Foreclosures Relief Has to Wait Till Obama takes over
December 10th, 2008
It seems unlikely that right now anything further will be done to bring relief to foreclosure victims. Unemployment is increasing and the lawmakers are busy handing out help to automakers in Detroit. Wall Street shows signs of health for the second consecutive day with indexes spiking by 3%.
But help for foreclosures will have to wait for Obama. Rep. Barney Frank (Democrat) was speaking with reporters at a conference focusing on housing. He said the use of a part of the $700 billion package to address the foreclosure problem would have to wait till the swearing in of Obama.
The FDIC has suggested use of $24 billion from the $700 billion to help the foreclosure victims. Frank did not give details of the proposal or whether a new law would be required to put it into effect. Frank however threatened that the second installment would get blocked if Bush failed to provide relief to those facing foreclosure. He categorically stated, “They’re not going to get the (money) unless they get very serious about the foreclosure modifications.” He said that the government would have to show in action the banks making loans. He cynically added, “At this point I don’t see that happening.”
According to the Treasury Department $335 billion has been sanctioned for the first part of the programme nearly two months ago Henry Paulson, the secretary of the Treasury is supervising the matter and is now thinking of taking out the second half due – $350 billion. Initially the main target was to give the money to the banks so that they can start lending again.
But the Bush government has relied mainly on the voluntary efforts of the lending industry to modify the mortgages. This has not seen any positive results. The pace of foreclosures has not slowed down. Nell Kashkari is the director of the Treasury Department. He justified the action of the present government and said, “Imagine how many foreclosures we would have if the financial system had been allowed to collapse”. He was speaking at the same conference.
The critics are publicly loud in their disappointment. They had hoped that the bailout package would go a long way in helping the foreclosure victims. A bipartisan commission that has been specially set up, headed by Henry Cisneros and Jack Kemp (HUD secretaries) took to task the Bush administration for the raging foreclosure crisis and its poor response to address it.
- Fewer Foreclosures Among Low-cost Brooklyn Homes
- Bank of America is a Lagging Behind in Loan Modifications to Prevent Foreclosures
- The Aftermath of the Housing Boom is Followed by Foreclosure Doom in Homestead
- Lenders Being Legally Challenged for Activating Predatory Lending
- Foreclosures Have Made Life for CEO’s Expensive and Fraught With Fear
- With Foreclosures and Unemployment Continuing it is Doubtful if Recession is Over
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February 9th, 2009 at 2:38 pm
[...] Since foreclosures are centred in four states many are posing the obvious question – why should the others bear the burden for these few? The taxpayers across the country will have to share the pain of the bailout package. [...]