Bush, Paulson & Bernanke object to mortgage bailout programs

WASHINGTON (Thomson Financial) - President George Bush and the two highest economic officials in the US government all objected strongly today to plans in Congress for changing bankruptcy laws to protect homeowners caught up in the mortgage meltdown.

The idea of allowing bankruptcy judges to restructure loans 'wouldn't be fair to millions who pay their mortgages each month on time and it would be unfair to future homeowners,' Bush told reporters summoned to the White House for a morning press conference.

Later in the morning, Federal Reserve Board Chairman Ben Bernanke highlighted potential unfairness, telling Congress that allowing judges to ease the terms of some mortgages would 'probably' add to the cost of all mortgages.

'I don't know how much it would add,' Bernanke told the Senate Banking Committee.

'I think it would probably add something, because collateral would be less secure,' he said.

Despite a looming veto threat from the White House, the Senate may vote on legislation next week that would allow bankruptcy judges to adjust loans in order to help keep people in their homes.

US lenders have also opposed the proposal as something that would lead to higher mortgage costs for all borrowers, since lenders would have to insure against the possibility of only partial repayment of mortgage loans.

Senator Evan Bayh, a Democrat from Indiana, defended the proposal today by arguing that only existing mortgages could be altered under the bill and therefore should not affect future rates prospective borrowers would have to pay.

But Bernanke said the bill would raise the question of whether Congress would try to broaden the measure, which could lead to mortgage cost increases.

For that reason, Bernanke said he would 'decline to endorse' this particular legislative proposal.

In the early afternoon, Treasury Secretary Henry Paulson jumped into the fray, releasing remarks from a speech to be given tonight at the Economic Club of Chicago.

'So while some in Washington are proposing big interventions, most of the proposals I've seen would do more harm than good,' Paulson is scheduled to say, according to the excerpts released to reporters in Washington.

'Im not interested in bailing out investors, lenders and speculators,' he added.

Instead, Paulson is pushing harder for both lenders and borrowers to avoid delays in mortgage relief programs already going on. Paulson noted that 93 pct of mortgages are paid on time and only 2 pct are in foreclosure.

Treasury wants lenders and servicers who have already committed to restructuring for qualifying homeowners to speed up the process and Paulson is using tougher language.

January data on how the mortgage servicers are performing is due in soon, and 'I'll be examining the results closely,' Paulson is to say.

Bernanke also complained that mortgage servicers are not yet ready to deal with the 'tsunami' of foreclosures that is underway.

Category:

News & Politics

Tags:

• Paulson
• subprime
• mortgages
• Forbes
• Bernanke
• Not
• Big
• Penny
• Fan
• Wall
• Street
• US
• mortgage
• aid
• bailout
• housing
• slump
• Obama

[UnconcernedCitizen]

I will contribute to the bailout fund if Henry (Hank) Paulson — U.S. Treasury Secretary, former Goldman Sachs CEO, and all-around bald guy ponies up the $200 million in capital gains tax he was exempt from having to pay. It seems Hank made a bundle from 2003 to 2006 and did not have to show Uncle Sam the money. I made around $17,776 during the same period and though I have already paid Uncle Sam, I would cough in a few more bucks if Hank throws up, err in, his $200 million.

[hurchel]

amen, unconcerned citizen well said.  Of course neither of us should hold our breath..

[tickyul]

@samten10a Well, at least the US government could start to dismantle Fannie/Freddie, that would be a start.

[samten10a]

@tickyul

.

IMost of lack of regulation is because of a lot of bad PR that started back in 1965. It convinced the citizens. So when congress had a poll of the citizens wanted guess what. That poll showed the citizens wanted the gov to DE-REGULAT what ever industry and that allow the crooks to rip off the citizens. Do you want hear what the PR propaganda was????

[samten10a]

@tickyul It was (THE GOVERNMENT HAS NO BUSSINESS IN CONTORLING BUSSINESS.) Ever time I hear that or some thing like that 4 to 6 years latter that industry melts down and the citizens get hurt and gov bails them out.

[gsukrw06]

@tickyul I know, I believe you. It doesn't sound crazy to me. What I'm sayin is: I don't care...if my comments on youtube haven't gotten me on the "list" then my group affiliations, voting record, financial contributions, and books will. I want you to get up out of your chair, go to the window and yell, "I'M AS MAD AS HELL AND I'M NOT GONNA TAKE IT ANYMORE!!!" lol

[tickyul]

@gsukrw06 The Nsa's Predator System can monitor just about EVERY electronic transmission in the world. A computer algorithm can screen these transmissions for PHRASES of interest, including Youtube posts. When these posts are Red Flagged, they will be evaluated by a human for further classification......you may end up getting on the US Governments LIST, it you know what I mean. This is not tin foil hat stuff, it is real.

[gsukrw06]

@tickyul ...I'm an enemy of the State and I want the State to know it! Big bro won't do anything and if it ever did, I'd welcome the opportunity to protest within a legal framework.

[tickyul]

@gsukrw06 Careful, Careful, Big Brother is monitoring.

[Ironoff]

All this trouble for bricks and mortar... buy a tent instead.

[tickyul]

@Epicurus2828 These are structural problems that have built up over many decades, no fix in sight. It would take the Retards in both parties to work together on TRUE systemic changes...uh, that is not going to happen. The Republirats and Demorats are mostly interested in staying in power.

[tickyul]

@hurchel Be carfeful of what you say my freind, Big Brother is watching.