Bailout Should Save Homes From Foreclosure

Sheila Bair, FDIC Chairwoman, said she believes that federal bailout money should be used to prevent foreclosure and help homeowners.  This common sense approach is both refreshing and rare in the current administration.  Former investment banker and now Treasury Secretary Henry Paulson, the administration official responsible for doling out the $700 billion in TARP funds appropriated by congress, appears to be resisting Ms. Bair’s lobbying on behalf of homeowners.

Bair’s approach is much too obvious to appeal to an investment banker.  It is the volume of home foreclosures that is driving down home prices and destroying the collateral held by banks and investors.  Unless Paulson gets the message soon, the US automobile industry may be the next casualty.  A homeowner facing foreclosure is not considering purchase of a new vehicle.  Homebuilders are not buying new pickup trucks.  Mortgage lenders and realtors have no money to buy vehicles and are simply trying to put food on the table and avoid foreclosure themselves.

Related posts:

1. Forget Political Rhetoric: Bailout will not save the economy – Part 2
2. Why Do So Many People And Organizations Support the “Helping Families Save Their Homes in Bankruptcy Act of 2009”?
3. The King Amendment to the Helping Families Save Their Homes In Bankruptcy Act 2009