Foreclosure moratorium in 2007 + more bailout lies

First of all, I think it is ironic that the experts and banks who laughed at this idea back 2 years ago are eating crow pie, now that they have been knocked off their pedestals. Of course, at that time the economy was much better than it is today.

Those banks that we have bailed out with taxpayer money are now forced to do the moratorium because they can not keep up with the pace of foreclosures from all those bad loans they approved. Personally, I think they should fail and go bankrupt, and have the FDIC take over them. That is what that system is set up for. We should have literally given the previous trillions to the FDIC. No need to pay $500,000 to CEOs to lose BILLIONS more since they have essentially bankrupted the banks.

This article was printed in 2007:

WASHINGTON (Reuters) -

Democratic presidential hopeful Hillary Clinton proposed on Monday a 90-day moratorium on home foreclosures to give financially troubled borrowers time to work with lenders and avoid losing their homes.

The New York senator outlined the proposal in a letter to U.S. Treasury Secretary Henry Paulson, who is trying to broker a deal with mortgage lenders that would help troubled borrowers.

The crisis surrounding subprime mortgages extended to borrowers with spotty credit has unnerved financial markets and could deepen a slump in the U.S. housing market that some economists fear has pushed the economy close to recession.

“It is critical that we address this crisis,” Clinton said in a letter to Paulson. “The administration and the mortgage industry must reach agreement that matches the scale of the problem. If you produce an inadequate agreement, or fail outright, the cost to our economy will be incalculable.”

The U.S. Treasury Department has been pushing the mortgage industry to agree to temporarily freeze interest rates for some borrowers who took out loans with low teaser rates that will soon be resetting much higher. More than 2 million borrowers are estimated to be facing rate resets.

Clinton said any agreement should include a moratorium on foreclosures of at least 90 days on owner-occupied homes with subprime mortgages. Any agreement should also include a rate freeze on adjustable mortgages of at least five years or until the loan is converted into a fixed-rate mortgage, she said.

Clinton said the freeze would give the housing market time to stabilize and homeowners time to build equity. She also called on the mortgage industry to provide regular reports on the number of mortgages they have modified.

If the administration fails to secure an agreement that includes those provisions, Clinton said she would push for legislation that would allow lenders to convert subprime mortgages into more affordable loans without permission of investors.

She also called for a $5 billion fund to help hard-hit communities and homeowners cope with the foreclosure crisis.

The subprime mortgage crisis has hit some states harder than others, including Florida, Nevada, California, Michigan and Ohio — key states in next year’s presidential elections.

Not only were the 3 financial stooges Bush, Bernanke, and Paulson against this idea, but so was Obama. At the time the economy was much stronger then than it is now. Yes, just a year ago Obama was against a foreclosure moratorium and attacked this Clinton ad.

After Hillary Clinton proposed her foreclosure moratorium, the Los Angeles Times reported that Obama condemned her plan:

In San Antonio on Tuesday, Obama said that Clinton’s foreclosure freeze was potentially “disastrous,” rewarding “people who made this problem worse” by benefiting banks that profit from high mortgage rates.

Recently, there has been much more panic to do something even though we are already in the mix of things. Later in one her of op-eds, Clinton even sounded like one of the housing bubble bloggers I would read. Wall Street Journal:

Hillary Clinton

First, we must address the skyrocketing rates of mortgage defaults and foreclosures that have buffeted the economy and ignited the credit crisis. Two million homeowners carry mortgages worth more than their homes. They hold $3 trillion in mortgage debt. Nearly three million adjustable-rate mortgages are scheduled for a rate increase in the next two years. Another wave of foreclosures looms.

I’ve proposed a new Home Owners’ Loan Corporation (HOLC), to launch a national effort to help homeowners refinance their mortgages. The original HOLC, launched in 1933, bought mortgages from failed banks and modified the terms so families could make affordable payments while keeping their homes. The original HOLC returned a profit to the Treasury and saved one million homes. We can save roughly three times that many today. We should also put in place a temporary moratorium on foreclosures and freeze rate hikes in adjustable-rate mortgages. We’ve got to stem the tide of failing mortgages and give the markets time to recover.

The time for ideological, partisan arguments against these actions is over. For years, the calls to provide borrowers an affordable opportunity to avoid foreclosure as a means of preventing wider turmoil were dismissed as government intrusion into the private marketplace. My proposals over the past two years were derided as too much, too soon. Now we are forced to reckon with too little, too late.

Eventually, Obama changed his stance on this issue. Now, Clinton is even in the Obama cabinet. He officially changed his stance in October 2008:

Reuters:

Today, Obama Is Copying A Clinton Housing Proposal He Originally Opposed

WASHINGTON, Oct. 14

Obama’s New Plan To Impose A 90-Day Moratorium On Home Foreclosures Copies A
Proposal Put Forth By Sen. Hillary Clinton Back In January:

Today, Obama Is Proposing A “Three-Month Moratorium On Foreclosures.” Obama:
“For those Americans in danger of losing their homes, today I’m also proposing
a three-month moratorium on foreclosures.” (Mark Halperin, “Excerpts From
Obama’s Economic Speech In Toledo, Ohio,” Time’s “The Page” Blog,
thepage.time.com, 10/13/08)

As Part Of Her Economic Stimulus Plan, Clinton Proposed A 90-Day Moratorium On
Foreclosures. Impose “[a] 90-day moratorium on subprime foreclosures and an
automatic rate freeze on subprime mortgages of at least five years.” (Hillary
Clinton For President, “Clinton Unveils Aggressive Plan To Jumpstart U.S.
Economy,” Press Release, 1/11/08)

Clinton’s “Trouble” Ad Said She Called For “A Freeze On Foreclosures. Barack
Obama Said No.”

Now here we are in 2009, after 3 million foreclosures in 2008 and an economy that is in a more severe recession, I feel the same people who didn’t have answers before are leaping into more bad decisions with even more dire consequences. Bush, Bernanke, and Paulson along with the Democratic controlled Congress approved bailout bills in the tune of almost a trillion dollars last October. After they spent almost $400,000,000,000.00 ($400 billion) in 3 months to bail out “wall street”, the US economy is even worse and that money had no effect on it. No one benefitted with the exception of hundreds of CEOs who legally defrauded the US taxpayers for their million dollar bonuses and compensation.

Now in the past 2 weeks, Obama and the same Congressional IDIOTS are passing another trillion dollar bill that they created in 2 weeks! to save the economy. They did not even read the +1400 pages bill drafted overnight. Where is this money coming from? Originally it would create 1 million then 2 million, then 3 million, and recently now 4 million jobs. The words were later changed to “create and save” jobs so we don’t have any way to measure if it is working. This is more of the same deficit spending that is no different than the Bush administration.

Here is a reality check from ABC:

President Obama today repeated the claim we asked about yesterday at the press briefing that Jim Owens, the CEO of Caterpillar, Inc., “said that if Congress passes our plan, this company will be able to rehire some of the folks who were just laid off.”

Caterpillar announced 22,000 layoffs last month.

But after the president left the event, Owens said the exact opposite.

Asked if the stimulus package would be able to stop the 22,000 layoffs or not, Owens said, “I think realistically no. The truth is we’re going to have more layoffs before we start hiring again”

“It is going to take some time before that stimulus bill” means re-hiring, he said.