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Too Many Cooks...

Congress has reasonably set up new rules to rein in the lending practices of failed mortgage insurers, Fannie Mae and Freddie Mac. Now, a couple legislators want to bend those rules, because they make it too hard for some of their constitutents to sell condos, or other apartment style homes that they own.

Fannie and Freddie were originally set up to lend to single family homes. Maybe duplexes or fourplexes at the most. But apartment homes are a rather different story altogether. Once you get into whole buildings, even if individual units are indivdually owned, you're talking about a whole new level of risk.

It is true that condos are safer than coops. In the former, a bank can foreclose only on the "common areas" of the building but not the individual units. In the latter, a lender can foreclose on the whole building, including individual units, thereby taking priority over the lenders of individual units.

Stay the course, legislators. Stick to your guns even if it hurts some of your constituents. Rules have to be rules. Otherwise, they won't be.

Changing the rules midstream destroys respect for all rules. Too many cooks spoil the soup.