Barney Frank Wants Condo Loan Rules To Be Relaxed

Were Congressmen Barney Frank and Anthony Weiner in a coma as the mortgage crisis unraveled recently and dragged down the whole economy with it? Part of the problem was that government was encouraging faulty mortgages to those without the proper credit and those loans served as the foundation for the secondary markets.

This is not to say government alone was at fault. The banks were at fault for lending to those that could not afford the loans, the borrowers were at fault for taking loans that were above their means, and Wall Street was at fault for mortgage-backed securities that were based on subprime loans. But apparently you have to be a Congressman to not learn from your mistakes.

Reuters reports that "two U.S. Democratic lawmakers want 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, the Wall Street Journal said. In March, Fannie Mae (FNM.N)(FNM.P) said it would no longer guarantee mortgages on condos in buildings where fewer than 70 percent of the units have been sold, up from 51 percent, the paper said. Freddie Mac (FRE.P)(FRE.N) is due to implement similar policies next month, the paper said. In a letter to the CEO's of both companies, Representatives Barney Frank, the chairman of the House Financial Services Committee, and Anthony Weiner warned that a 70 percent sales threshold 'may be too onerous' and could lead condo buyers to shun new developments, according to the paper. The legislators asked the companies to 'make appropriate adjustments' to their underwriting standards for condos, the paper added."

To think that Barney Frank is the chairman of the House Financial Services Committee is scary.
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