I uploaded the entire Sellout Substitute Amendment championed by the Turncoat Caucus this weekend. Did you read through to the very end of the 778-page legislative text? Did your Senator? If you did, then you saw this:
SEC. 7001. MANDATORY LOAN MODIFICATIONS.
Section 109(a) of the Emergency Economic Stabilization Act of 2008 (12 U.S.C. 5219) is amended—
(1) by striking the last sentence;
(2) by striking ‘‘To the extent’’ and inserting
‘‘(1) IN GENERAL.—To the extent’’; and
(3) by adding at the end the following:
‘‘(2) LOAN MODIFICATIONS REQUIRED.—
‘‘(A) IN GENERAL.—In addition to actions required under paragraph (1), the Secretary shall, not later than 15 days after the date of enactment of this paragraph, develop and implement a plan to facilitate loan modifications to prevent avoidable mortgage loan foreclosures.
‘‘(B) FUNDING.—Of amounts made available under section 115 and not otherwise obligated, not less than $50,000,000,000, shall be made available to the Secretary for purposes of carrying out the mortgage loan modification plan required to be developed and implemented under this paragraph.
‘‘(C) CRITERIA.—The loan modification plan required by this paragraph may incorporate the use of—
‘‘(i) loan guarantees and credit enhancements;
‘‘(ii) the reduction of loan principal amounts and interest rates;
‘‘(iii) extension of mortgage loan
‘‘(iv) any other similar mechanisms or combinations thereof, as determined appropriate by the Secretary.
Yes, you read that correctly. $50 billion more of your money made available to tax cheat/bailout failout architect Treasury Secretary Tim Geithner to force banks to do loan modifications with homeowners deep under water on their mortgages. That’s in addition to the $20 billion already allocated by the House last month for the same purposes.
Banks have been engaged in these “mo mod” programs over the past year. The Democrats want to accelerate the pace and use the power of government to essentially provide a blanket amnesty for borrowers and lenders who made bad financial decisions. Yes, I know there are many responsible borrowers out there having trouble negotiating loan modifications. I’ve heard from some of you. But this $50 billion giveaway to the banks — the brainchild of unscrupulous borrower Chris Dodd – is exactly the wrong way to go.
As I’ve said before: If you give bad loan risks more money, you will get the same result.
The big question looming over the push to rewrite the home loans of people struggling to make payments is whether or not such mortgage modifications keep folks in their houses for the long term. As I’ve mentioned before, there’s a danger that loan modifications, at least the way they’re currently done, don’t solve the problem, just delay it.
This morning Comptroller of the Currency John Dugan gave a speech and shared some grim data: more than half of loans modified in the first quarter of 2008 fell 30 days delinquent within six months…The data come from the largest national banks and thrifts and cover 35 million loans worth more than $6.1 trillion, or 60% of all first mortgages in the U.S.
Dugan called the results, part of his agency’s new Mortgage Metrics report, “somewhat surprising, and not in a good way.” He pointed out that a person could argue that 60-day delinquencies are a better indication of future foreclosure, but those figures aren’t so good either—after six months, 35% of people were 60 or more days behind on their payments.
Where’s the fairness in forcing prudent homeowners and renters to subsidize people who bought overpriced houses and the banks who lent to them?!
Repeat after me: Housing is not an entitlement. Credit is not an entitlement. Stop artificially propping up the housing market.
No self-respecting Republican senator who claims to stand for fiscal conservatism and free-market principles can support this abomination.
Have you signed the petition? Nostimulus.com.