Guess Who Asks Fannie & Freddie To Relax Lending Rules

Discussion in 'Economics' started by pspr, Jun 24, 2009.

  1. pspr


    Doesn't it seem a bit queer that Barney Frank would ask Fannie and Freddie to relax their mortgage lending rules -- again?

    (Reuters) - 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.

    In an interview with the paper, Weiner said the rules have "had a real chill on the ability to get these condos sold," at a time when prices of condos have fallen enough to attract potential buyers.

    In addition to the 70 percent sales threshold, Fannie Mae will also not purchase mortgages in buildings where 15 percent of owners are delinquent on condo association dues or where one owner has more than 10 percent of units, as the firm sees these as signals that a building could run into financial trouble, the paper added.

    Both Fannie and Freddie are preparing a response to the lawmakers, according to the paper.

    Fannie Mae and Freddie Mac could not be immediately reached for comment by Reuters.
  2. No, silly, there's nothing wrong with this scenario.

    The last time Freddie and Fannie were pushed to lend more, it was bad because house prices were trending up and the economy was doing well.

    This time, it's okay since the house prices are deflating, jobless rates are soaring and default rates are reaching all-time highs.

    ... wait a second...
  3. lrf3


    haha you said queer
  4. <img src=""></img>
  5. Mav88


    Is he beholding Freddie's sac as Barney frankly asks if he may leverage your fanny?