2/28/2008 – Foreclosure Prevention Act - “Bush says no bailout for lenders, speculators”

[SnoopDog]

2/28/2008 – Foreclosure Prevention Act - “Bush says no bailout for lenders, speculators”


Of course everyone knew about this mortgage/banking crisis as early as February this year. The Foreclosure Prevention Act of 2008 had provisions to “…would permit bankruptcy courts to restructure the debt on home mortgages by setting interest rates and principal at commercially reasonable market rates and extending repayment periods”.

Additionally, the bill had “(The administration also objects to a) provision in the bill that would provide $4 billion to let state and local government buy and rehabilitate foreclosed homes, and improve disclosure of subprime mortgage loans in hopes that borrowers won't be surprised by big payment increases.”

This Senate version of HR.3221 fail Senate Cloture 48-46 with every Democrat voting for cloture and every Republican save 1 voting against cloture.

This bill eventually passed without the ability for the courts to restructure loans.

I see this as the Bush Administration knew exactly what was going on, and true to President Hoover’s policies, failed to fix the problem at the source by helping the American public.

And true to the proven methodology of instilling fear and waiting for the last minute, Bush is once again snooking Congress to bail out the fat cat investment firms.

And we have been here before – Hoover also said we had a ‘credit crisis’ and also bailed out the investors. And it did not work. We had to wait for FDR who helped the middle class and restart the economy. That was the only way it was fixed.

The Bush Administration not only learned from history, they used it as a playbook. The $700 billion is simply being stolen from us.
………………….

Housing bill will 'bail out lenders' – Bush

President reiterates his objection to a proposed change to help homeowners in bankruptcy and the creation of a $4 billion fund to let agencies buy foreclosed homes.

By Jeanne Sahadi, CNNMoney.com senior writer
February 28 2008: 1:57 PM EST

NEW YORK (CNNMoney.com) -- President Bush said Thursday that he opposed the foreclosure prevention legislation that Senate Democrats have introduced.
"The Senate is considering legislation that would do more to bail out lenders and speculators than to help homeowners keep their homes," he said. "The Senate bill would actually prolong the time it takes for the housing market to adjust and recover, and it would lead to higher interest rates."
Earlier this week, the Bush administration said the president would veto the Foreclosure Prevention Act of 2008 if it passes Congress because it objected to two key elements. The first is a provision that would change the bankruptcy law to let judges reduce the amount of principal and interest due on mortgages of those filing for bankruptcy.

<more>

http://money.cnn.com/2008/02/28/news/economy/bush_press_conference/?postversion=2008022813

[Eric J in MN]

1. Did the bill have a limit on how much the judge could reduce the principal...

...when Democrats introduced the bill?

[SnoopDog]

2. I do not have the info...

My research only has the final text of the bill (or I simply cannot find it).

Senate vote: http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=110&session=2&vote=00035

Here is more info:

2/28/2008
Paulson Says No Go on Housing Bailouts

Treasury Secretary Hank Paulson has thrown a bucket of cold water on a number of proposals being floated in Washington to rescue troubled borrowers via the explicit use of public funds, such as the idea of reviving the 1933 Home Owner's Loan Corporation to buy underwater mortgages and renegotiate them.

In some respects, Paulson's tough stance is welcome, because many of these proposals would do more for banks and investors than borrowers. Many homeowners, including ones who are capable of servicing their mortages, are walking away because they deem them an unattractive investment. There is now a large class of nominal homeowners who in fact are more akin to renters with a home ownership option that is now deeply out of the money. And they can often rent more cheaply too.

But unfortunately, what is driving Paulson isn't a pragmatic assessment of what measures might be cost effective and not involve undue moral hazard. Instead, he is guided primarily by the ideological imperatives of this Adminsitration, which is to favor so-called private sector solutions. But that construct is dishonest and limiting. For instance, the Journal reports that Paulson maintains that "market-based approach will be enough to keep the situation under control."

If Paulson considers the worst housing market since the Depression to be under control, I shudder to think what an unmanaged situation would look like.

<more>
http://www.nakedcapitalism.com/2008/02/paulson-says-no-go-on-housing-bailouts.html

[Waiting For Everyman]

3. This is deliberate. They know exactly what they're doing.

And homeowners have no way to stop them. They seal off any way to fix it. One person cannot fight a mega-bank.

[Hydra]

4. With the entire weight of the gov't behind it

Bush has been squashing attempts to stop this mess every step of the way, while making TRILLIONS off the chaos.

And still some people want to give them more...are we REALLY this stupid?