Will they ever learn in Washington?

The mad geniuses in Washington have their paws in the mortgage honey pot again. From the Wall Street Journal:

Back when the housing mania was taking off, Massachusetts Congressman Barney Frank famously said he wanted Fannie Mae and Freddie Mac to "roll the dice" in the name of affordable housing. That didn't turn out so well, but Mr. Frank has since only accumulated more power. And now he is returning to the scene of the calamity -- with your money. He and New York Representative Anthony Weiner have sent a letter to the heads of Fannie and Freddie exhorting them to lower lending standards for condo buyers.

Comments

[Paradigm Shift]

"so what's the point in being cautious?" - Barney Frank.

Fear not we've been told the Obama administration does not want to be in the business of real estate or automobiles or even healthcare.

So this is another example of a power grab .. 'they' don't care what it costs or how it's paid for.. can't be told no.

[Fuzzy Bear]

"can't be told no."

Barney and crew missed the boat when the saying came out, Just Say NO!

[Alex]

Barney Frank and Chris Dodd are criminals. They need to be unceremoniously forced out from their positions and made to walk in public in orange jumpsuits.

[Affordable Houser]

Blaming affordable housing for the mortgage mess is ridiculous. Look at the default rates for most affordable housing programs through local governments in Tampa Bay and Florida, and you will see that they are lower than the national average
It is not credit scores or the amount of downpayment that determines whether someone gets foreclosed, it is 2 things -external factors (job loss, divorce, and in the past insurance) and internal factors (was the mortgage product containing long term affordability). Take away the balloons, the adjustable rate loans and not let people have high front end ratios, and there would be far less foreclosures than there are now

[Paradigm Shift]

The average Joe could get a loan for more than they could afford without income verification, they put nothing down so walking away was easy, and living on the edge maxed out fiscally with balance sheets out of whack, and nothing in savings to plan for a rainy day (in response to your example job loss and/or divorce). Nobody in the industry thought houses would go down in value and people hedged on that carelessly planning for the best and ignoring the worst. Gubment regulation was nowhere to be found and money was flowing so everyone was fat and happy. This was not just Washington's fault but a perfect storm with multiple players all working together in perfect harmony for disaster. You aint seen nothing yet however.. just wait a couple of years for "recovery" and then inflation to kick in.. lock watcha got in fixed APR's while they are low and payoff anything with a variable rate or you will be part of the next wave of problems for the rest of the taxpayers remaining to bailout.

[Tino]

"Look at the default rates for most affordable housing programs through local governments in Tampa Bay and Florida, and you will see that they are lower than the national average"

Care to back that up with some numbers? Besides, your point is moot. If the default rates for affordable housing programs is 20% and the national average is 18%, you have only helped prove that these deadbeat loans were causing the mortgage mess.