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Hillary Clinton calls for mortgage foreclosure moratorium.

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WASHINGTON--Hillary Rodham Clinton in the Thursday Wall Street Journal calls for a moratorium on mortgage foreclosures as part of any bailout package approved by Congress.

"We should also put in place a temporary moratorium on foreclosures and freeze rate hikes in adjustable-rate mortgages. We've got to stem the tide of failing mortgages and give the markets time to recover," Clinton said.


In the Thursday Washington Times, a look at McCain's congressional fund-raisers who are also requesting the earmarks McCain deplores.

Hillary Clinton: Let's Keep People in Their Homes

The following op-ed by Hillary Clinton appeared in the Wall Street Journal today:

http://online.wsj.com/article/SB122230767702474045.html?mod=todays_us_opinion

By Hillary Rodham Clinton

There is a broad consensus that Congress must act to stave off deeper turmoil on Wall Street. Irrespective of the final agreement yet to be reached, there are several principles that must be part of a broader reform effort that begins this week and continues in the coming months.

This is not just a financial crisis; it's an economic crisis. Therefore, the solutions we pursue cannot simply stabilize the markets. We must also deal with the interconnected economic challenges that set the stage for this crisis -- and reverse the failed policies that allowed a potential crisis to become a real one.

First, we must address the skyrocketing rates of mortgage defaults and foreclosures that have buffeted the economy and ignited the credit crisis. Two million homeowners carry mortgages worth more than their homes. They hold $3 trillion in mortgage debt. Nearly three million adjustable-rate mortgages are scheduled for a rate increase in the next two years. Another wave of foreclosures looms.

I've proposed a new Home Owners' Loan Corporation (HOLC), to launch a national effort to help homeowners refinance their mortgages. The original HOLC, launched in 1933, bought mortgages from failed banks and modified the terms so families could make affordable payments while keeping their homes. The original HOLC returned a profit to the Treasury and saved one million homes. We can save roughly three times that many today. We should also put in place a temporary moratorium on foreclosures and freeze rate hikes in adjustable-rate mortgages. We've got to stem the tide of failing mortgages and give the markets time to recover.

The time for ideological, partisan arguments against these actions is over. For years, the calls to provide borrowers an affordable opportunity to avoid foreclosure as a means of preventing wider turmoil were dismissed as government intrusion into the private marketplace. My proposals over the past two years were derided as too much, too soon. Now we are forced to reckon with too little, too late.

As a result, the home-mortgage crisis slowly eroded the value of debt instruments upon which Wall Street firms were depending. That is how this house of borrowed cards began to fall. If we do not take action to address the crisis facing borrowers, we'll never solve the crisis facing lenders. These problems go hand in hand. And if we are going to take on the mortgage debt of storied Wall Street giants, we ought to extend the same help to struggling, middle-class families.

Second, American taxpayers should have a voice and a stake in the resolution of this market crisis. If the Treasury proposal is enacted in its current form, the American government would assume enough financial risk to become the majority shareholder in the companies rescued by taxpayer dollars.

The American people are bearing the risk and therefore deserve to reap the rewards of a shared equity model. And mortgage securities bought by taxpayers must be valued accurately at prices disclosed in real time, with checks and reporting requirements to prevent abuse.

Third, taxpayers are being asked to bear an unparalleled degree of financial risk. We cannot allow taxpayers to take on this burden so that Wall Street and the Bush administration can hit the "reset button." This historic intervention demands a historic shift in priorities: an end to the broken culture on Wall Street, and the broken economic policies in Washington.

Corporations that will benefit must be held accountable, not only to large shareholders but also to the American people, who are rightly tired of business as usual: short-term profit at the expense of long-term viability; lax oversight and regulation; obscene bonuses and golden parachutes regardless of performance; reckless risk-taking that has placed the markets in jeopardy; rewards for foreclosing on middle-class families and selling mortgages designed to fail; and outsourcing good jobs to serve short-term stock prices instead of America's long-term economic health.

This is a sink-or-swim moment for America. We cannot simply catch our breath. We've got to swim for the shores. We must address the conditions that set the stage for the turmoil unfolding on Wall Street, or we will find ourselves lurching from crisis to crisis. Just as Wall Street must once again look further than the quarterly report, our nation must as well.

Mrs. Clinton, a Democrat, is a senator from New York.

5 Comments

Why don't we all stop paying our mortages? Or just pay the amount we think is fair? Or stop paying income taxes - the government already appears to have unlimited funds?

Why doesn't the government just buy a house for everyone in America? Or help out the automakers by buying a new car for every American with a driver's license?

Senator Clinton's proposal is economic nonsense!

So Dave,
Do you support predatory lending practices that doubled people's mortgage payments with terms the borrower could not understand? If you do, you are part of the problem. If Bush hadn't pushed his no down-payment ownership society as a way to make unsuspecting low-income people available(many couldn't even speak english) to be preyed on by a de-regulated banking industry that knew it could just pass the risk on, (as these lenders didn't hold their own mortgage debt), this could not have happened. Both parties caved to the lobbyists as dems should have supported regulating Fannie and Freddie, and no grownups were at home.

Hey Dave , I think you a very rich, why dont you help this people than, because you look very woried about other people's situation, Person's like you are the one's whom make the wolrd a nyce place to live,and viva Mrs. Clinton

The problem is most homes in my area are valued less than the mortgage. A lot of people did get equity lines of credit and improved their homes with granite counters, hardwood floors, solar panels, swimming pools, etc. This was always a good thing...to improve the value of your property as long as you didn't exceed the value of the comparable homes in your neighborhood. But now, those of us who were truthful in giving documentation of our income, and improved our home value are really in a bind. Because the value is not there anymore. Not due to anything we did. And, no one is willing to modify our loans, eventhough we have great credit and are keeping our homes up. It's a sad situation. People need to take responsibility for getting into adjustable loans. Did they think their income was going to triple in 3 years or less to meet the new mortgage they would have? I'm not rich, so don't try to tell me that one. My neighbors thought they could retire this year...they put 20% down on their home,..guess what the value isn't there to recoup that. Start helping those who don't spend everything they have and pay their groceries and mortgage first and haven't fallen behind on their loans but can't move or retire. Just give everyone in the U.S a flat 4.5%/40 year fixed rate. That's the big fixer we need. Everyone needs! With inflation creeping upward, gas prices rising again, food prices are crazy; we need a huge change that was promised in the last election on both sides of party lines. Let's get United again in these United States of America that we love!

I'm one of those homeowners that is underwater. I'm one of those homeowners that took out a 2nd for home improvements. I'm one of those homeowners that now is struggling to make my mortgage payments due to 75% reduction in income. I don't want to walk away from my home. I love my home. I don't care how much I owe, I want to pay it. Hopefully my loan mod will be approved so that I can stay in my home. I don't care if I'm 100k underwater. I'll pay the entire balance if I can get affordable monthly payments.

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Lynn Sweet

Lynn Sweet is a columnist and the Washington Bureau Chief for the Chicago Sun-Times.

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This page contains a single entry by Lynn Sweet published on September 25, 2008 10:03 AM.

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