Wednesday, August 18, 2010

Barney Frank: Nix Fannie and Freddie

I had to reread this the second time to make sure it was not a joke. Barney Frank, the staunchest supporter, along with Chris Dodd, of Fannie and Freddie in Congress and also one of the biggest proponents of low cost mortgages, admitting it is not advisable to promote homeownership to those who cannot afford it. Don't you believe it. If you read the whole article, he only says the hybrid, private/government Fannie/Freddie model is not the solution. He wants the Government to directly subsidize the mortgage industry, or do away with the private mortgage industry altogether.

Barney is the one who stopped regulation of Fannie/Freddie back when Bush warned of the impending collapse. He said there was no problem. Duh!

Together, Fannie and Freddie and the Federal Housing Administration now back 90 percent of new U.S. home mortgages.

Fannie and Freddie have received $150 billion in taxpayer bailout money.

In the Fox Business interview, Frank also was critical of public policy that promoted homeownership at any cost. He also said the federal government should not be a "backstop" in guaranteeing mortgages.

"There were people in this society who for economic and, frankly, social reasons can't and shouldn't be homeowners," Frank said. "I think we should, particularly, stop this assumption that you put everybody into homeownership."

"Public policy has been too much to try to push people into homeownership."
Barney Frank: Nix Fannie and Freddie

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