Housing

Forcing Banks to Buy Back Loans

On Tuesday, the Senate Banking Committee is slated to consider the administration’s nomination of Joseph A. Smith Jr., the commissioner of banks for North Carolina, to head to head the […]

On Tuesday, the Senate Banking Committee is slated to consider the administration’s nomination of Joseph A. Smith Jr., the commissioner of banks for North Carolina, to head to head the Federal Housing Finance Agency, Fannie Mae’s and Freddie Mac’s regulator. The New York Times’s Gretchen Morgenson has a good piece that ran Saturday about the challenges that lie ahead for the GSEs as they head into their third year of conservatorship, swallowing up $151 billion in taxpayer aide.

In addition to living up to previous Congressional testimonials where Smith has talked about promoting “a renewed understanding that the concentration of financial power and a lack of transparency are not in the long-term interests of our financial system, our economic system, or our democracy,” Morgenson also called on Smith to continue acting FHFA director Edward J. DeMarco’s campaign in “demanding that banks buy back dubious loans they sold to Fannie and Freddie during the mortgage mania.”

Morgenson continues that not only will Smith have to side with the taxpayer, but that “he will have to stand against increasingly powerful banks that — despite the magnitude of the crisis — have managed to avoid, circumvent or co-opt policy makers, law enforcement officials and regulators.”

Stay tuned.

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