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.
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.”
Written by Elizabeth Ecker