Exhibit A: The deeply flawed mortgage giants Fannie Mae and Freddie Mac that have yet to be overhauled despite endless calls for an overhaul.
As Deal Journal pointed out post earlier today, Washington is seemingly paralyzed by a fear that ending the government guarantee of Fannie and Freddie would bring the housing recovery to a screeching halt.
Well, Exhibit B has to be an amendment to a bill winding its way through Congress. The bill is called the “Small Business Lending Fund Act of 2010,” and it would extend $30 billion to small banks to facilitate small-business lending. But the last minute amendment, which was sponsored by Democratic Reps. Brad Miller (N.C.), Joe Baca (Calif.) and Majority Leader Steny Hoyer (Md.), would allow builders to tap into the $30 billion to build more houses.
For more than two years, banks have practically shut off all financing to small and mid-size home builders as they pare back their exposure to construction and development loans. The National Association of Home Builders lobbied hard for the amendment to be included in the bill. “The Miller/Baca amendment will expand the flow of credit to residential builders and help promote the sustained growth and vitality of the nation,” the NAHB said in a letter sent to all House members.
The amendment passed 418 to 3.
Greece here we come.
With a glut on the market and more foreclosed real estate coming, are more new homes what we need?
No, but in a “Spend to get out of debt universe” I guess it makes sense to someone who needs the votes.
We have elected total idiots and they are doing what they think we elected them to do. Most of what they do would land them in jail if they were you or me.