Barney Frank defender of Fannie Mae before housing market collapse now wants to abolish the government agencyFinance Wednesday, August 18th, 2010
Rep Barney Frank (D) Massachusetts and chairman of the House Financial Services panel said on Tuesday that he believes that Fannie Mae and Freddie Mac should be abolished. Frank also said “The only question is what do you put in their place.”
Fannie Mae and Freddie Mac received $150 billion dollars in taxpayer bailout money back in 2008 when the democratic congress passed a bill that then president Bush signed saving the agency from collapsing. Between Fannie and Freddie and the Federal Housing Administration they back 90% of all new home loans.
Frank stated that “not everyone should be a home owner” and that the federal government should not be used as a “backstop” for the mortgage crisis.
Franks stance on Fannie Mae and Freddie Mac is a stark turnaround from his position back in the Bush presidency when he and fellow democrats vigorously opposed the Bush administration’s efforts to rein in Fannie Mae who was forcing banks to give out loans to people who couldn’t afford them.
Back in September of 2003 Frank told the NY Times “These two entities – Fannie Mae and Freddie Mac – are not facing any kind of financial crisis. The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”
Then in October of 2003 Frank said ”he worried the Treasury Department “would sacrifice activities that are good for consumers in the name of lowering the companies’ market risks.” When Republicans introduced a bill to Congress in 2005 to regulate Fannie Mae democrats led by Barney Frank and Chris Dodd killed the bill which ultimately led to the collapse of the housing market and eventually sent the country into a recession.
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