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Online Extra: "The Prospects for Housing Are Terrific"

A: Not for me. That's always been my style. When I go up to the Hill, I usually go by myself. Doing these things through intermediaries, an awful lot gets dropped. I learned when I did the budget that going up and just talking to people long before there are any negotiations -- long before there are any demands -- goes a long way. You don't end up with bureaucratic negotiations. You get into more fights by people fighting over things that you don't care about because your intermediary might not know what to care about and what not to care about. Whereas, if I'm there and if he says, "If you do this, it's a deal," I can say, "Fine, done. Let's move on."

Q: Some of your critics are worried about the amount of debt you carry on your books. Your response?

A: We have slightly less debt than we have mortgages. We buy mortgages by issuing debt. It's almost like saying to a bank, "I think you have too many deposits." Well, they have the deposits because that's how they make the loans.

Q: Fannie Mae has been getting more criticism recently from Capitol Hill and from Wall Street. How do you deal with it?

A: My approach generally is first to tell everybody to calm down. And second to try to deal with [criticisms] factually. It doesn't do us any good to engage in name-calling or hysterics or to say "We have nothing to say to the press. Our record speaks for itself." If there are things we can do to make things better, we just do them. We don't say, "We're not going to give into pressure." So when it looked like voluntarily registering with the SEC was a good thing, we said, "Let's just do it. Let's do it before anybody wonders why we're not doing the voluntary thing that makes sense." I think that's held us in pretty good stead over a pretty volatile time.

Q: Why do you think you get so much scrutiny?

A: It comes with the turf of being as big as we are. We're too big, we affect too many markets, what we do is too central. So I don't even have a dream of someday this will all calm down and no one will ever say anything about us, no one will ever have a question. That's just not reality.

Q: This spring, you spoke to Howard University about the importance of homeownership to African Americans. I watched a tape of that speech and I could tell you were talking about more than just your business. What was behind that speech?

A: Well, it is more than just business. It has one probably general root, and then a more specific one. Generally, I look at the 100 years from the end of the Civil War to the middle 1960s as 100 years of repression of former slaves. You had a hundred years of discrimination, prevention of the ability to gather property, and, if they did gather property, it could easily be taken away. Everyone knows about the political and social repression. We haven't paid as much attention to the economic repression. The lingering effects of that are far greater than the lingering effects of voting repression and the social apartheid.

When people ask me, "Why are we getting black CEOs now?" I say, look, it takes about 30 years to create a CEO. When did blacks first get into major corporations? Go back about 30 years. Voila! There's no great mystery to it. So the biggest problem of black wealth is lack of homeownership. When you talk about average people, their net worth comes from their home. Not having a high homeownership rate is devastating to blacks.

Q: So that's the general root of the Howard speech. What was the specific one?

A: My father didn't finish high school. My mother finished sixth grade. They were both laborers their whole lives. They never made more than $15,000 each. They raised a bunch of kids -- seven. My father always thought of himself as a poor man. He never really had any material possessions, except for a house. The house we first lived in, the house he bought and rehabbed and rented out, and the house the family lived in that he built with his own hands.

When [my parents] died, they left an estate of roughly $300,000. How did these people who made $15,000 a year leave an estate of $300,000? It was all from equity in houses. So I've seen it dramatically. In America, when you own something, it works for you. The speech was one that embodied both my historical sense, but also a very personal experience of the power of homeownership to create wealth for ordinary people.

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