Federal Housing Enterprise Regulatory Reform Act 2005

Jonh McCain : Mr. President, this week Fannie Mae's regulator reported that the company's quarterly reports of profit growth over the past few years were "illusions deliberately and systematically created" by the company's senior management, which resulted in a $10.6 billion accounting scandal.

The Office of Federal Housing Enterprise Oversight's report goes on to say that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives. In the case of Franklin Raines, Fannie Mae's former chief executive officer, OFHEO's report shows that over half of Mr. Raines' compensation for the 6 years through 2003 was directly tied to meeting earnings targets. The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac...

If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.
S.190

Add that to the list of significant legislation that one candidate in this election supported, and co-sponsored. As for the Change Candidate, he voted with his party and blocked this legislation. I know, some of the riders here may hope this wasn't the case. Here's a good analysis.

Deregulation of the financial system (Clinton) + flood the market with cheap liquidity (Bush) + Democrats in Congress rebuffing any type of fix to the impending mortgage related meltdown + pushing absurdly low mortgage ARM rates (brokers) = HOUSING BUBBLE.

HOUSING BUBBLE BURSTS + substandard borrowers holding mortgages they can't afford on houses they have no personal investment in + unable to refinance + abhorrently high foreclosure rates = Bear Stearns, Fannie Mae, Freddie Mac, Merrill Lynch, Lehman Brothers, and AIG + one trillion in government bailouts = FINANCIAL CRISIS.

I'm sure there was a great reason why the Hope We Are Waiting For didn't come out of the gates his freshman year and realize change when it starred him the face. Could that reason have been a campaign? Just checking.