You may have seen this comment on an Oct 14 entry to this blog:
Listened to Glenn Beck tonight on cable –had a senator (sorry don’t remember his name) said that Barney Frank and his group got a bill passed this last year –a $460 fee is attached to the closing costs of financing or re-financing a home –it will be donated to ACORN—this fee is now law !!!!!!!!!!!!!!! This is nation-wide! Extortion???? Any comment???
The senator the poster mentioned was actually Rep. John Culberson of Texas. And his media rep said he misspoke – instead of $420 per $100,000 of new mortgage business, he meant to say $42. There’s a big difference between $420 and $42.
To see his exact words go to Glenn Beck’s Web site and the TV tab and click on the CNN transcripts area and choose Oct. 14.
Or read here – “But the fact of the matter is that in the Fannie and Freddie Mae bill that Barney Frank put together this summer, when we nationalized the mortgage banking industry, that legislation, Glenn, contained language that gave these community activist organizations like ACORN –out of every $100,000 mortgage from this day forward, each one of us will pay a fee of $420 forever that will go directly to these community activist organizations. It’s going to be a line item on your closing statement.”
Culberson’s media rep sent me an email with the calculation:
Section 1338 of H.R. 3221, the Housing and Economic Recovery Act, requires both Fannie Mae and Freddie Mac to contribute 4.2 basis points for each dollar of the unpaid principal balances of their new business purchases to the affordable housing funds each year. A basis point is .01 percent (.0001 x 4.2 = .00042 x 100,000 = 42). So, $42 out of every $100,000 of new mortgages goes to the Housing Trust Funds. The bill would require the GSEs to contribute the basis point of the value of their mortgage portfolios to TWO new affordable housing funds to transfer money to the States then to the low-income-housing activities of nonprofits like ACORN and La Raza nationwide. This provision siphons money away from the GSEs and further puts them in financial straits. The largest organizations (and thus the most able to commit resources to apply for federal grants) who work on affordable housing issues include, for example, ACORN, National Council of La Raza and Housing Works. There is no language prohibiting funds from the Housing Trust Fund from going to entities, like ACORN, whose employees or volunteers have been indicted or pleaded guilty for vote fraud. Such language appears in the bill for the Community Development Block Grant funds.
But I was unable to reconcile the math when I read this section of the bill – so I called Rep. Barney Frank’s office and asked for comment in response to Rep. Culberson’s remarks.
Steven Adamske, a spokesman for the House Financial Services Committee who I reached through Rep. Frank’s office, said: “I’ve never heard anything where you could constitute a dollar amount for a specific organization. You can’t – in any way.”
Adamske spoke to me about the purpose of the Housing Trust Fund. He said 65 percent of the money goes to states and 35 percent goes to “qualified applicants directly for purposes of building houses.” I asked Adamske who is a qualified applicant and he said the Treasury Department has yet to determine the criteria.
For Culberson to say that money from every Fannie Mae and Freddie Mac mortgage goes to ACORN and similar organization is “a real stretch,” said Adamske. “It’s very surprising to me that you can cite that kind of cite with any degree of credibility.”
Thanks to the blog poster for bringing these remarks to our attention.
Oct. 16, 2008