Rep. Barney Frank Explains the Building of the Mortgage Bailout Bill
Thursday, June 19, 2008PAUL KANGAS: Chairman of the House committee, Barney Frank is a key player in the debate that began in Congress today. It involves a massive mortgage aid bill which is already being threatened with a presidential veto. The administration is concerned about a provision that gives money to help state and local governments buy foreclosed properties. Stephanie Dhue sat down with Frank today and began by asking him if the bill will become law.
REP. BARNEY FRANK, CHAIRMAN, HOUSE FINANCIAL SERVICES COMMITTEE: I think so. There is a great deal of need for it. There is a lot of support for it including from within the administration. The piece that the veto message focused on is something I think is very important. But it could be done separately. Obviously we don`t have the votes to override the veto. But we in the House, in fact, voted even more money. This is money that would go to communities to buy up property that has been foreclosed. And it`s now a buy (ph) and it could be used for good purposes. But it`s not essential to this same bill. We won`t stop trying to get the money for the city. It is very important to the mayors and to the governors who will try hard to get it. But it may be that there is another legislative place in which you can do it, maybe in an appropriations bill. It, after all, not so much policy change as money.
STEPHANIE DHUE, NIGHTLY BUSINESS REPORT CORRESPONDENT: Is there anything that`s nonnegotiable? I know you wanted conforming loan limits to be --
FRANK: Oh yes, there are some things that are nonnegotiable.
DHUE: And those would be.
FRANK: I`m not going to non-negotiate with you, I hope you don`t take offense. But I admire what Chris Dodd did. It was tough thing to get that bill through the Senate. I appreciate the cooperation that Senator Shelby gave him. I hope it is going to go through. And they had some hope that we could just accept it as is; that was not realistic. It`s too complex a piece of legislation. (INAUDIBLE) just need more time to make sure you wrote it all correctly. But I think and I accept the veto threat on the CEBD as probably definitive at this point. I think the rest of it were all in areas where we can work something out.
DHUE: Countrywide allegedly gave favorable loans to at least two senators, Chris Dodd and Kent Conrad. That has cased some Republican senators to call for the bill to be pulled so they can determine how much Countrywide and other lenders will benefit. How much has this controversy slowed momentum on the bill?
FRANK: Not at all. In the first place Countrywide is not going to benefit at all because the good news is pretty soon there won`t be any more Countrywide. How I wish there never was. That is an organization that did a lot of harm. But the Bank of America which is a much more responsible financial institution agreed some time ago to buy Countrywide. So the question about whether or not they are going to do this in the future, no, they can`t. As to whether anybody else did it, I don`t know. There is no -- I don`t know how would you find that out, subpoena everybody who ever got a mortgage. Finally, I would say this, those Republican senators who said hold off the bill until we find out, were never for the bill anyway.
DHUE: If you call a CEO, say you call the CEO of Countrywide, what would you expect in return?
FRANK: Actually, I did call the Countrywide CEO. I called him greedy and urged him to give back some of the money. I wouldn`t call a CEO about a personal item. Well, I take that back, not a CEO. I started a credit card with the bank. I was on a plane. I was kind of bored. I must have run out of things to read. So they had this credit card deal so I signed up. And I said this is more trouble than it is worth so I wrote to the credit card company, I stopped this. I don`t want to have it anymore. So they keep sending me the bill. I write back and say what is the matter with you? Stop sending me this bill. So I talked to an executive of the company and said, will you please stop sending me a bill is so I would expect him to stop sending me a bill. But I would never talk to the official of a company about trying to get, the CEO of a company about an individual transaction.
DHUE: Analysts say the housing bill will do little to stop the slide in house prices. Does Congress need to do more?
FRANK: Which analyst? Some people say Elvis is alive. So when people tell me somebody said -- no, some analysts say this, some say that. The Congressional Budget Office which is a fairly neutral organization, said that the bill as it passed the House will prevent 500,000 foreclosures that would otherwise have happened at a cost of about $3800 per foreclosure. That will still leave many that will happen. But I think averting 500,000 more foreclosures is a good thing. Whether we need to do more I think you have to see how this one works. It is not clear how much more you can do. Nobody is going to support, I think, in any substantial numbers putting taxpayer dollars in there to pay off peoples` mortgages or to pay off the lenders. Within the constraints of that, I don`t know how much further you could go.
DHUE: We`ve been speaking with Barney Frank, the chairman of the House Financial Services Committee. Thank you for joining us.
FRANK: Thank you.
