Incredible repeat of errors past

http://tinyurl.com/kmh7s8
Barney the Underwriter Telling Fannie Mae to take more credit risk. Now there's an idea.
Back when the housing mania was taking off, Massachusetts Congressman Barney Frank famously said he wanted Fannie Mae and Freddie Mac to "roll the dice" in the name of affordable housing. That didn't turn out so well, but Mr. Frank has since only accumulated more power. And now he is returning to the scene of the calamity -- with your money. He and New York Representative Anthony Weiner have sent a letter to the heads of Fannie and Freddie exhorting them to lower lending standards for condo buyers.
You read that right. After two years of telling us how lax lending standards drove up the market and led to loans that should never have been made, Mr. Frank wants Fannie and Freddie to take more risk in condo developments with high percentages of unsold units, high delinquency rates or high concentrations of ownership within the development...
Prudence is so unDemocratic ( as in party ) that it has to be nipped in the bud.
Fannie, Freddie asked to relax condo loan rules: report(Reuters) - 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.
In addition to the 70 percent sales threshold, Fannie Mae will also not purchase mortgages in buildings where 15 percent of owners are delinquent on condo association dues or where one owner has more than 10 percent of units, as the firm sees these as signals that a building could run into financial trouble, the paper added...****The prices of condos are taking a back seat to the dues liabilities that remaining condo owners have to bear and that would affect new buyers. A domino effect occurs where the dues go up as more and more owners default and it either becomes too onerous to pay and/or the buildings go into disrepair. It's amazing that legislators think they can reverse laws of economics ( and probably physics ) by fiat. Of course, that's what got us all into this mess in the first place, although Frank is still around, pontificating in the same direction as before and not acknowledging his role. ****