Clinton pushes for restructuring, new thinking on foreclosure crisis
By TODD SPANGLER • FREE PRESS WASHINGTON STAFF • March 24, 2008
Hillary Clinton this morning unveiled a new four-part plan to address the nation’s housing crisis, calling for more at-risk home loans to be restructured and the creation of a panel of experts to study the problem.
In a speech in Philadelphia this morning, the N.Y. senator -- who is battling Illinois Sen. Barack Obama for the Democratic presidential nomination – outlined her plan. She said in an earlier news release that “aggressive action” is needed to help families avoid foreclosure, a problem she blamed for exacerbating the nation’s economic woes.
Metro Detroit has been one of the leading areas of the nation in terms of home foreclosures.
"The solution I’ve proposed is a sensible way for everyone – lenders, investors, mortgage companies and borrowers – to share responsibility, keep families in their homes and stabilize our communities and our economy," said Clinton.
Her plan would:
•Expand the federal government’s capacity to facilitate broad-based mortgage restructuring for people who can’t afford their payments in tandem with a private-sector auction of large pools of mortgages as a way to loosen credit markets and give lenders an incentive to refinance troubled loans. Specifially, she wants the Federal Housing Administration or another government agency to be ready to purchase, restructure and re-sell troubled mortgages if a private-sector auction doesn’t do it.
•Call for President George W. Bush to appoint a panel of experts “headed by a nonpartisan group of eminent leaders like (former Federal Reserve chairman) Alan Greenspan, (former Fed chairman) Paul Volcker and (former Treasury Secretary) Bob Rubin – each of whom supports one of the remaining candidates in the presidential race.” The group would report to Congress and the Bush administration within three weeks on the bast way to solve the housing crisis.
•Pass legislation that clarifies any legal issues that might discourage mortgage companies from restructuring loans by balancing the interests of mortgage investors, homeowners and the mortgage servicing companies.
•Move forward on her plan for a $30-billion Emergency Housing Fund to get money to state and local programs aimed at helping families avoid foreclosures. It would allow groups to buy foreclosed or distressed properties “putting them back into productive use” and let groups work to restructure loans of people with problems making their payments.