If the Bush administration is willing to bail out Bear Stearns, then why won’t they help homeowners who are the victims of predatory lenders? According to the president of the non-partisan Center for Responsible Lending, Michael Calhoun, the Bush administration is not doing enough to help homeowners.
“More than 2 million families who’ve been sold unfair, deceptive home loans will face foreclosure in the next 24 to 36 months. An additional 40 million families who live in surrounding neighborhoods will see their property values plummet by $350 billion as a result. Communities will see tax bases erode further. For the common good, federal officials need to act fast to find solutions for working families and neighborhoods: Averting foreclosures on Main Street would not only help families and neighborhoods, but would also benefit Wall Street by avoiding further losses to lenders and investors,” Calhoun said in a statement today.
He said that the U.S. Treasury’s plan for lenders to voluntarily modify home loans is failing to keep pace with the amount of new foreclosures. “To stop the wave of foreclosures, the Bush administration needs to support and Congress must pass a targeted change in law to permit bankruptcy judges to make limited adjustments to mortgages. Judges now can make changes on mortgages for vacation homes and commercial properties — current law puts only home loans on primary residences out of reach. Bills now under consideration the U.S. House and Senate allowing court-supervised loan modifications in cases where foreclosure is the only other option could keep 600,000 families in their homes. And it would not cost taxpayers a dime. But that won’t be enough; this massive problem requires more than one approach. We also need to implement proposals to expand FHA loan programs to help defaulting borrowers refinance, and quickly.”
If nothing is done, Calhoun warned of dire economic consequences for years to come. “If massive foreclosures continue, states and communities and individuals all over the nation will suffer economic damage for years to come. Congress and the White House must support legislation to allow families relief through the courts and work to find additional ways to bring much needed help to struggling homeowners.”
The answer to the question of why the Bush administration has done so little for homeowners is because they value Wall St. more than Main St. I don’t understand why they believe that it is fine to penalize victims of predatory lending? If their standard for non-intervention is the concept of an unfettered market place, then why didn’t this stance against government intervention apply to Bear Stearns? If Bear Stearns goes under, isn’t that capitalism in action?
This administration is under the delusion that it corporate America, not average citizens who make the economy go. I am not saying that it was wrong to bail out Bear Stearns, but that the administration needs to be consistent in their position. They should offer aid to all or none. Saying that one deserves help while the other doesn’t, or in this case opposing measures that would be cost free to the tax payer, but help many strictly for ideological reasons is indefensible, Wall St. will survive this bad economy, but many Main Streets won’t. Look on the bright side, all those people who are losing their homes will be able to use their stimulus checks to fill up their gas tank, or pay some of their rent.