NY Post - June 28, 2009
Rep. Barney Frank says that unless Fannie Mae and Freddie Mac relax their recent tightening of mortgage standards on new condominiums, the economic recovery could be threatened.
That would be the same Barney Frank who famously boasted that the two federal agencies -- which lost billions by making improvident loans -- were "fundamentally sound financially and [can] withstand . . . disaster scenarios."
Then came the disasters.
But to Barney Frank, Fannie and Freddie are essentially taxpayer-funded social-service agencies whose mission is to turn all Americans into homeowners -- whether or not they can afford it.
Fannie and Freddie recently announced that they would no longer guarantee mortgages on condos where fewer than 70% of the units have been sold; the previous threshold was 51%.
The agencies also said they'd no longer guarantee mortgages in buildings where 15% or more of the owners are behind in their condo dues or where more than 10% of the units are held by a single owner.
And they've raised fees on buyers whose down payment is less than the standard 25%.
The tightened standards are intended to limit the exposure of the two agencies -- which purchase or guarantee most US mortgages -- in buildings with potential financial problems.
Obviously, this means that some condo owners may find it more difficult to sell their units -- because buyers will find it more difficult to get mortgages.
Enter Barney Frank --
Here we go again. (continues...)