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Bachmann used loan program weeks before pushing to eliminate it

Weeks before U.S. Rep. Michele Bachmann (R-Minn.) pushed for the elimination of government-backed loan programs, she and her husband, Marcus, signed documents to finance a $417,000 home loan, which experts told The Washington Post was backed by the very programs Bachmann had aimed to destroy.

Bachmann, along with several other members of Congress, blamed Fannie Mae and Freddie Mac for the 2008 financial meltdown. Due to their government-backing, the programs can offer lower interest rates, but those opposed have argued that the programs come at too high a cost to taxpayers.

From reporter Kimberly Kindy of The Washington Post:

… Bachmann has been the most outspoken critic of the loan programs and other government subsidies among Republican presidential candidates. Former Minnesota governor Tim Pawlenty also has called for dismantling Fannie Mae and Freddie Mac. Experts who reviewed his mortgage documents said that there was no way to tell whether his home loan from 1994 had government backing.

Bachmann’s mortgage was part of a package of debt that she and her husband, Marcus, assumed to buy their home, public records show. They also have other loans, including a home equity line of credit, a business mortgage and another business loan for their Christian counseling clinics, bringing their liabilities to more than $1 million, according to the most recently available public records. …

The situation is politically significant not only because Bachmann took advantage of a program she opposed, but because she has remained a staunch critic of government debt, often reminding Iowans at her whistle stops that the government should function like families do and not spend more that it has.

In addition to the home loans, the Bachmanns have also come under scrutiny for government subsidies they’ve collected in connection to a family farm and their counseling clinics, Bachmann and Associates.

According to experts who worked with The Post, “the Bachmanns bought a more expensive home using typical strategies during a time of easier credit.” The Post also reports that their new home, located on a golf course, was previously owned by former NFL player Ross Verba, who was facing foreclosure.

In August 2008, when the Bachmanns purchased the home, the situation of foreclosure was not a unique one for residents of her District. According to earlier reporting by our sister site, The Minnesota Independent, Bachmann’s 6th Congressional District had the highest foreclosure rates in the state.

… Just to the north of the Twin Cities, the 6th district, represented by Republican Rep. Michele Bachmann, had the most foreclosures of any of Minnesota’s eight congressional districts, with an estimated 5,227 in 2008. Her district also had the highest rate of foreclosures as a percentage of households, at 1.80 percent, nearly that of the city of Minneapolis at 1.85 percent.

The situation was similar in 2007, when, according to a Housing Link study, Bachmann’s district had a higher foreclosure rate than the rest of Minnesota and the rest of the country.

But Bachmann’s record in Congress is not one of a representative whose district faces such a crisis. Bachmann hasn’t authored or sponsored any legislation to assist homeowners facing foreclosure, but she has co-sponsored 14 bills to restrict abortions and five to promote Christianity in government.

Bachmann voted against five key foreclosure relief bills, including the Mortgage Reform and Anti-Predatory Lending Act, which would set standards for mortgages and reduce predatory lending, and the Neighborhood Stabilization Act, which would provide funds for buying and rehabilitating foreclosed properties in affected neighborhoods. She also opposed the Expanding American Homeownership Act, which allows more people to qualify for FHA-backed mortgages, and the Expand and Preserve Home Ownership Through Counseling Act, which aims to improve financial literacy. Bachmann additionally voted against the Housing and Economic Recovery Act of 2008, a law signed by President Bush that contained many provisions to assist struggling homeowners and also the only one of the bills to become law.

Before the first four of these measures reached the House floor, Bachmann opposed them in the House Financial Services Committee. She also voted against the FHA Housing Stabilization and Homeownership Rentention Act of 2008, which did not receive a floor vote. The bill would have provided mortgage refinancing assistance to struggling families and expanded FHA loan programs.

Bachmann further offered an amendment to block increased funding for HOPE for Homeowners, a Department of Housing and Urban Development program that helps families facing foreclosure to refinance their mortgages.

When Congress was debating strategies to assist families facing foreclosure, Bachmann called those homeowners “irresponsible.”

“Now, we can debate whether this is the right thing to do as it may seem that you’re rewarding the irresponsible while punishing those who have been playing by the rules,” she said in Febraury. “When President Obama released his plan … to prevent home foreclosures, the point he wanted to get across to everyone watching was that money from folks who have been making their payments on time will not just be handed over to those folks who got in over their heads and bought a house they knew they couldn’t afford.”

Those homes that residents of the 6th district couldn’t afford had a median value of $239,000, according to the 2007 American Community Survey, just above the national median of $229,000. Prices have likely declined considerably since the 2007 survey. …

The Bachmanns borrowed the full amount possible at the time from Fannie Mae and Freddie Mac, according to The Post. The home was originally listed in 2007 with a price tag of $1.75 million.

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