Barney Frank Calls For an End to Fannie Mae & Freddie Mac

Abolishing Fannie & Freddie?

Barney Frank (D-MA), chairman of the House Financial Services Committee claims that new legislation is likely to propose elimination of Fannie Mae and Freddie Mac.

According to AHN, Frank said that, “the committee will be recommending abolishing Fannie Mae and Freddie Mac in their current form and coming up with a whole new system of housing finance.”

This move wouldn’t be interesting if it was anyone but Frank, but this is a newsworthy move given Frank’s history with Fannie & Freddie. The quote below says it best:

Real Estate Blogger Tom Royce said, “Frank, you should remember, is the Congressman who said that the companies were in great shape just before they imploded and are now on the hook for over 400 billion in public assistance. Oh, and Frank is also the one who drove the companies into that situation as he used them as tools of a social experiment forcing lending downstream to borrowers who could never repay their loans. But ignore all that, it does not matter anymore. Now Congressman Barney Frank has a real plan. Just get rid the evidence of Congressional excess and experimentation and let’s start again.”

Barney and Herb and what now?

We would add that this is the Barney Frank who has repeatedly been accused of a Fannie Mae conflict of interest given that he worked closely with his partner Herb Moses, “who was Fannie’s assistant director for product initiatives. Moses worked at the government-sponsored enterprise from 1991 to 1998, while Frank was on the House Banking Committee, which had jurisdiction over Fannie,” according to Fox News. Although Frank and Moses have broken up, sources claim they have remained friends over the years. We wonder what Herb thinks of abolishing Fannie and Freddie?

What is the root cause of this move? Many of Frank’s political moves have been allegedly traced back to personal gain, so is this a revenge move or maybe there is a way Frank can benefit from being the architect of “Fannie Mae & Freddie Mac II: Back With a Vengance!”