The Mortgage Wars: Inside Fannie Mae, Big-Money Politics, and the Collapse of the American Dream

CHAPTER 13A Compromise Attempt Turns into Full-Scale War

FANNIE MAE’S RELATIONSHIP WITH OFHEO, WHICH HAD BEEN difficult since Armando Falcon became director in the fall of 1999, worsened noticeably after Falcon hired Steve Blumenthal as counsel to the director in July 2002. Blumenthal came to OFHEO from Schwab Washington Research Group, where he followed Fannie Mae and Freddie Mac as an analyst specializing in financial services. Prior to moving to Schwab, Blumenthal had served as counsel to the House Energy and Commerce Committee and then been vice president and director of regulatory relations for the Securities Industry Association (SIA, now SIFMA), a trade group representing securities firms, banks, and asset managers.

Tensions with OFHEO ...