Congressman wants Fannie Mae & Freddie Mac to loosen loan restrictions

Rep. Barney Frank, chairman of the financial services committee, wants Fannie Mae and Freddie Mac to loosen their restrictions on loans for condo units that don’t make it through their automated system. For loans that are not underwritten through that system, the mortgage giants no longer guarantee loans on condos in buildings that are less than 70 percent sold. They also won’t guarantee loans in buildings where 15 percent or more of owners are delinquent on condo fees. However, Jack McCabe, CEO of McCabe Research and Consulting, told CNBC that the restrictions will only affect a very small amount of loans, as 99 percent of loans make it through the automated system. Instead of restrictions, he said, the government should focus on stalling foreclosures and curbing unemployment rates. Fred Glick, CEO of US Loans Mortgage, agreed with McCabe.