The Bush Administration is balking at helping Main Street homeowners after several bail outs on Wall Street in a New York second. Apparently the administration’s dilemma is concerns over a loan modification program that may help as many as 3 million homeowners through $500 billion of home mortgage guarantees.
The players in the negotiations include officials from the US Treasury, the Federal Deposit Insurance Corp. (FDIC), the Department of Housing and Urban Development (HUD) and other agencies are focusing on two possible “foreclosure” plans.
Funding for the potential “homeowner” initiative would come from the $700 billion Emergency Economic Stabilization Act package passed by Congress early last month. To date, most of the money from the billion dollar package has gone directly to Wall Street in attempts to fuel and build confidence in the credit markets.
The pressure is now on the Bush Administration to do “something” to help Main Street and ease the foreclosure crisis. The Administration has been heavily criticized for doing too little to help consumers struggling and losing their homes.
NY Times:
A White House spokeswoman, Dana M. Perino, said on Thursday that the plan was not “imminent” and that several different proposals were being considered.
“If we find one that we think strikes the right notes and could meet all of those standards that we want to protect taxpayers, make sure that it’s also fair and that it would actually have an impact, then we would move forward and we would announce it,” Ms. Perino said.
Time Magazine reported that Senate Banking Committee Chairman Chris Dodd is urging the Bush administration to focus its attention on a strategy to help homeowners facing foreclosure.
In a letter sent to the president Thursday evening, Dodd criticized the administration for failing to “dedicate the time, attention or resources” needed to address the historic levels of foreclosure that were the root cause of the nation’s economic crisis.
“We are aware of recent news reports that progress is being made within your administration to adopt a program to reduce foreclosures,” he said. “While we certainly hope that these reports are true, they have been circulating for over a week without confirmation.”
Dodd said that the Treasury Department must “act decisively, aggressively and swiftly” to reduce foreclosures.