Economy Alarm: Democrats Push For New Housing Meltdown?
Democrats Push For New Housing Meltdown?
Leading Dems Want Looser Lending Standards, Refuse to Learn from Their Own Mistakes
Democrat Admits His Party Got it Wrong on Fannie and Freddie
“Like a lot of my Democratic colleagues I was too slow to appreciate the recklessness of Fannie and Freddie. I defended their efforts to encourage affordable homeownership when in retrospect I should have heeded the concerns raised by their regulator in 2004. Frankly, I wish my Democratic colleagues would admit when it comes to Fannie and Freddie, we were wrong.” (“Rep. Artur Davis Admits Democrats Were ‘Too Slow’ to Recognize Fannie, Freddie Recklessness,” Fox News, 10/1/08)
Top Democrats Want Fannie and Freddie to Relax Lending Standards Again
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 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 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. (“Fannie, Freddie asked to relax condo loan rules: report,” Reuters, June 24, 2009)
To read the full article, click here: http://www.reuters.com/article/GCA-Housing/idUSTRE55L39120090622
###