September 11, 2003

The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.

Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.

The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.

The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac — which together have issued more than $1.5 trillion in outstanding debt — is broken. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates.

”There is a general recognition that the supervisory system for housing-related government-sponsored enterprises neither has the tools, nor the stature, to deal effectively with the current size, complexity and importance of these enterprises,” Treasury Secretary John W. Snow told the House Financial Services Committee in an appearance with Housing Secretary Mel Martinez, who also backed the plan.
Significant details must still be worked out before Congress can approve a bill. Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing. ”These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ”The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.” Representative Melvin L. Watt, Democrat of North Carolina, agreed. ”I don’t see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,” Mr. Watt said.

Seeing Barney Frank on TV for the last few days as an expert over this current debacle has severely curbed my appetite.

Franks, Dodd, Kerry, & Obama are the leading experts on those institutions if payment from those institutions is equivalent to knowledge of them.

Damnit, Franks is on right now!! They've reached a tentative agreement on the bailout and he is patting himself on the back, rather than explaining the agreement.

Fannie stock has been running hard :hugeassgrin: it looked unstoppable until 12:28est, the latest developments aren't doing much.

Man, that's brutal. I would love to hear Barney's explanation of that quote.

I became a big fan of Barney Frank's during the Clinton impeachment hearings. He repeatedly ran intellectual circles around the Republicans on that Committee.

Franks is no dummy, but he seems to have missed it on Fannie and Freddie. On the other hand, the whole debacle is so confusing, I don't know what to make of that quote.

To this day he is arguing to keep down payment assistance with FHA, which makes FHA a 100% loan in a loophole kind of way. Fundementally I'm against it because I believe that debtors have a lower chance of defaulting because of the out of pocket investment, the greedy part of me wants Barney to get his way because it enables more people to buy homes.

I just heard somebody say yesterday that a lot of the people who had bbought houses in recent years had no business buying houses and were not "home owner material."

Clearly, not everybody should be a homeowner. If you have little or none of your own money invested in your home, you're really more like a renter. If thinkgs go South, you can just pack up and walk away, as many people are now doing.

I think the notion of OWNING your own home, of actually paying off your mortgage, is one that should be revived.

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" We have nothing to fear but the main stream media itself . . . ."- Adapted from Franklin D Roosevelt for the 21st century

OBK #55

1998 Lincoln Continental - Sold
Max 1984 300TD 285,000 miles - Sold
The Dee8gonator 1987 560SEC 196,000 miles - Sold
Orgasmatron - 2006 CLS500 90,000 miles
2002 C320 Wagon 122,000 miles
2016 AMG GTS 12,000 miles

Bump. Gotta love Barney Frank...

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1992 300D 2.5T
1980 Euro 300D (sadly, sold)
1998 Jetta TDI, 132K "Rudy"
1974 Triumph TR6
1999 Saab 9-5 wagon (wife's)

Translation of Barney Frank's statement is easy: "My checks from Fannie & Freddie are in the mail."

That is the way I see it too.

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Jim

zing!

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1987 300D (230,000 mi on a #14 head-watching the temp gauge and keeping the ghost in the machine)
Raleigh NC - Home of deep fried sushi!

Why did we not see the Sunday TV Talk shows holding Senator Frank accountable for his statement that there was no problem?

Some would say it is the liberal bias in the media, but many of you would not agree. So why do they not interview him, and other dem leaders and ask why?

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1982 300SD " Wotan" ..On the road as of Jan 8, 2007 with Historic Tags

FYI, Franks is a House member.

Carry on.

B

I'm glad Frank stopped the creation of a new federal agency expanding executive branch powers. As I'm sure all small-government apologists are. Right?

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1984 300TD