Forum Topic-Congress is Telling Fannie to Change the Rules

Creighton & Associates would like to present a new forum topic question, “Should Congress manipulate the underwriting standards of Fannie Mae and Freddie Mac?”  Congress does have a history of manipulating Fannie Mae and Freddie Mac.  This isn’t a new occurrence due to the recent economy. Congress passed some serious legislation in the late ’80’s and ’90’s forcing Fannie and Freddie to LOOSEN their guidelines for providing loans to home owners.  The goal, “everyone in America should share the dream of home ownership.”

Fannie Mae Headquarters-Image Flickr.com

It can be argued that the government forcing Fannie and Freddie to lend to unqualified home buyers 20-years ago has been a primary factor with the economic mess of today.  You won’t hear that mentioned in the media, people like to forget events of 20-years ago, especially if it doesn’t match the current agenda.

Regardless, Congress and Representative Barney Frank (he was there 20-years ago doing the same thing) are at it again!  In a recent article on reuters.com, Congress is pushing to force Fannie and Freddie to loosen their guidelines related to providing home loans on condo buildings.  This time, the legislation is focused on loosening the underwriting guidelines for the property, verses the individual borrower.

Now I’m actually “on the fence” regarding this recent issue.  I have many builder clients who are trapped with vacant completed condo buildings, due to the fact that Fannie and Freddie won’t lend until certain thresh-holds are met.  At the same time, I can’t help but think, “here we go again.”

Readers, we welcome and look forward to your thoughts and opinions.  To read the full version of the article, “Fannie, Freddie asked to relax condo loan rules: report” click here.