Corrupt Former Fannie Chief Escapes Serious Punishment
As chairman and CEO of taxpayer-subsidized mortgage giant Fannie Mae, Franklin D. Raines promoted reckless lending policies that helped cause the housing bubble and mortgage crisis. He also presided over a shocking, Enron-style accounting scandal, in which Fannie Mae’s earnings were deliberately and massively manipulated to inflate Raines’ and other Fannie Mae executives’ compensation. But the Washington Post now reports that Franklin Raines will escape serious punishment under a settlement with federal regulators, paying only modest penalties. Worse, recent Congressional mortgage legislation gives Fannie Mae the ability to lend even larger amounts of money, with taxpayers potentially picking up the tab if borrowers default.