Paulson Outlines Mortgage Aid Plan
Proposal Would Expand Help At Local Level
By David Cho and Neil Irwin
Washington Post Staff Writers
Tuesday, December 4, 2007; A01
Treasury Secretary Henry M. Paulson Jr. unveiled new details of the Bush administration’s mortgage-relief plan yesterday, including a proposal that would grant new powers to local governments to refinance the mortgages of struggling homeowners.
. . . The worst slumps are in California, Florida, Nevada and parts of the Washington region, especially Northern Virginia, Zandi said. Most of those areas have seen at least a 7 percent decline in housing prices from the beginning of the summer, he said, adding that a 20 percent decline overall is likely by early 2009.
. . . The major sticking point is the investors who buy securities made up of subprime loans. For years, they provided the financial backing that allowed mortgage firms to expand their lending. No type of loan made more money for investors, or was as risky, as subprime mortgages, because they required homeowners with shaky credit to pay more interest.
If lenders agree to freeze loans at lower rates, investors would lose out on the higher payments promised under the original loans, which could give them grounds to sue the lenders.
“While the devil in the details, this is the first time the administration is devising a plan that meets the magnitude of the problem,” said Sen. Charles E. Schumer (D-N.Y.). “If investors can be compelled to go along without long legal delay, it has the potential to make a real dent in the problem.”
What a great idea–welcoming local governments into the mortgage-lending business. And this guy Paulson has been allowed to become Treasury Secretary (from where? Why from Goldman Sachs, where else?). Now the losses can be spread to everyone–everyone except the bottom-feeders who profited.
According to Douglas W. Elmendorf, a senior fellow (which qualifies him as a senior advisor on almost anything) at the Brookings Institution,
“If you let everybody off the hook, that’s not in the interest of the lenders.”
Who in hell (besides this administration) cares about the ‘interests’ of the lenders, whose incredible greed, obfuscation and outright theft led to this debacle? We are also asked to grieve over the ‘interests’ of the investors, those self-serving bastards who buy securities made up of sub-prime loans and rob the sub-basements of the sub-poor to do it.
“For years, they provided the financial backing that allowed mortgage firms to expand their lending. No type of loan made more money for investors, or was as risky, as sub-prime mortgages, because they required homeowners with shaky credit to pay more interest.”
Treasury Secretary Paulson is actually worried about pulling investor chestnuts out of a fire of their own creation. The banks have been robbed and now Paulson’s going to make sure the robbers don’t sue us for catching them.
Housing prices have seen a 7% decline from the 100% investment-frenzy bubble these thieves encouraged. Terrific! Prices are expected to decline to 20%. Better yet! Reality finally overcomes giddy expectation.
The examples of “Shock Doctrine” never stop. In this government encouraged shell game,
- the poor have been victimized,
- the greedy rewarded,
- the worldwide economy brought to its knees and–in the ensuing confusion–
- Paulson and Bush are turning truth into fiction and economic principle over to the un-principled–for what?
To reward crookedness. Anything goes, just so long as their thieving, avaricious, paid-off and paid-up Republican ‘base’ don’t get caught with their tit in a wringer.
Jail was OK for Enron thieves. But Milton Friedman style laissez faire economic inventions–principally hedge funds, which are unregulated and not understandable–have been allowed to ravage and put at risk the world economy. Small towns in northern Finland are coming apart because of their investment pools in hedge funds, infected by the sub-prime virus.
Instead of looking for the thieves, which is the primary responsibility of financial governance, Ben Bernanke and Henry Paulson are turning the Fed and Treasury into private bailout institutions.
Which is against the law, if Congress could only find the law–conveniently slipped down there between the cracks in Chuck Schumer’s desk.
This single Bush administration has ravaged a proud nation, beggared us and threatens to bring down a world economy . . .
. . . while no one raises an eyebrow.