'World News' Jumps to Criticize 30-Day Foreclosure Freeze
No amount of reprieve for debtors is âsufficientâ for critics. Following the Bush administrationâs latest announcement of a mortgage grace period, ABC News fretted.
The program was announced by Treasury Secretary Henry Paulson and is called âProject Lifeline.â It is targeted toward homeowners who are already 90 days or more delinquent in their mortgage payments and it would give them a 30-day pause â more than these lenders are obligated to do.
But, thatâs not quite good enough for Allen Fishbein, Director of Credit and Housing Policy, Consumer Federation of America (CFA). Fishbein appeared on the February 12 ABC âWorld News with Charles Gibsonâ and insisted this wasnât âsufficient.â
âWe donât think itâs going to be sufficient, unless it leads to a permanent solution through loan modification to make these payments affordable for homeowners,â Fishbein said. âOtherwise, itâs just a PR effort.â
Fishbeinâs organization, CFA, advocates more government regulation in areas of home foreclosures. According to a January 30 CFA press release, the organization recommends to âestablish new consumer protections to restore responsible lending in order to prevent the crisis from happening again.â
ABC correspondent Betsy Stark fretted that some homeowners wouldnât be covered under this proposal because it is not government-mandated.
âMany homeowners in trouble will never even get the opportunity to buy some time because todayâs program is voluntary,â Stark said. âIf your mortgage company decides not to participate, there will be no lifeline for you.â
Democratic presidential candidate Hillary Clinton has a different âfreezeâ plan some claim would fix these mortgage problems.
âWell, I would have a very aggressive policy toward trying to stop home foreclosures,â Clinton said on CNNâs âAmerican Morningâ February 5. âAgain, Iâm the only candidate left in this race on either side whoâs been talking about the mortgage crisis for nearly a year. We need to put a moratorium on foreclosures to help people stay in their homes and we need to freeze these interest rates that continue to escalate, driving more and more people into foreclosure. A lot of people were misled. They were the victim of predatory lending practices and we need to stabilize the housing market.â
But, as Massachusetts personal finance lawyer Stephen Heine pointed out to The New York Times, such a moratorium could be unconstitutional and likely very useless. â A 90-day âmoratoriumâ on foreclosures is ludicrous, possibly unconstitutional, and of no help to someone who is already 6 months behind,â Heine said.