Tuesday, July 7, 2009

Barney Frank Will Never Learn!

Barney Frank and Anthony Weiner wrote a letter to the CEO's of both FannieMae and FreddieMac, warning that a 70 percent sales threshold "may be too onerous" which could lead to condo buyers Shunning new developments. Hello!!! Mr. Frank, that's what we need right now. A slow down in Development. We have over developed for how long now? The legislators asked the companies to "make appropriate adjustments" to their underwriting standards for condos. I read this on Reuters on 6-22-09 and was amazed that there was not more coverage on it. I did hear Glenn beck mention it a few days later, but almost no major coverage before or after that.

Didn't we just learn the hard way what happens when you lower lending standards. What I find more interesting is that this was not the first time it's ever happened. After a little research I find that each time the government as stepped in to make lending easier the end result is higher foreclosures. The Situation in the 30's,60's and 1980's were not as bad as today, but the numbers were a mere fraction of what we see today all across the board. In each instance however Congress made some move to try and ease the credit requirements so people could own their own home. Just like this time with the Community Reinvestment act of 1977, which Congress used to bully financial institutions into lending to folks they would not ordinarily lend to.

The foreclosure and delinquency rates on single family homes is out of control right now. Condo's are not much better, and Barney Frank wants to open the flood gates again, already, while we're not even done feeling the effects of the last wave. Many still predict that the market we are in right now is a "Calm Before the Storm". Add to this the havoc our economy will suffer due to Cap and Trade if it passes as well as Universal Health Care and were in for wild ride. All I can say right now is that all of us who grew up with everything we ever needed and mostly everthing we wanted may get a chance to see those bread lines our Grand Parents and Great Grand Parents told us about.



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