Frank calls on Fannie and Freddie to assume more risk on condo mortgages. Joined by Democrat Wiener of NY. Sheer genius.
Real Genius
J.G. Thayer - 06.22.2009 - 10:02 AM
Congressman Barney Frank (D-MA) has often been called “the smartest guy in Congress.” That he is very intelligent is clear — but his actions show that simple brainpower is rarely an indicator of wisdom.
Congressman Frank, it should be recalled, was one of Fannie Mae’s and Freddie Mac’s staunchest defenders, shielding them from scrutiny and oversight right up until they collapsed. And at that point he had the audacity to blame their failure not on those who had enabled the misconduct, but on those who had tried — and failed, thanks to Frank and his allies — to rein those bodies in.
Well, Frank is back to his old games. He’s leaning on Fannie and Freddie to ease restrictions on new condominium mortgages. The two had recently announced changes to their rules on when they would guarantee mortgages on condominium complexes showing signs of financial trouble. Frank wants them to assume greater risk and shift the exposure from developers and buyers onto the federal government.
Stop me if you’ve heard that line of argument before.
And recently, as part of its bankruptcy reorganization, GM announced that it was closing facilities around the nation. This was somewhat buried amid a flurry of larger developments, such as the demise of entire brand lines and the shuttering of dealerships, but still held some significance to a lot of people — including 80 people in a to-be-closed GM parts distribution center in Norton, Massachusetts. More specifically, 80 constituents of Congressman Barney Frank.
Frank immediately leaned on GM (at that point firmly in the hands of the federal government) to spare the Norton plant and its 80 jobs (which, apparently, hasn’t hired anyone new since the mid-1980’s). The GM execs, with this new calculus (”one of our new CEOs likes this plant”), reconsidered and realized that it does make sense to keep this warehouse open for at least another year.
As noted, you’d be hard-pressed to find a more intelligent member of Congress. It takes a tremendous intellect to be so colossally, consistently wrong — and cause such harm.
commentarymagazine.com
Changes Urged to Rules on Condo Loans
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By NICK TIMIRAOS
Two Democratic lawmakers are calling on Fannie Mae and Freddie Mac to relax recently tightened standards for mortgages on new condominiums, saying they could threaten the viability of some developments and slow the housing-market recovery.
In March, Fannie Mae said it would no longer guarantee mortgages on condos in buildings where fewer than 70% of the units have been sold, up from 51%. Fannie Mae also won't purchase mortgages in buildings where 15% of owners are delinquent on condo association dues or where one owner has more than 10% of units, which the firm sees as signals that a building could run into financial trouble. Freddie Mac will implement similar policies next month.
In a letter to the chief executives of Fannie and Freddie, Reps. Barney Frank, the Massachusetts Democrat who is chairman of the House Financial Services Committee, and Anthony Weiner (D., N.Y.) warned that the 70% sales threshold "may be too onerous" and could lead condo buyers to shun new developments. The legislators asked the companies to "make appropriate adjustments" to their underwriting standards for condos.
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online.wsj.com |
