rssThe White House on the Foreclosure Crisis
Monday, October 11, 2010 at 2:12 pm
- 14 Comments
Here is David Axelrod (PDF), speaking with CBS’s Bob Shieffer this weekend:
BOB SHIEFFER: Just when we thought it couldn’t get any worse now we find that this sloppy paperwork by the lenders may have made some of these foreclosures now that are being contemplated invalid. Some of the biggest lenders are now freezing foreclosures until they can get all this straightened out. I guess the first question I would have is does the administration favor some kind of national moratorium on these foreclosures to get this all sorted out?
DAVID AXELROD: First of all, Bob, it is a serious problem. It’s thrown a lot of uncertainty into the housing market that is, you know is already fragile. And it’s — and it’s bad for the housing market and it’s bad for these institutions which is why they’re scrambling –
BOB SCHIEFFER: Hm.
DAVID AXELROD: –now to– to go back through and– and– and through their documentation for all of this as they should. The President was concerned enough to veto a bill that came to him last Thursday, that would have unintentionally made it perhaps easier to make mistakes. And, so we are concerned. We’re working with these institutions. I’m not sure about a national moratorium because there are, in fact, valid foreclosures that — that– that probably should go forward. And where the documentation and paperwork is — is proper, but we are working closely with these institutions to make sure that they expedite the process of going back and reconstructing these and throwing out those that don’t work.
BOB SCHIEFFER: Well, I mean, I guess people are worried about what do you think the impact this is going to have on an economy that’s pretty shaky right now anyway?
DAVID AXELROD: Well, look, our hope is that this moves rapidly and that this gets unwound very, very quickly and that they — they — they can go back reconstruct their paperwork and what we’ve stressed to them is that they need to expedite that process and work very, very quickly to get it done. And we’re going to continue to — to push for them.
This is tantamount to the White House saying: “We think the banks should just deal with this themselves, and despite the now tremendous evidence of systemic fraud in mortgage documentation, we trust them to do so appropriately.”
Granted, there is no easy solution here. Seizing the housing markets right now could force a double-dip in house prices, putting more people underwater, begetting more unemployment. But saying that the White House is working for banks rather than advocating for homeowners seems wrong.
Instead, the White House might consider saying something like this: “We’re not going to let banks repossess any home without due process. That is not to say we’ll halt foreclosures, but that we’re assuring homeowners we’re on their side. At the same time, we’re working to bolster the HAMP program, and considering pushing forward right-to-rent and cramdown legislation as well. Those programs will help families through the foreclosure crisis, keeping them in their homes while, secondarily, assuring stability in the banking sector and in mortgage finance.”
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14 Comments
Pingback posted October 11, 2010 @ 2:31 pm
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Comment posted October 11, 2010 @ 6:42 pm
Now even the upper middle class who some helped orchestrate the trading away of our jobs are now suffering the “trickle down” effect of foreign competition No jobs, no paychecks, no customers AND competing wholesale with foreign owned and state backed business to boot! Both the Dems & Repubs are responsible for catering to the wealthiest 1%!
During the last depression, the Frazier-Lemke Moratorium Act of 1935 halted foreclosures on family farms for a three-year period, provided that a local court of law would give its approval both as to the propriety of the delay and the adequacy of the rental to be paid in the interim. Frazier-Lemke was challenged in the courts, “but the Supreme Court upheld the law in Wright v. Vinton Branch of Mountain Trust Bank of Roanoke. After expiring in 1938, the act was renewed four times until 1949, when it expired. The 2010 White House has a problem with a foreclosure freeze even after this historical precedence?
Sooo now a person wants to buy a home and goes to a bank & “borrows” the money & borrower agrees to pay bank back with interest…pretty standard so far…the bank then SELLS the mortgage, as a MBS (Mortgage Backed Security) to an investor, thereby removing said mortgage from the bank's balance sheet.
The bank has already been paid for the borrower's mortgage when it was sold to an investor & the bank now acts as a “servicer” on behalf of the investor.
When the financial crisis hit we the taxpayer, via AIG, who had insured the MBSs of a massive amount of these investors, paid 100 cents on the dollar for these securities thereby making the investor whole.
Also, the FED bought over a trillion dollars worth of these MBSs.
So at this point we have a borrower who owes X amount of dollars but the bank has sold the mortgage and the investor has already been made whole. So who is getting the borrower's money if they are in good standing and making payments or the home if they are in foreclosure?
Not the bank, they sold the mortgage, not the investor because the taxpayers already paid them….
Answer is: that money is no longer owed to anyone if that mortgage was either insured by AIG or purchased by the Federal Reserve. The taxpayers already paid for the home, & not just subprime, also well performing mortgages. If the money is owed to anyone it's the taxpayers.
In fact, if you are making a mortgage payment, your mortgage was probably paid off by taxpayers through AIG or the FED 2 years ago and you don't even know it!
So who is getting all this money from mortgage payments?
Americans have become “Eloi” people relying on the world's industrial and financial “Morlocks” for our sustenance!
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Trackback posted October 12, 2010 @ 11:24 am
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Pingback posted October 12, 2010 @ 5:54 pm
[...] least we’ll have the “certainty” in the market that David Axelrod craves. The certainty that we’ll continue to get the [...]
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