In a time when my entire family had already tapped into their retirement savings and taken out second mortgages, we were grateful when any supporters, including Trump, donated to my defense and spoke out about my innocence.
In September 2008, the two largest housing mortgage companies called Fannie Mae and Freddie Mac, which were government-sponsored enterprises, which hold hundreds of billions of dollars of mortgages, because of the losses they took on the mortgages, they essentially became insolvent, and the government had to take them over.
In our equities business, 49 of the 50 most important Lehman clients are back doing business with us. The flows are 75 to 80 per cent of what they were prior to the bankruptcy. The issues which damaged Lehman were around commercial mortgages and illiquid private equity assets.
Fannie Mae has traditionally only bought and sold mortgages. But when a loan held by the company goes into foreclosure, Fannie Mae gains ownership of the underlying property until it is resold to new investors.
In surveys, many borrowers say reverse mortgages have improved their lives and provided money they needed for retirement.
Because reverse mortgages do not require borrowers to make immediate repayments, the interest charges are added to the debt every day, and the total amount owed grows over time.
Fannie Mae and Freddie Mac buy mortgages from banks and other lenders, providing those financial institutions with capital to make new loans.
As the United States has become an older nation, reverse mortgages have grown into a $20-billion-a-year industry, with elderly homeowners taking out more than 132,000 such loans in 2007, an increase of more than 270 percent from two years earlier.
I think something that forces financial institutions to write down underwater mortgages, I think, would be a sensible thing to do.
Fannie and Freddie made two-thirds of all subprime mortgages. That is not a free market institution. That entity, along with the Fed printing too much money back in '03 and '04, caused the housing collapse. So we need to take free markets seriously. That means we have to put an end to all these tax credits and tax deductions and loopholes.
