Rep. Barney Frank's Role With Fannie Mae

Congressman Barney Frank, D-MA, for the past several years argued and fought to block further scrutiny of Fannie Mae and Freddie Mac. A champion of providing the opportunity for low income people to join the American Dream of home ownership, he chastised regulators for implying that these institutions were in need of oversight. He was not alone. At the time the Democrats were in the minority, but enjoyed the knowledge that the Republicans did not have the numbers to go alone in attempts to correct the problem.
Many readers have already watched the video of the House Financial Services Committee’s Democratic members berating the regulator who dared question the troubles at these two institutions. This video , shows just how forceful House Democrats were in their derision of the regulator. Barney Frank was the then-minority ranking member.
What would motivate Congressman Franks attempts to challenge the regulator. To understand this, we need some background.
Nearly 20 years ago, now openly gay Barney Frank was blown out of the closet when it was reported in the press that his live-in lover Steve Gobie was operating an male escort service from their Washington, DC home. After this scandal the relationship ended.
Enter Herb Moses, “Moses was the assistant director for product initiatives at Fannie Mae and had been at the forefront of relaxing lending restrictions at the company for rural customers”, according to the Feb. 23, 1998, issue of National Mortgage News (NMN).
Moses became Barneys new live-in lover. Frank was serving on the House Banking Committee the entire 10 years they were together. The committee is the primary House body which along with the Office of Federal Housing Enterprise Oversight (OFHEO) has jurisdiction over the government-sponsored enterprises. While Moses served at Fannie Mae and was Frank’s partner, Frank was actively working to support GSEs, according to several news outlets. According to an article by Kathleen Day in the Oct. 8, 2003, Washington Post, Frank opposed giving the Bush administration the right to approve or disapprove business activities that “could pose risk to the taxpayers.” He told the Post he worried the Treasury Department “would sacrifice activities that are good for consumers in the name of lowering the companies’ market risks”.
As an executive, Herb Moses made nice bonuses from the kabuki mortgage products. That is why Barney Frank blocked attempts at closer scrutiny. His own personal nest was being feathered.