Newt Gingrich, Mortgage Genius

Five years back who would have ever thought that Fannie Mae and Freddie Mac would be an issue in a GOP primary? To the uneducated and ignorant the housing crisis was caused by the two GSEs. To anyone who has been in this business for more than say, seven years, they know the housing implosion had multiple fathers, the GSEs being on a long list, many rungs below Wall Street. Several weeks ago when news broke that GOP presidential hopeful Newt Gingrich was a paid consultant to Freddie Mac the former House Speaker had to explain what exactly he was doing for the mortgage giant. One TV interview I caught had Newt explaining (in a general way) that he told Freddie not to invest in crappy subprime loans, which at the time I thought was a load of buffalo chips. Newt wasn’t hired to give advice to the GSE about the mortgage market and credit risk. He was hired to help the GSE maneuver the tricky political waters of Washington. But it appears that the general media has hardly scratched the surface on the issue. Candidate Gingrich, to clear his name with the voters, needs to explain in detail what he really did for Freddie Mac – and which executives at the company he dealt with. We all know that he was paid for his services. After all, that’s what many elected officials do after they leave office: they offer professional advice and they lobby – and they expect to be paid handsomely. That’s what the game is all about.