-Caveat Lector- <A HREF="http://www.ctrl.org/"> </A> -Cui Bono?- Dave Hartley http://www.asheville-computer.com/dave -----Original Message----- From: Catherine Austin Fitts [mailto:[EMAIL PROTECTED]] Sent: Monday, February 21, 2000 8:45 PM I am many years out of the specifics of securities transactions, and my knowledge of the mechanics of money laundering in the mortgage markets almost non-existent, so what I am going to say is more conceptual than I would like. I finally realized the essence of why the politics at HUD played out the way they did during the Clinton administration. Traditionally, the multifamily mortgage insurance and Section 8 subsidy constituency had relatively little power in the scheme of things. Their real power, if they had any, came from who was in their tax shelter LP group that could get scared (the partners at various New York law firms, investment banking firms, accounting firms and on up through to the Queen perhaps if rumors are true) or their ability to serve as or be a DOJ proprietary that could exploit gentrification and de-regulation in more creative ways than some of the traditional Section 8 folks. The relationship of DOJ covert operations and HUD is one I keep musing about. DOJ was in charge of doing all litigation and legal matters for HUD, as they are for most or all of the federal agencies. If DOJ covert ops are as profitable in money laundering as some have alleged, the next question is what is their competitive edge vs. some of the other groups. One of them may be that they do the litigation and legal enforcement for all the federal credit programs, of which HUD with FHA, has about 33% of the total amount outstanding (about $1.2 trillion in the early '90's) and the Clinton Administration has ballooned it a lot since. That gives them interesting access to influence the design, allocation and enforcement/litigation related to the annual origination of what today would be as much as several hundred billion a year in federal credit and related securities. The 800 lb. gorilla at HUD has always been the Federal Housing Administration (FHA) Mutual Mortgage Insurance Fund (FHA). My guess is that the Clinton Administration has either bankrupted the fund, or gone a long way to doing so, but I doubt that will come up until the markets drop in the next cycle. From 1994-97, I watched policies that at the time made absolutely no sense. It was explained to me that folks like the Clintons and Cuomo love providing guarantees to facilitate more and more debt and that their constituents are often fee driven entities based on debt (banks, mortgage bankers, etc). The lengths that the liberalization went to made no sense given that market liquidity argued to shut this stuff down and let the private sector work(Part of the problem here is that when private markets operate, the pressure increase to include real estate players based on performance as opposed to politics). At one point we estimated that the combined total projects of FHA volume plus what they were mandating that Fannie and Freddie do meant that some low income neighborhoods would have to finance and refinance at awesome rates. The joke was "how can everyone refinance their mortgage twice a year if they are in prison?" I am sitting here with all my databases in a state of mess under court control so this is without benefit of numbers. The missing link that would explain the patterns we experienced from 1989-99, would be a craving for government guaranteed paper and related securities for purposes of money laundering and/or quick transfer of laundered funds globally. Intuitively, I suspect it has something to creating bank and other eligible paper or securities in volume. When Daiwa Securities got an FHA eagle, I should have figured on this. Frankly, my mission was to figure out how to finance the whole deal with equity, so the specifics of how the debt operation on the titanic was not that interesting. If the need for government guaranteed paper is the case, it may explain why some of the complaints on the single family loan sales were so aggressive and weird (Oscar Wyatt, Chairman of Coastal, demanding that I be fired because I was a woman), why the thought of merging to place based was so dangerous on either origination or asset management, why the Wall Street firms winning placed based bids where they learned how the 203(k) program worked was such a sore point politically, why Chip Tatum had a mortgage banking operation under the umbrella of the "Denver Connection" as Webb calls them, the volume of mortgage financing moving through BONY and a variety of other phenomenon and behavior among the single family mortgage bankers and home builders. It is interesting, I bet decriminalization could tank a lot of Taco Bells, and some mortgage bankers and more than few homebuilders. Meantime, if any body knows of a money laundering expert with deep knowledge of money laundering in the mortgage markets and homebuilding, point me to them. <A HREF="http://www.ctrl.org/">www.ctrl.org</A> DECLARATION & DISCLAIMER ========== CTRL is a discussion & informational exchange list. Proselytizing propagandic screeds are not allowed. Substance—not soap-boxing! These are sordid matters and 'conspiracy theory'—with its many half-truths, misdirections and outright frauds—is used politically by different groups with major and minor effects spread throughout the spectrum of time and thought. That being said, CTRL gives no endorsement to the validity of posts, and always suggests to readers; be wary of what you read. CTRL gives no credence to Holocaust denial and nazi's need not apply. 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