Newt Gingrich - Housing Crisis
Michigan Economic Debate
In November of 2011, Congressman Gingrich participated in the Michigan economic debate. He discussed his views on the housing industry. He was also asked about his lobbying work for Fannie Mae and Freddie Mac.
Speaker Gingrich, is Governor Romney right?
GINGRICH: We, he's certainly right in the sense that you want to get through to the real value of the houses as fast as you can, because they're not going to rise in value as long as you stay trapped, as Japan has done now for 20 years. But I think there are two specific steps you have got to understand in terms of housing.
To pick up on something Congresswoman Bachmann said, if the Republican House next week would repeal Dodd/Frank, and allow us to put pressure on the Senate to repeal Dodd/Frank, you would see the housing market start to improve overnight. Dodd/Frank kills small banks, it kills small business. The federal regulators are anti- housing loan, and it has maximized the pain level.
You could also change some of the rules so it would be easier to do a short sale where the house is worth less than mortgage than it is to do a foreclosure. Today, the banks are actually profiting more by foreclosing than encouraging short sales.
But in the long run, you want the housing market to come back? The economy has to come back.
When you are at four percent unemployment, you suddenly have a dramatic increase in demand for housing. When you're at nine percent- plus unemployment, it's hard to get the housing market to come back....
HARWOOD: Since -- since you mentioned Fannie and Freddie, Speaker Gingrich, 30 seconds to you, your firm was paid $300,000 by Freddie Mac in 2006. What did you do for that money?
GINGRICH: Were you asking me?
HARWOOD: Yes.
GINGRICH: I offer them advice on precisely what they didn't do.
(LAUGHTER)
Look -- look, this is not -- this is not...
HARWOOD: Were you not trying to help Freddie Mac fend off the effort by the Bush administration...
(CROSSTALK)
GINGRICH: No. No, I do -- I have never...
HARWOOD: ... and the -- to curb Freddie Mac.
GINGRICH: I have -- I assume I get a second question. I have never done any lobbying. Every contract was written during the period when I was out of the office, specifically said I would do no lobbying, and I offered advice.
And my advice as a historian, when they walked in and said to me, "We are now making loans to people who have no credit history and have no record of paying back anything, but that's what the government wants us to do," as I said to them at the time, this is a bubble. This is insane. This is impossible.
GINGRICH: It turned out, unfortunately, I was right and the people who were doing exactly what Congresswoman Bachmann talked about were wrong. And I think it's a good case for breaking up Fannie Mae and Freddie Mac and getting much smaller institutions back into the private sector to be competitive and to be responsible for their behavior.
Sponsored and Cosponsored Legislation
This representative has not been identified as sponsoring or cosponsoring significant legislation related to this title.