Barney Frank: “Mr. Chairman, there were several aspects of the debate over housing during the period that led up to the crisis. Part of…”

“Mr. Chairman, there were several aspects of the debate over housing during the period that led up to the crisis. Part of it was over Fannie Mae and Freddie Mac, but an even bigger part--because it involved Fannie Mae and Freddie Mac--was over sub-prime loans being made largely, although not entirely, on the unregulated banking system, and there were those who defended that. There were those who opposed efforts to rein it in. In fact, with regard to Fannie Mae and Freddie Mac, I changed my own position with regard to them when in 2004 the administration, without congressional input, ordered Fannie Mae and Freddie Mac to buy more loans from people below the median income. We tried, many of us, during the period of 2004, 2005, and 2006 to get legislation adopted to ban sub-prime loans being granted imprudently. We had, the Congress, given the Federal Reserve the authority to do that in 1994, but Mr. Greenspan refused to do that. He since has apologized for that error.”