I'm Barney Frank and I approve this message

[sokinwet]

Sometimes connecting those dots comes out with a distorted picture. Fannie & Freddie have actually been arguing against PMI for loans over 80% loan to value for quite some time. This policy results in more "risk" for the Fannie & Freddie portfolio and less $$ for PMI companies... certainly a point for debate.

It's really the exact opposite of what you you stated. Many 1st time buyers are priced out of the market because they can't afford the initial escrow for PMI and the increased monthly payments that will carry forward until that loan is below the 80% LTV ratio. If you look at how your mortgage pmts. are applied heavily towards the interest you realize that most will be paying PMI for a long portion of their mortgage term. Interestingly, the trend in many Gov't sponsored mortgage programs, the MA Soft 2nd Program for example, has been towards "self insured" mortgages rather than requiring PMI. When you say it was Fannie/Freddie's mission to put people into homes they couldn't afford you're ignoring the fact that most mortgage programs "require" debt ratio's in that 33% range. This is where the "stupidy/greed" factor comes into play where people were qualified based on an ARM and where they made some big mistakes in actually buying these loans and in turn selling as mortgage backed securities. It ain't as simple as most people think when you're trying to point fingers at who is at fault.

[fishbones]

Originally Posted by sokinwet

Sometimes connecting those dots comes out with a distorted picture. Fannie & Freddie have actually been arguing against PMI for loans over 80% loan to value for quite some time. This policy results in more "risk" for the Fannie & Freddie portfolio and less $$ for PMI companies... certainly a point for debate.

It's really the exact opposite of what you you stated. Many 1st time buyers are priced out of the market because they can't afford the initial escrow for PMI and the increased monthly payments that will carry forward until that loan is below the 80% LTV ratio. If you look at how your mortgage pmts. are applied heavily towards the interest you realize that most will be paying PMI for a long portion of their mortgage term. Interestingly, the trend in many Gov't sponsored mortgage programs, the MA Soft 2nd Program for example, has been towards "self insured" mortgages rather than requiring PMI. When you say it was Fannie/Freddie's mission to put people into homes they couldn't afford you're ignoring the fact that most mortgage programs "require" debt ratio's in that 33% range. This is where the "stupidy/greed" factor comes into play where people were qualified based on an ARM and where they made some big mistakes in actually buying these loans and in turn selling as mortgage backed securities. It ain't as simple as most people think when you're trying to point fingers at who is at fault.

Thanks for making it a little clearer for me. I get headaches when I try to think too much about this financial mess.

I'm still confused a bit, though. Fannie Mae works with banks to make sure they can fund mortgages to people. Freddie Mac basically does the same thing to ensure that people can get money to buy homes.

Since many of these people still need PMI (whether Fannie and Freddie think they should have to get it or not), doesn't that affect the loan insurers who need to pay in the event of a loan default? That was my whole, albeit messy connection between Frank and AIG.

[vineyardblues]

OK, I know that Barney was in charge of the Fanny May thing and
now he is in charge of AIG thingy ??
Is this the same job ? Please tell me Before I go off and said some bad chit about this guy

[fishbones]

Originally Posted by vineyardblues

OK, I know that Barney was in charge of the Fanny May thing and
now he is in charge of AIG thingy ??
Is this the same job ? Please tell me Before I go off and said some bad chit about this guy

Who said he was in charge of AIG? I haven't heard anything about that.

[vineyardblues]

Not in charge of AIG, but over looking what happens with it as He did such a great freeking job watching over the Fannie Mae mess.


“In any other area of American life, this track record would get a man run out of town. In Washington, he’s hailed as a sage whose history of willful error will be forgotten faster than taxpayers can write a check for $200 billion.” - The Wall Street Journal on Rep. Barney Frank, Sept. 9, 2008

The only thing more painful than watching 180 billion tax dollars swirl down the AIG drainpipe is listening to Barney Frank bloviate about it.

I don’t know The World’s Most Expensive Legislator personally, but I hear he’s quite a cut-up at cocktail parties. However, as legislator and politician, he is an unmitigated disaster. Frank combines the economic success of AIG, the business ethics of Enron and the personal accountability of Ruth Madoff.

Frank began his career opposing Reaganomics, an opposition that stubbornly resisted 25 years of nearly constant economic growth. In the 1990s, Frank sat on the Banking Committee regulating Fannie Mae, even as his then-partner, Herb Moses, worked as a Fannie exec.

Is it a coincidence that Frank has been a die-hard advocate for expanding Freddie/Fannie at any cost?

Since at least 2002, Frank fought an ever-growing drumbeat of calls to slow down the Fannie Mae/Freddie Mac train wreck.

In 2003, he famously said that Freddie and Fannie were “not in a crisis,” that they were “fundamentally sound financially.” He repeated that expert testimony in 2005, all the while rejecting the argument that the taxpayers were responsible for Freddie and Fannie’s bills.

And in 2007, he actually proposed raising the caps on Fannie/Freddie’s portfolios - exposing taxpayers to even more risk - and then dumping the new money into (drum roll, please) even more subprime mortgages.

Less than a year later, the Fannie/subprime/derivatives catastrophe was upon us. And the cheerleader for all three? Our Barney.

Which is why it so astonishes that anyone takes him seriously as the self-declared watchdog of Wall Street. Please, Barney, just shut up.

Frank is great at blustering his way past reporters and his Econ 101 liberal constituency out in Newton. But watching him yesterday afternoon questioning AIG chief Ed Liddy, Frank was revealed as the picayune partisan he truly is.

Where was the “grilling” of this AIG fat cat we were all promised? Where was the “A-ha!” moment as Frank revealed the private-sector greed and corruption behind the bailout mess?

Nothing. “Pitchfork Barney” curled up like a kitten at Liddy’s feet, purred a few inconsequential comments and then slinked away.

If there’s anyone in Massachusetts with the street cred - make that “cash cred” - to lecture the execs of AIG, it’s Joe Petrucelli of East Bridgewater Savings Bank.

Under his leadership, East Bridgewater has no delinquent loans, no homes in foreclosure and even made a profit during the last quarter. And not one thin dime in bailouts, either.

And what did Petrucelli get for his trouble? Slapped with a citation from the FDIC for not making enough “Community Reinvestment Act” loans - also known as “Barney Frank” loans.

Michael Graham hosts a talk show on 96.9 WTKK.
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