Abstract The Federal National Mortgage Association or FannieMae, a government chartered company, provides mortgages for low-incomes persons. Following an introduction, this paper provides information about FannieMae, including background information on the corporate governance scandal where top executives manipulated accounting to hit targets and receive lucrative bonuses. Thirdly, recent changes in corporate governance including the Sarbanes Oxley Act are discussed. Additionally some recommended changes in corporate governance at FannieMae are included.
Paper Outline:
Introduction
Background of FannieMae Scandal
Issue
Recent Changes in Corporate Governance Which May Help Elevate Problems
Recommended Changes in Corporate Governance for FannieMae Conclusion
References
From the Paper "Corporate governance, or the way a company is managed, can make or break that company as well as affect lenders, stockholders, and the market as a whole. Corporate governance is best defined as the means by which stockholders ensure that officers and directors will act in the best interest of the corporation instead of in their own best interest. Corporations set up a board of directors and appoint officers to run the company, although the true owners of the company are the stockholders whose money is at stake. It is the officers which play a substantial role in determining whether or not stockholders get a return on their investment. Stockholders entrust the officers to do what is right for the company as well as keep them informed of the financial state of the company through proper reporting. Although the corporation has significant control over the reporting process, there are strict rules which it is required to follow. Sometimes, however, accounting principles are violated by corporate officers in order to increase their own compensation in the form of bonuses".
Abstract This paper contains a detailed description of the process of obtaining a FannieMae Loan, and who qualifies for a FML. The author explains,who funds the loans. The paper reveals the positives and negatives of FannieMae.
Abstract This paper analyzes the effect of government indirect subsidy to mortgage and securities sector of the economy and how the effects could be demonstrated through FannieMae and Freddie Mac.
Abstract In this paper the author examines the scandal that surrounds the FannieMae company (also known as The Federal National Mortgage Association), which is a U.S. government chartered company, providing mortgages for low-income persons. The author looks at the FannieMae company together with its rival Freddie Mac as accounting for half of America's home mortgages. The author proceeds to detail the scandal that surrounded the FannieMae company as a result of the accounting strategy which helped the company hit its earnings-per-share targets and rewarded the top executives generously. The author also details the response of FannieMae to the findings against them. The paper discusses the Sarbanes-Oxley Act of 2002 which was instituted to try and prevent these sorts of scandals in large corporations. Finally, the author concludes that with the deadline of the new Sarbanes-Oxley Act, there will probably be more significant changes in the future.
Outline:
Introduction
Background of FannieMae Scandal
FannieMae's Response
Issue
Recent Changes in Corporate Governance Which May Help Elevate Problems
Recommended Changes in Corporate Governance for FannieMae Conclusion
From the Paper "However, Fannie's assertions may not have been completely true. As regulators began to look into Fannie Mae's accounting records, it was discovered that Fannie Mae was plagued with many of the same problems present in Freddie Mac. "Armond Falcon Jr., top federal regulator of the two home mortgage financing agencies, Fannie Mae and Freddie Mac, accused Fannie Mae officials of pervasive and willful misapplication of standard accounting rules." (Toedtman, 2004, p. A57) Targets of the investigation for mismanagement were the top two offices in the company. At the management helm of Fannie Mae is Chief Executive Office Franklin D. Raines, who served as White House Budget Director during the Clinton administration, followed by the Chief Financial Officer, Timothy Howard, who has the primary responsibilities for fiscal management."
Abstract This paper takes a look at the three specific companies of Tyco International Ltd., Bear Stearns and FannieMae, stating that all have committed criminal business acts due to the greed of their executives. In the case of Tyco, the company's three top executives, CEO Dennis Kozlowski, CFO Mark Swartz and Chief Legal Counsel Mark Belnick allegedly took loans without receiving approval, sold shares without telling investors, and fixed the company's books by inflating operating income, among other acts. The article next describes Bear Stern's mismanagement as "toxic waste", referring specifically to the largely failing hedge fund the company ran with investor and client money. Lastly, the paper discusses FannyMae's over six years of financial fraud. Again the paper concludes that head executive cashed in on millions of personal bonuses, leading the company to years of misstated earnings, merely because of their personal greed.
Outline:
Tyco International Ltd.
Toxic Waste ala Wall Street
Nothing Funny about FannieMae
From the Paper "Pure in simple, what Bear Stearns did was not prudent fiduciary and fiscal responsibility but bloated speculation born out of greed and wanting to make a "fast buck." People trusted them with money - some of them their life savings and hard earned cash - and when the truth of their financial mismanagement came to light, they had the gall to ask for more to bail them out from their own wrong doing. As a result of ethically and morally questionable financial mismanagement, Bear Stearns of Wall Street redefined the term toxic waste in money matters considering when they ask people for their money in the first place, they were selling them s--t and when the caca hit the fun, they hide behind obtuse and highly technical mumbo-jumbo that aims only to save their own hides at the cost of the investors. The way Bear Stearns acted is like a thief caught in one's home and the thief asking the victim for bail money."
Tags: operations, greed, executives, mismanagement, bonuses, income
Abstract This paper examines the dramatic shift in the U.S. housing market. The writer contends and explains why one's home is no longer viewed as an asset but rather an investment, which can be milked regularly for cash by way of second mortgages and home equity loans. The ease in the availability of money and its comparative cheapness has led to a inflation in real estate prices. This paper examines how the face of home ownership has changed and become a case of renting from lenders as opposed to direct and full fledged ownership. This well-researched paper details the process of home financing, which is handled by the Federal Home Loan Bank System, created by the government in 1932. This paper details the events the pushed the government to create both the FannieMae and Freddie Mac organizations. This paper explores the manner in which these two leading organizations, in the field of secondary residential mortgage markets, package and sell loans to home owners, much the same way as stocks and bonds are traded on Wall Street. The writer delves into the governmental policies devised to increase home ownership, most of which include using FannieMae and Freddie Mac.
From the Paper "The weakness comes from the feeling that contingent mortgage obligations are second only to treasury bonds and at the same time are not totally supported by the US government. When the interest rates change, as it happened in 1990s with a dot com share which went beyond all reason, the markets suddenly rose and fell. Then the Federal government team had to cut interest rates very sharply back to get the market thinking logically again. Yet the drop in interest rates makes the investors feel that they have lost money, and at that time they had concentrated on homes and real estate. The government has not been able to control the imagination of the people, and the next dream has been on its way. This is reflected in the statement of Chairman Greenspan to Congress in the last two years to control Fannie Mae and Freddie Mac better."
Tags: finance, mortgage, bank, inflation, economy, fannie, mae, freddie, mac
Abstract This paper discusses the United States GSE set up, specifically the FannieMae and Freddie Mac firms. It looks at how the two mortgage giants played a crucial role in the 1980s and 1990s by helping to create an investor market for mortgage-backed securities, enabling home buyers to enjoy lower interest rates and easier credit terms while contributing to record homeownership rates.
From the Paper "Government-Sponsored Enterprises (GSE) were created by Congress in an effort to provide the home-mortgage market with financing. GSE's provide a variety of functions in the United States mortgage industry such as personal credit, alternative mortgages and education on mortgage and housing affordability ("Who We Are" para. 2). The American government established Fannie Mae and Freddie Mac to buy up billions of dollars worth of mortgages every year. Government-sponsored enterprises guarantee repayment of loans. Fannie Mae and Freddie Mac enterprises acquire funding by issuing agency bonds and bundle the home loans into mortgage-backed securities. Agency bonds are considered risky, especially when compared to U.S. Treasury bonds. The majority of treasury bonds are held primarily by large institutional investors. "
Abstract The paper discusses the life of Fanny Brice, a legendary performer in the 1920s and 30s who performed on Broadway, in burlesque and in the famous Ziegfeld Follies. The paper shows how Fanny Brice was a remarkable entertainer and woman. The paper relates that she was incredibly talented and learned how to perform by gauging her audience and finding what worked for her own personality, looks and talents. The paper notes that she was one of the first successful Jewish comediennes who is still remembered for her wit and outrageous characters.
From the Paper "Fanny Brice was born in New York City in 1891. Her parents were immigrants who owned saloons, and her real name was Fania Borach. She began performing early in her life, and aspired to be a serious actress, but her Semitic looks always forced her into character parts. In fact, while she often sang humorous songs with a Yiddish accent, in reality she did not even speak Yiddish (Editors, 2006). She was also tall and skinny, which made her stand out from most of the chorus girls of the time, who were more statuesque (Sorel, 1986, p. 81). In 1906, she won an amateur night contest at a famous vaudeville theater at the age of fourteen, and her career in the theater got its start. She dropped out of school after the eighth grade to concentrate on her career."
Abstract This paper discusses one of the most striking leaders of the 20th century, Fannie Lou Hamer who seems to have become a leader because she defied convention and rose to leadership anyway. The paper discusses her rise to leadership and looks at the differences between Fannie Lou Hamer and other women in the freedom movement.
From the Paper "Hamer's real life existence of an everyday person, led to her particular strength as a leader in a movement that really more than anything needed the support of everyday people to be successful. Hamer actually was many wealthy, educated and well groomed leaders have to portray, a everyday person. Hamer's success as a leader had to do with the fact that she did not have to persuade her followers or even her detractors that she was an everyday person who would benefit from change in the fabric of the culture, she really was and she did not have to prove sacrifice, as she lost almost everything in her fight, and on several occasions was even in danger of losing her life. Her life was what she was fighting for and this influenced many to follow her and build upon her goals. Her detractors found it convenient to challenge her education and appearance and yet, were not successful in showing anything but their own prejudice, which worked in Hamer's favor and showed other leaders' real weaknesses, i.e. an inability to appeal to everyday people."
Abstract This paper explains that Fanny Flagg set her novel, "Fried Green Tomatoes at the Whistle Stop Cafe", in a small Alabama town in the 1930s and jumps to a 1980s Birmingham nursing home. The author believes that it is a story of life, of friendship and love, told through the long-ago voices of the women of the Whistle Stop Cafe. The paper stresses that Idgie and Ruth have a deep love for one another, which is the heart of the novel.
From the Paper "Evelyn Couch has come to the nursing home with her husband Ed to visit his mother, an ill-natured woman. Evelyn has escaped to a waiting area of the home and is devouring candy bars when she first meets Ninny, who sits herself down next to Evelyn. She begins, "Now you as me the year somebody got married"who they married?or what the bride's mother wore, and nine times out of ten I can tell you "but for the life of me I can"t tell you when I got to be so old"It just sort of slipped up on me" (Flagg 3). As Evelyn continues eating candy bars, Ninny continues to ramble on and starts to tell the story of the lives and friendships of the Whistle Stop Caf?."
Abstract The paper looks at Fannie Lou Hamer, civil rights speaker and political activist who was a grass roots leader of the southern Civil Rights movement. The paper provides a biographical sketch about Hamer and explains that the differences between her and other prominent civil rights activists are based on the fact that Hamer was an ordinary person. The paper describes the violence, coercion and many trials Hamer faced as a poor, dark black woman with little education.
From the Paper "One of the most striking figures associated with the civil rights movement is a black woman from rural Mississippi that left a lasting impression in the minds of the nation. This woman was an outspoken and vital asset to civil rights for blacks in the south and especially with regard to the right to vote and the right to representation. Fannie Lou Hamer, civil rights speaker and political activist was a grass roots leader of the southern civil rights movement, beginning her career as an activist by making a bold attempt to register to vote in a region of the United States where countless legal and social obstacles were placed in front of her, as she was black and she was a woman."
Abstract The paper discusses how it is in the field of internal or corporate finance that most innovation has been shown by property development companies over recent years. The range of devices, instruments and techniques has appeared endless, with many American mainstream corporate financing practices being adapted and adopted in global financial markets. The paper examines mortgages for residential properties and discusses what they are and how to obtain one.
Outline:
Introduction
History of Mortgages in Common Law
Traditional Mortgage Funding
Federal Housing Administration
Veteran's Assistance and FannieMae The Development of Mortgage-Based Securities
What Are Mortgage-Based Securities?
Chapter Summary: Obtaining a Mortgage
Step-By-Step Guide
Funding For Commercial Real-Estate
References
From the Paper "A careful review of how capital can be raised on the stock market is beyond the scope of this chapter; however, it is important to note that there are two types of new issue by which this can be achieved. First, the bringing to the market of companies that have not previously been quoted. Second, the raising of additional capital by companies already quoted. The former will normally be effected by an 'offer for sale', whereby an institution such as a merchant bank buys a block of shares from the existing shareholders and offers them to the general public at a fixed price; by a 'placing', where an institution may buy the stock or shares and arrange for the placing of the issue with various funds or companies known to be interested; an 'introduction' when a company already has many individual shareholdings and Stock Exchange quotation simply provides a public market for shares that previously could only be dealt in privately; or a 'tender', which is exactly the same as an offer for sale except that the price of the shares is not fixed in advance."
Tags: commercial, bank, common, law, conveyance, Anglo-American
Abstract This paper relates the history of banks in the U.S. the panic of 1907 and the creation of the Federal Reserve System (the Fed). The author points out that, even though the Fed has exercised its functions, presently, the United States economy is in turmoil due to financial crisis. This financial disorder, the author believes, was caused by the breakdown of subprime mortgage lending; however, the Fed is taking steps, which are described in the paper, to promote financial regulation and financial stability.
Table of Contents:
Introduction
The Federal Reserve System in Today's Economy
The United States History of Banking
The Panic of 1907
The Creation of the Federal Reserve
The Federal Reserve Handling of the Present Day Financial Crisis
Regulations on Mortgage Lending
Regulations on Government Agencies, FannieMae and Freddie Mac
Conclusion
From the Paper "As you can see, banks at this time were not stable without the regulation of the Federal Reserve. There was no required reserve ratio in place yet for banks to make sure they had enough cash on hand to satisfy withdrawal demand. They also could not lend money in the long-term because of this. Also, the fact that banks would get stuck with worthless paper due to not having enough cash on hand without the Fed's required reserve ratio policy, which in turn slowed down the economy as a whole."
Tags: surplus bankruptcy regulation mortgage, government enterprises
Abstract This paper analyzes the capitalistic identity of Alice Walker's main characters within her short story: "1955." It looks at how the lack of individual identity for Grace Mae and Traynor is based on the capitalistic perception of music as a commodity in Walker's ending narrative and not as a spiritually uplifting form of art. The paper also contends that Traynor's material success over Gracie Mae's success reveals the American capitalistic system marginalizing African-Americans beneath the white hegemony of popular music culture. In essence, the paper shows that Alice Walker's dismal ending for Gracie Mae implies a capitalistic identity within a racial construct.
From the Paper "The short story "1955" is a direct reflection of the white American capitalistic system that uses racism to project white superiority over African Americans. Walker uses a capitalistic identity through the conflicting issues of musicality that arise with Grace Mae and Traynor, especially in the resentful narrative Grace implies at the end of the story. At the beginning of the story, Grace Mae is an aspiring African American blues singer that has developed a unique style of singing that has a very lucrative potential. When a young white singer, Traynor, discovers Mae, they begin a relationship that evolves along a capitalistic agenda."
Abstract This paper introduces and analyzes the book "Memoirs of a Woman of Pleasure" by John Cleland (also known as "Fanny Hill"). Specifically, it answers the question, "is Fanny Hill an unrepentant woman or a contrite woman?" The paper draws parallels between another fallen woman in "The Fortunes and Misfortunes of the Famous Moll Flanders" by Daniel Defoe. "Fanny Hill" was a highly controversial and compelling novel about a prostitute, written when prostitution was certainly not an everyday topic of conversation. The book was the first to be banned in the United States. Today, it seems tame compared to our modern day versions of sex, but it still tells a compelling story of how women were forced to survive at a time in history when they had little other method of supporting themselves
From the Paper "Both books are the literary products of eighteenth century England, and the two women who tell their stories in these books reflect the life and social behavior of the time in a manner the average history book cannot. While the impressions of their surroundings are colored by their own distinctly different emotional natures and the picture they describe is limited by the boundaries of their own direct experience, both women reflect in their narratives a concern for what was considered proper and virtuous conduct at that time. They also both reflect the general tendency of that period toward a belief in the basic goodness of man. Moll reforms to illustrate both her goodness and her remorse at the wrongs of her previous life. Fanny decries vice at the end of her narrative because her life is ending on a happy note, and all of her sacrifices have led her to happiness. Both of these women have committed less than virtuous deeds, but both are redeemed at the end of their novels because it is clear they are good and decent women, who did what they did in order to survive."
