Franklin Raines, the former CEO of mortgage giant Fannie Mae back when most laughingly referred to it as Fanron, is now thought to be giving “mortgage and housing policy” advice to the Obama campaign. Franklin Raines was the most corrupt CEO since Ken Lay at Enron.

Franklin Raines - Mortgage Millions

Franklin Raines was the CEO of Fannie Mae back when Wall Streeters and mortgage insiders knew it was Raines who was responsible for cooking the books to pay stock EPS-tagged bonuses ala Enron, lobbying Congress extensively to declaw it’s regulator, OFHEO, and to see to it Fannie could operate in willful violation of it’s charter by purchasing it’s own mortgage products rather than simply insuring them as mandated.

An article on NationalReview.com outlines the egregious behavior of Franklin Raines as the steward of a ship headed for disaster…and everyone who cared to look, knew it.

The article posits,

“But in the 1990s, the company moved in a much riskier direction. Fannie Mae used its borrowing power to buy up mortgages and hold them, making a profit from the difference between the low price it paid to borrow the money and the higher interest rate it received on the mortgage. It was potentially profitable, but it had nothing to do with helping low- and middle-income people buy houses. “It doesn’t do anything to support their core mission,” says Senator Sununu, “and it increases their exposure to interest-rate risks.”"

It goes on…

“Raines became obsessed with propping up Fannie Mae’s earnings per share, or EPS, even if he had to use creative accounting to make it happen. Raines set a series of increasingly higher EPS goals that, if met, would trigger bonuses for the executive team that far surpassed what they received in salary.”

Franklin Raines compensation shot from a paltry $6.48 million in 1998 to an astonishing $24.15 million in 2003. Just over half ($52 million) of Franklin Raines total income ($90 million) came from hitting every EPS target for bonuses in that six-years from 1998-2003.

OFHEO Director, James B. Lockhart, said about Franklin Raines in sworn testimony before the Senate Committee on Banking, Housing and Urban Affairs on June 15, 2006,

“As a GSE, Fannie Mae has a special mandate and position of public trust. The previous management team, led by Chairman and Chief Executive Officer (CEO) Franklin Raines, violated that trust.

By encouraging rapid growth, unconstrained by proper internal controls, risk management and other systems, they did serious harm to Fannie Mae while enriching themselves through earnings manipulation.”

Franklin Raines is a corporate pirate who sought to enrich himself at what he knew would soon be a tax payer expense.

Shameful…

If Franklin Raines is giving you advice, you must be planning a raid on the tax payers since that’s his forte…

Here’s the clip McCain is running to make folks aware of Franklin Raines…

Ouch!

Good Luck!

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