Barney Frank Tries to Re-Destroy the Housing Market

I realize that "re-destroy" is probably not a word, but it works for this situation:

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.

Why would Frank engage in the same activity that brought Fannie Mae and Freddie Mac to their knees and resulted in billions of losses to taxpayers? Simple, he got away with it the first time. Barney Frank paid no price for his part of the Fannie Mae debacle so he doesn't see any risk in interfering again.

A letter from a Congressman is a veiled threat that says if you don't change things the way I suggest, we're going to come after you and you won't be there anymore. Unless someone with common sense steps in, Frank will be setting Fannie Mae up for the next failure.