Government Response to the Mortgage Crisis

The U. S. Senate today voted to cut off debate on its bailout bill.

It would spend hundreds of millions of taxpayer dollars for re-financing mortgages that are underwater now, that is,  more is owed on the house than it is worth.  This part of the program would be run by Fannie Mae and Freddie Mac.

And, four billion dollars, to states, to purchase homes on which the foreclosure process has already been completed.

Hey, is this the same Fannie Mae and Freddie Mac that helped provide the bucks that created the sub-prime mortgage crisis to begin with.

And the bill is supported by, surprise, surprise! the sub prime six.

Of course, our representatives do not feel any need to disclose other favors they have received from the mortgage industry, like this deal for a California Congresswoman, WAMU buying her foreclosed house.

As our group of consumer attorneys has been advocating for months, the crisis is better addressed by less government involvement, and zero expenditures of taxpayer money.

Chapter 13 bankruptcy reform would allow bankruptcy courts to re-write mortgages down to the value of the home securing the mortgage.

This is part of the Senate bill, only that proposal requires the Federal bureaucracy to become involved in guaranteeing lenders they will get paid.

Bankruptcy reform would also allow the courts to change ARMs to fixed rate mortgages, and change the interest rates.

Let your Senators and representatives know how you feel about them re-writing laws to help the mortgage industry from whom they received sweetheart deals.

Related posts:

1. Sheila Bair Criticizes Government Over Foreclosures
2. The Next Mortgage Crisis
3. Will The “Blue Dog” Democrats Prevent Your Neighborhood From Recovering From The Foreclosure Crisis?