Barney Frank threatens banks to stop foreclosing

2009 July 31 post from voodoo

Ah, Barney Frank... when not busy being accomplice to male-prostitution in his own house, his little idle hands just have to try to fix something, typically clearly NOT broken. Frank is now telling banks (ie...private sector) that if they don't move quickly to 'volunteer' to save more homeowners (again, private sector) from foreclosure that Congress will force them.

 

So let's review the timeline here; Congress used the Fed to lower interest rates and Fannie/Freddie to federally back loans (ie... our wallets), resulting in 'moral hazard' and the destruction of a reasonable risk model, which led to lowered lending standards, which led to lots of credit expansion, which led to astronomical rises in housing prices, which led to a housing/credit bubble, which led to crash.  Now that the credit-induced delirium has died off (the Fed of course is back at it with artificially low interest rates), and the credit markets are only now correcting themselves to a reasonable model; ie... people that can actually afford to own a house staying in them, our government has once again continued use of the bubble machine of regulation to ensure that broke people stay in houses they can't afford and should not have bought.  Sounds like a brilliant fix to me!

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