Politics is Stranger Than Fiction
Fannie Mae and Freddie Mac lost mega-billions guaranteeing bad mortgages. I’m guessing most people reading this are aware that US taxpayers spent a bundle bailing out the two agencies. That would seem to put you ahead of congressmen Barney Frank and Anthony Weiner.
With no trace of irony, these two are calling on Fannie and Freddie to relax new, tougher lending standards. Previously the agencies would guarantee mortgages on condos in new buildings where at least 51% of units were sold. In March Fannie raised the minimum to 70%, and Freddie is set to follow suit in July.
In a letter to Fannie’s and Freddie’s CEOs, the two professional politicians argue that the tougher standards will keep buyers away from new developments. The mortgage giants did not comment immediately, but safe to say they didn’t adopt this new rule arbitrarily. They see a building with heavy vacancies as having unacceptable risk. Considering it’s my money at risk, I applaud them. I just wish they took more actions like this over the past 30 years.