Barney Frank Slams Regulators, Lenders on Softening New Mortgage Rules

Former U.S. Representative Barney Frank is speaking against the “watering down” of mortgage rules from his position post-Congress, according to a Wall Street Journal report

In a letter submitted to regulators this week and obtained by the WSJ, Frank says that a scaling back of the mortgage rules set under the Dodd-Frank Act, bearing his name, would be a grave mistake. 

“This is a grave error, and contrary to the assertion that it would best carry out the statutory intent, significantly repudiates it,” Rep. Frank wrote, according to the WSJ report. 

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The letter responds to a proposal from six government agencies that include changes to risk retention requirements for mortgage securities issues and qualified mortgages as defined under Dodd-Frank. 

The proposal, jointly released by six government agencies including the Federal Housing Finance Agency and the Department of Housing and Urban Development, aligns standards for the qualified residential mortgage (QRM) and qualified mortgage (QM) rules.

Criticizing the organization of mortgage lenders and bankers that have worked toward reforming the qualified mortgage rules, Frank noted blame on those entities for the housing crisis. 

“If all of these people were correct in their collective judgment, we would not have had the crisis that we had,” Frank wrote. “More importantly, what their arguments reflect, and what I believe unfortunately is carried over in proposal, is the view that things must always be exactly as they are today.”

Read the WSJ article.

Written by Elizabeth Ecker

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  • I propose a new statute for those creating legislation for the mortgage industry and for those regulating it as follows: Anyone who would sponsor new legislation or regulate the industry must first be licensed as a mortgage loan originator and work for a minimum of one year dealing with distraught borrowers unable to acquire financing because of the regulations already passed. Here are Barney Frank’s qualifications for being the driving force in mortgage legislation and regulation:

    Graduate of Harvard College 1958-1962
    Studied for PhD in Government through 1962-1968
    Chief Assistant Boston Mayor 1968-1971
    Admin Assistant MA Congressman 1971-1972
    MA House Representative 1972-1980
    US House Representative 1980-2013
    I may have missed it but where in his bio does it reference working for a mortgage lender, bank or credit union? If you missed it too then something is very wrong. What bunch of complete imbeciles would permit this guy to be the foremost expert on mortgage legislation and regulation?

  • His diatribe sounds like sour grapes and projecting one’s own lack of and failure in judgement on others. The former Representative needs to decide what he REALLY wants to do when he finally grows up.

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