Barney Frank asking Fannie/Freddie to loosen lending standards on condos

[DanTheEldest]

Originally Posted by Etta Place

Pretty much. Along with the politicians that work for them.

Not even going to bother. Obama ackbar.

[ForTehNguyen]

Originally Posted by Etta Place

Here's what the article actually says. Do you think the 70% rule has merit, or do you think Frank is right to ask that it be relaxed to allow people to buy condos?

hello is this 1999 (when Fannie/Freddie were asked to lower standards) over again, it was this relaxing in lending standards that got all these people that couldn't afford mortgages into the whole mess. Banks under their own free will will not loan out to these people that can't afford them.

[Etta Place]

Originally Posted by ForTehNguyen

hello is this 1999 (when Fannie/Freddie were asked to lower standards) over again, it was this relaxing in lending standards that got all these people that couldn't afford mortgages into the whole mess. Banks under their own free will will not loan out to these people that can't afford them.

But are these requirements arbitrary? I'm not saying I agree with Frank. I'm just saying that requiring a condo project to have 70% occupancy and less than a 15% delinquent rate on HOA dues might be something set up just recently, and could be overkill. I don't know.

[ForTehNguyen]

why make up numbers that feel good, let the damn market work Barney.

[machron1]

I have an idea that will compliment this plan, and I think it may get us out of this mess. I think we should sell these condos to anyone who has a pulse. Then, we can bundle the mortgaes up, and package them as securities. From these securities, we can buid a house of cards I mean derivitives (let's call them collateralized debt obligations) and sell them abroad as investments.

Anyone else thiink that's a good idea?

[Kristopherl]

Originally Posted by machron1

I have an idea that will compliment this plan, and I think it may get us out of this mess. I think we should sell these condos to anyone who has a pulse. Then, we can bundle the mortgaes up, and package them as securities. From these securities, we can buid a house of cards I mean derivitives (let's call them collateralized debt obligations) and sell them abroad as investments.

Anyone else thiink that's a good idea?

Excellent idea! Throw in some candy and it's a shoe in!

[Palmguy]

Originally Posted by Etta Place

But are these requirements arbitrary? I'm not saying I agree with Frank. I'm just saying that requiring a condo project to have 70% occupancy and less than a 15% delinquent rate on HOA dues might be something set up just recently, and could be overkill. I don't know.

I'm not a condo developer, and I doubt anyone here is familiar enough with the specific numbers to really answer this question well. From my perspective though, it seems as if there is an occupancy requirement as a measure of risk as to whether or not the development will fail and thus the creditor's investment will be at risk or lost. Kind of like a credit score for an individual mortgage. Seems like we've seen a situation like this before...

[mtcraigco]

Originally Posted by Etta Place

But are these requirements arbitrary? I'm not saying I agree with Frank. I'm just saying that requiring a condo project to have 70% occupancy and less than a 15% delinquent rate on HOA dues might be something set up just recently, and could be overkill. I don't know.

I don't care what the litmus test if if you want to invest YOUR money Etta, but if it's taxpayer money AGAIN, there dang well better not be a repeat of the last fiasco.

Were you asleep for the housing crash? Or do you think folks should just be able to buy a condo or develop one because they said they could pay for it??

Again, as others have said, this smells like yesterdays trash. We've been there done that, folks need to wise up.

[Kristopherl]

Not to mention that in my area Condos always go down in value.

[Etta Place]

Originally Posted by mtcraigco

I don't care what the litmus test if if you want to invest YOUR money Etta, but if it's taxpayer money AGAIN, there dang well better not be a repeat of the last fiasco.

Were you asleep for the housing crash? Or do you think folks should just be able to buy a condo or develop one because they said they could pay for it??

Again, as others have said, this smells like yesterdays trash. We've been there done that, folks need to wise up.

You're right. I tend to agree with you. I just wanted the original poster to comment more on what he thought about what Frank was proposing and why that was a bad idea. Maybe he just thought it was obvious.

I don't think our leaders have learned their lesson from this financial meltdown - either side of the aisle.