WASHINGTON, D.C. – Remarkable as it may seem, leaked documents from the Obama administration Treasury department now in the possession of Infowars.com prove the Obama administration started planning in 2010 to eliminate home ownership as a pillar of the American Dream.
The paltry 53 documents (of the 11,000 still under Obama administration seal) that Judge Margaret M. Sweeney of the U.S. Court of Federal Claims in Washington, D.C., made public last October were more than enough to prove the Obama administration forced the government’s two giant mortgage Government Sponsored Entities (GSE) to fail.
That the Obama administration planned to “wind down” Fannie and Freddie helps explain why the Treasury Department was willing to strip them of the profits needed to rebuild the substantial capital base necessary for the two mortgage Government Sponsored Entities (GSEs) to continue playing their historical role of buying mortgages from mortgage originators as a plan to provide mortgage originators the liquidity need to keep the private middle-income mortgage market in the United States.
On Monday, Infowars.com released the first of three leaked Treasury documents that proved the Obama Treasury Department held a secret meeting in January 2011 – closed to the press – to finalize before presentation to President Obama a devious plan to “wind down” Fannie and Freddie, despite Congressional mandates dating back to President Franklin Roosevelt to create a mortgage GSE to keep a vibrant low-cost middle-class mortgage market.
In short, the Obama administration schemed with Treasury Department officials to bankrupt the two giant mortgage GSEs.
The Obama administration’s ultimate goal was to “fundamentally transform” the mortgage market by abandoning a cornerstone of the America Dream ever since President Franklin Roosevelt decided to intervene into the private U.S. mortgage market to preserve middle-class homeownership as part of the American Dream.
This policy decision to wind down Fannie and Freddie – a policy decision the Obama administration kept secret from the American public – helps explain why the Obama administration was willing to implement the “Net Worth Sweep” to rob Fannie and Freddie of the profits needed to create the liquidity the GSEs needed to continue playing a robust role purchasing mortgages so the private economy could create low-cost middle-class mortgages, while the GSEs rebuilt the capital needed to weather future economic downturns.
In this article, Infowars.com will explore the second of the three leaked Treasury document in Infowars.com possession, confirming that the Obama administration schemed as early as 2010 to tell the American public a series of lies about Fannie and Freddie’s financial strength as the plan to implement the “Net Worth Sweep” was being formulated – a series of lies now been confirmed by internal Obama administration communications revealed in just 53 of 11,000 still sealed documents that Judge Sweeney ruled to make public.
This second leaked Treasury Department document consists of two parts: (1) a Treasury Department internal memo entitled “Housing Finance Reform,” with a subtitle “Discussion Document: Sensitive and Pre-Decisional,” dated Nov. 30, 2010; and (2) an agenda prepared for a closed door meeting in the Oval Office with President Obama, entitled “Meeting to Discuss Housing Finance with Business Leaders,” that was held a few days later, on Dec. 10, 2010.
The discussion memo “Housing Finance Reform” dated Nov. 30, 2010 was prepared for a discussion between top Treasury officials with a group of business leaders, including former Federal Reserve Chairman Paul Volker and Democratic Party mega-donor Penny Pritzker in her capacity as Chairperson of the Pritzker Realty Group, that took place in the White House Oval Office in closed door meeting from which the press was excluded.
This internal Treasury document remarkably lays out the case for substantially reducing or altogether ending the role Fannie and Freddie historically have played in the middle class mortgage market, while leaving in place the Federal Housing Authority (FHA) to underwrite low-income subprime mortgages.
In the discussion document, unnamed Treasury officials define “Option 1: End State is a World of No Government Guarantees (other than FHA)” that clearly calls for an end to the role Fannie and Freddie have traditionally played buying mortgages from mortgage originators to provide liquidity in the middle class mortgage market.
Among the “considerations” listed in the document are a clear admission that with Fannie and Freddie removed from the U.S. mortgage market, mortgage funding in the future would move to “where capital is cheapest,” further acknowledging the winner would most likely be large banks using deposit liabilities to create mortgage loan assets.
The document goes on to acknowledge the plan would result in “fewer 30-year mortgages,” the innovation in the mortgage market given birth by the Federal Housing Authority during the Depression as a methodology to allow more middle-class first-time home buyers to afford the monthly mortgage payment required to buy a family home.
The document also implies that “removing the subsidy for mortgage credit” afforded traditionally by Freddie and Fannie “reduces over-consumption of housing” – a statement translated into ordinary English means that under the Obama Treasury plan, getting rid of Fannie and Freddie by transitioning the mortgage market to Wall Street and big banks will mean fewer homeowners in the United States, if only because the lack of affordable 30-year mortgages would inevitably price many (if not most) middle-class first-time home buyers out of the market.
The agenda for a “Meeting to Discuss Housing Finance With Business Leaders” lays out for President Obama a guideline for how he should chair the “POTUS Housing Meeting” that was held secretly in the White House on Dec. 1, 2010, “to discuss the principles of housing finance reform” with individuals from outside the administration.
Attending the Oval Office meeting were Mark Gallogly, founder of the New York-based private investment firm Centerbridge Partners; David Swenson, the chief investment officer at Yale University; Bill Donaldson, a former SEC chairman; and Anna Burger, the former secretary-treasurer of the SEIU who was appointed in 2009 to serve on the President’s Economic Recovery Advisory Board; as well as Paul Volker, Treasury Secretary Tim Geithner, and HUD Secretary Shaun Donovan.
Valerie Jarrett, then a senior advisor to President Obama, and Austan Goolsbee, then serving as the chairman of the Council of Economic Advisors authored the agenda memo.
The first topic for discussion was this: “Target and limit any government guarantees for mortgages.”
Subtopics here were:
- Avoid recreating hybrid private-public institutions like Fannie and Freddie;
- Gradually phase down conforming-loan limits to transition to a private housing finance system over a number of years;
- Target any government guarantee of mortgages to low-income borrowers (e.g., FHA); and
- Replace widespread guarantee of mortgages with grants or tax policies that better target subsidies to lower-income borrowers.
The second topic for discussion was this: “Focus policy on ensuring that America is ‘well housed” rather than simply encouraging homeownership per se.”
The second topic only had one subtopic: “Adequate and affordable housing is a basic policy objective, so ensuring economical rental opportunities is as important as encouraging homeownership.”
The agenda memo instructed President Obama to welcome the participants, thank them for examining the issues and sharing their views, to be followed by President Obama going around the room asking each participant for a synopsis of their views on housing reform, beginning with Paul Volker.
The agenda memo next described briefly what President Obama should expect each participant to say.
- Volker: Government should be out of the housing finance system in the long run, except for low-income assistance programs like FHA. We should wind down Fannie Mae and Freddie Mac.
- Swenson: Fannie and Freddie were expensive and inefficient, and earned private profits at public expense. We should not provide a government guarantee of mortgages in normal times; it is costly, regressive, and unnecessary. But we should have contingency plans, possibly including loan guarantees, for crisis times.
- Gallogly: We should transition away from government guarantees to avoid disruptions to the market, for example by phasing down the conforming-loan limits over a number of years while the private market builds up.
- Donaldson: We should consider guarantees or subsidies as needed to encourage rental housing instead of putting all our policy efforts into encouraging homeownership.
The unavoidable conclusion is that in 2010, the Obama administration planned to “wind down” Fannie and Freddie, understanding fully that the inevitable result would be that the 30-year fixed mortgage would be a thing of the past.
The result would be to turn middle class Americans from a nation of middle class homeowners to a nation of middle class renters, effectively cancelling homeownership as a key component of the American Dream.
Critical to Obama’s scheme was a massive secret income redistribution in which money would be diverted from the middle class mortgage market to pay Obamacare insurance subsidies for low-income predominantly Democrat-voting pool, while restricting government involvement in the mortgage market to helping only these same low-income Democrat-voting families seeking to purchase homes.
As we have seen here, Obama’s plan to close Fannie and Freddie was communicated secretly in through Treasury Department internal memoranda and closed door meetings with business leaders that excluded the press.
As we shall see in future articles, Obama had calculated to pull off this secret goal of undermining U.S. middle-class homeownership by arguing his administration had to strip Fannie and Freddie of all earnings because the two agencies were in imminent risk a collapse – a complete lie, as seen by the nearly $260 billion the Obama administration stole from Fannie and Freddie in the “Net Worth Sweep” of 2010.
The $260 million in earnings stolen by Obama from Fannie and Freddie conveniently covered the $130 billion in Obamacare subsidies for low-income insurance buyers that Congress had refused to appropriate from taxpayer funds.