Politicians "Out-House" Award - Barney Frank

I am sure that by now we are all aware that Fannie Mae is the nation's largest underwriter of subprime home mortgages and has been the subject of what amounts to a takeover by the Federal government with a huge cash (read that as your tax dollars) infusion in the hopes of keeping Fannie Mae afloat. Basically, a subprime mortgage is a loan made to an individual who your neighborhood bookie would not do business with.

Over the recent past, damaging accounting scandals, questionable management, inadequate capital reserves and a crashing residential real estate market proved too much for Fannie Mae. During an election year, in which the housing market meltdown has become a central issue, the market lost confidence in the government-sponsored mortgage entities and their financing costs rose to unsustainable levels.

As soon as Fannie Mae went belly-up, Rep. Barney Frank (D-Mass.) immediately blamed the Republicans for the mortgage giant's failure. However, this is where things get interesting. Barney Frank sits on the House Banking Committee which has jurisdiction over Fannie Mae. Back in 1991 Barney Frank worked to loosen regulations for two and three family homes even though those mortgages were defaulting at twice and five times the rates of single homes respectively. At the same time, Mr. Herb Moses, a Fannie Mae executive was also championing the relaxation of these regulations.

In 1994, the Department of Housing and Urban Development recommended imposing tougher regulations on Fannie Mae to ensure that lender's liquidity but, once again, Fannie Mae (Herbert Moses) and Barney Frank made sure no such regulations were imposed.

Whoops, I almost forgot to mention that Barney Frank and Herbert Moses had been lovers since 1987. Can anyone say conflict of interest?

In 1999, Barney Frank's House Banking Committee allowed Fannie Mae to further reduce restrictions on loans in an effort to increase home ownership among minorities and low income customers. At that time even the New York Times reported that if Fannie Mae fails, "...the government will have to step up and bail them out..."

During a July 2008 interview, when the handwriting was on the wall, Barney Frank, as the head of the House Banking Committee, stated "I think this is a case where Fannie and Freddie are fundamentally sound, that they are not in danger of going under..." Unfortunately, not only for Barney but for the rest of us as well, less than two months later, Fannie Mae went belly-up!

So now, after years of providing essentially no governmental oversight for Fannie Mae while maintaining a long term relationship with an executive of that company and continually blocking GOP lawmakers from imposing stricter regulations on this mortgage giant, Congressman Barney Frank has the audacity to blame the mortgage giant's failure on the Republicans. The fact that this poor excuse of an elected representative of the American people does not have the backbone to admit any responsibility in this train wreck earns him the "Politicians Out-House Award" by this writer.