Who is watching the hen-house full of 6 trillion dollars? If you are thinking about Fannie Mae and Freddie Mac, today the answer is nobody. The agencies inspector general must have been getting too close to the truth as he has been fired in a complicated bureaucratic maneuver and now there is no oversight of the administrators of the government run lending fund.

In a stunning expose, the Huffington Post laid out how with a slight of hand and a friendly Department of Justice Office of Legal Counsel the new entity running Freddie Mac and Fannie Mae was able to get the Inspector General removed and his investigation into fraud at the agencies ended.

Hey, how important is 6 trillion dollars and the primary lending vehicle for a shaky housing industry? Another scandal will not hurt our weak economy, will it?

In September, the Department of Justice ruled that FHFA Inspector General Ed Kelley did not have authority to investigate wrongdoing or other abuses related to the agency, according to an internal DOJ Office of Legal Counsel memo signed by Deputy Assistant Attorney General Daniel Koffsky.

The ruling was made on complicated technical grounds. The current agency was created by a 2008 act that abolished the Federal Housing Finance Board and replaced it with the FHFA. FHFB employees automatically became FHFA employees and retained their “same status, tenure, grade, and pay.” 

Read the whole article at the Huffington Post

Folks, let me put it plainly, the more we put in the hands of our government officials, the more we open ourselves up to graft, corruption, and incompetence.

Related posts:

1. Japan Ditching Fannie Mae and Freddie Mac Model
2. Fannie and Freddie Fail To Meet Low Income Lending Goals
3. How Will Fannie and Freddie Deal With The Second Mortgages?
4. Fannie Mae Looking For Another Bailout And More Social Activism
5. Mortgage Bankers Association Propose Dismantling of Freddie, Fannie