Boortz: "[I]f there is a scoundrel in this housing crisis, it would be Barney Frank ... whose lover was working with Fannie Mae, pushing out these subprime mortgages"

››› ››› JEREMY HOLDEN & LAURYN BRUCK

On his radio show, Neal Boortz baselessly suggested that Rep. Barney Frank "was protecting Fannie Mae for about seven or eight years in the 1990s because his lover, his boyfriend was working for Fannie Mae, pushing out these subprime mortgage packages." Boortz provided no evidence to support his suggestion that Frank allowed his personal relationship to affect his work in Congress. In fact, Frank repeatedly took actions over the years to strengthen oversight of Fannie Mae and Freddie Mac.

On the October 8 broadcast of his nationally syndicated radio show, host Neal Boortz baselessly suggested that Rep. Barney Frank (D-MA), whom he referred to as a "scoundrel," allowed his relationship in the 1990s with Herb Moses, a Fannie Mae official at the time, to improperly influence his conduct as a member of the House Financial Services Committee, which was responsible for oversight of Fannie Mae. Boortz claimed that Frank "was protecting Fannie Mae for about seven or eight years in the 1990s because his lover, his boyfriend was working for Fannie Mae, pushing out these subprime mortgage packages. So, Barney Frank -- Barney Frank's in the Congress of the United States protecting Fannie Mae. His boyfriend is at Fannie Mae pushing out these subprime mortgages. They get home at night, and in between boxing tonsils and swapping spit, the boyfriend said, 'Thank you, Barney, for saving my job.' " Boortz later said, "[I]f there is a scoundrel in this housing crisis, it would be Barney Frank, whose boyfriend, whose lover was working with Fannie Mae, pushing out these subprime mortgages while Barney Frank was defending Fannie Mae in the Congress of the United States." Boortz provided no evidence to support his suggestion that Frank allowed his personal ties to Moses to affect his behavior on the Financial Services Committee. In fact, Frank repeatedly took action over the years, including when Moses was at Fannie Mae, to strengthen oversight over the corporation.

Boortz's attack echoed a reported strategy on the part of Republicans to try to deflect blame for the financial crisis onto Fannie Mae and Freddie Mac, the Community Reinvestment Act, and proponents of the expansion of affordable housing. Newsweek senior editor Daniel Gross wrote in an October 7 Slate commentary:

On the Republican side of Congress, in the right-wing financial media (which is to say the financial media), and in certain parts of the op-ed-o-sphere, there's a consensus emerging that the whole mess should be laid at the feet of Fannie Mae and Freddie Mac, the failed mortgage giants, and the Community Reinvestment Act, a law passed during the Carter administration. The CRA, which was amended in the 1990s and this decade, requires banks -- which had a long, distinguished history of not making loans to minorities -- to make more efforts to do so.

Media Matters for America has rebutted attacks on the CRA, noting that a large percentage of subprime mortgages were not made under the CRA, and noting comments made by Janet Yellen, president and CEO of the Federal Reserve Bank of San Francisco, in a March speech in which she said that "studies have shown that the CRA has increased the volume of responsible lending to low- and moderate-income households" [emphasis added]. Media Matters has also noted evidence showing that Fannie Mae was not a leader, but a follower, in the subprime lending market.

But most important, undermining Boortz's baseless charge are actions Frank has taken over the years to strengthen oversight of Fannie and Freddie. In the early 1990s, when Democrats held the majority in Congress before the Republican takeover in 1995, Frank supported bills to increase regulation of Fannie Mae and create a government regulatory agency that would supervise and have authority over some aspects of the company in 1991 and 1992. Moses was employed by Fannie Mae at that time. Moreover, in 2005, when Frank was the ranking Democrat on the House Financial Services Committee, he worked with committee chairman Rep. Michael Oxley (R-OH) on the Federal Housing Finance Reform Act of 2005, which would have established the Federal Housing Finance Agency (FHFA) to oversee the activities of Fannie Mae and Freddie Mac. After voting for the bill in committee, Frank voted against final passage of the bill on the House floor, stating that he was doing so because an amendment to the bill on the House floor imposed restrictions on the kinds of nonprofit organizations that could receive funding under the bill. In early 2007, as chairman of the House Financial Services Committee, Frank sponsored H.R. 1427, a bill to create the FHFA, granting that agency "general supervisory and regulatory authority over" Fannie Mae and Freddie Mac and directing it to reform the two companies' business practices and regulate their exposure to credit and market risk. The FHFA was eventually created after Congress incorporated provisions that House Speaker Nancy Pelosi (D-CA) said were "similar" to those of H.R. 1427 into the Housing and Economic Recovery Act of 2008, which the president signed into law on July 30.

From the October 8 edition of Cox Radio Syndication's The Neal Boortz Show:

BOORTZ: You know, now, who is one of the biggest culprits in our financial crisis today? It's Barney Frank. Barney Frank, who for 18 years or more has been working overtime to protect Fannie Mae. He was protecting Fannie Mae for about seven or eight years in the 1990s because his lover, his boyfriend was working for Fannie Mae, pushing out these subprime mortgage packages.

So, Barney Frank -- Barney Frank's in the Congress of the United States protecting Fannie Mae. His boyfriend is at Fannie Mae pushing out these subprime mortgages. They get home at night, and in between boxing tonsils and swapping spit, the boyfriend said, "Thank you, Barney, for saving my job." "No problem."

[...]

BOORTZ: Representative Barney Frank, who has been at the middle of the problems out there -- been at the middle with the problems with the subprime mortgages and making all of these loans to people who could not afford them -- now says that Republican criticism of Democrats over the housing crisis is racially motivated.

The last refuge of scoundrels. And if there is a scoundrel in this housing crisis, it would be Barney Frank, whose boyfriend, whose lover was working with Fannie Mae, pushing out these subprime mortgages while Barney Frank was defending Fannie Mae in the Congress of the United States. Barney Frank feels really vulnerable right now because he knows the American people are starting to understand his complicity. They're starting to understand. So he goes to that last refuge. "Yup, the Republicans are guilty of racism for attacking me and my Democrat friends on the nation's housing crisis because a lot of these subprime mortgages were made to black people." Isn't that nice?

Posted In
Economy, Housing
Network/Outlet
Cox Radio Syndication
Person
Neal Boortz
Show/Publication
The Neal Boortz Show
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