Frank Wants Fannie & Freddie to Lower Standards

This is pretty hilarious. Barney Frank (D-MA) wants Fannie Mae and Freddie Mac to lower its lending standards to condo buyers. Why? Because their rules "may be too onerous."

Fannie and Freddie have restricted loans to condo buyers in these situations because they represent a red flag that the developments -- many of which were planned and built at the height of the housing bubble -- may face financial trouble down the road. But never mind all that. Messrs. Frank and Weiner think, in all their wisdom and years of experience underwriting mortgages, that the new rules "may be too onerous."

And to make it even more hilarious, Frank seems to think that lowering the lending standards for the nationalized Fannie and Freddie will not increase taxpayer exposure to bad loans:

And in a display of the wit for which Mr. Frank is famous, the letter writers slyly point out that higher lending standards won't reduce taxpayer exposure to bad loans because the Federal Housing Administration has even lower standards for condos. "While the underlying goal may be to reduce taxpayer exposure relating to the current conservatorship of the GSEs [government sponsored entities], such a goal would not have such an effect if it merely results in a shifting of loans from the GSEs to the FHA." Tougher lending standards will merely shift market share from one government program to another, so what's the point in being cautious?

Yeah. Having two companies who should have been wiped off the face of the earth lowering their lending standards is a wonderful idea...