Clinton urges foreclosures moratorium

[rodeodance]

Clinton urges foreclosures moratorium


By SAMANTHA GROSS, Associated Press Writer
Thu Dec 6, 6:57 AM ET



NEW YORK - Democrat Hillary Rodham Clinton called on Wall Street to accept some responsibility for the home foreclosure crisis, saying Wednesday the financial sector gave mortgages to people who were unlikely to be able to make repayments.

ADVERTISEMENT

"I believe Wall Street shifted risk away from people who knew what was going on, onto people who did not," the New York senator told a gathering of business leaders at the NASDAQ Marketsite in Times Square.

The Democratic presidential candidate proposed several steps to forestall mortgage foreclosures, including a 90-day moratorium on further loan foreclosures on owner-occupied homes and a freeze that would keep subprime mortgage rates from rising for at least five years.

Clinton spoke a day before the Bush administration's expected announcement of its own plan to address the mortgage crisis. Congressional aides told The Associated Press the administration's deal would include a provision for a five-year freeze on interest rates for certain subprime mortgages. The aides spoke on condition of anonymity because the details have not yet been released.

[thereismore]

1. 90-day moratorium? Then what? nt

[Tesha]

4. Ninety days puts us past most of the primaries.

After that -- Who cares???

Tesha

[dbackjon]

2. So companies should just take a financial bath for those 90 days??

[LeftCoast]

3. Well, they ARE the ones that gave out money with absolutely no verification of ability to pay

They're hardly blameless.

[dbackjon]

6. I don't feel sorry for either party

But a 90 day moratorium does nothing but forestall/exaserbate the issue.

Lending companies do NOT want to foreclose...

[LeftCoast]

8. That's true

Perhaps they can work out staggered agreements so that they don't have a glut of foreclosures coming onto the market all at once though. I assume the moratorium is simply to give them more time to work out a long term plan.

[dysfunctional press]

5. no...they can spend the time lining up all the paperwork-

so that the mountain of backed-up foreclosures on day 91 can go that much more smoothly.

[Bake]

9. They're going to take a bath either way

The buyers of the mortgage backed securities count on borrowers actually making their payments in order to provide the return on their investment. A foreclosure means the lender is getting ZERO income for a number months, while the foreclosed house sits on the market.

Bake

[Ravy]

10. They are going to take a financial bath anyway.

If they get back the property, they will undoubtably have to sell at a loss. This way, legislation can be in place to hopefully find an equitable way for the mortgage company to get their original investment back, although at a lower interest rate than they had planned on, rather than taking a loss in one lump sum further lowering the market.

[glowing]

7. My mom told me up in Vermont, that it was illegal to evict anyone

through the winter months even if they can't pay... so from Oct to March or April I think you can't put anyone out in the cold... She was worried about renting my grandmother's home out thru the winter because if they didn't pay, she'd be stuck with someone else costing her money.