behind the loan.
Who in Congress or the Executive Branch appointed these people?
Where are the people now? How are they involved in any potential "solution"?
When were these guidelines changed?
When the Banks made these mortgages according to the Agency guidelines, were they wrong to make loans mortgages that were full guaranteed by the US Treasury?
Who in Congress blocked any investigation into what was happening? Where are they now?
Why is the money given to the Banks a “bailout” if the mortgages were guaranteed? Why isn’t that called fulfilling the contract? Does the money provided exceed the total of the loans made?
Now there are efforts to help the borrowers retain the homes even though they can’t pay the mortgage. But before that happens, does anyone know:
How many of these loans were refinances where the borrower received cash based upon the appreciation in the house value. Where is that money? Why should anyone who did a cash out refinance get relief unless the cash that was taken is given back?
How many of these foreclosures are on second homes or investment properties? Why should the government guarantee bad investments?

Answers to these questions, and the many questions that further investigation with generate, will go a long way to clarifying the situation so that the proper course came be charted, determining who to listen to in the future, and ridding ourselves of the Congressional dolts who put us in this situation.

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