Getting the Rescue Right

[BonnieJW]

http://www.truthout.org/docs_2006/printer_081007D.shtml


Getting the Rescue Right
    The New York Times | Editorial

    Friday 10 August 2007

    Help has been way too slow in coming for the estimated 1.7
million people who will lose their homes to foreclosure this
year and next. A modest bill to bolster funds for state, local
and nonprofit agencies that help hard-pressed homeowners
renegotiate their mortgages and restructure their debts has
been slogging through the Senate since April, and it won't be
passed until October at the earliest - if ever. On the
presidential campaign trail, Senator Hillary Clinton recently
promised to introduce a similar relief measure - next month.

    There has been far less procrastinating, however, when it
comes to offering help to investors, bankers and other lenders
who are feeling squeezed as the mortgage mess restricts their
access to easy money. Yesterday's smackdown in the stock
market - like others this year tied to mortgage woes - will
likely only intensify lawmakers' desire to ride to the rescue
of Wall Steet constituents.

    Earlier this week, Senator Christopher Dodd, another
Democratic presidential hopeful, and Senator Charles Schumer,
called on federal regulators to ease restrictions so that
Fannie Mae and Freddie Mac - the quasi-government mortgage
agencies - can buy more mortgages and mortgage-related
securities from lenders. That would grease the now creaky
mortgage-lending process with fresh capital. The White House
is considering their proposal.

(snip)

Many strapped borrowers stuck in subprime loans, with
adjustable rates that reset sharply upward, could have
qualified for higher quality loans to begin with. Instead they
were steered into the subprime variety by brokers who earned
bigger fees by making dodgier mortgages. Now that the lenders
are suddenly in trouble and credit standards have been
tightened, those borrowers cannot refinance into higher
quality, more affordable loans. They clearly deserve help to
keep their homes.