Presidential Candidate Subprime Bailout Position

In case you haven't heard, it's an election year.  This means endless and tiresome political commercials, mailings, and even phone calls.  This is not a political blog, as god knows there are enough of them out there.  But, as politics can have a major impact on our collective and individual pocketbooks, I'm going to venture into some political ground.

About two years ago, there were a handful of housing bubble blogs and risky finance blogs out there warning us of the impending housing and mortgage meltdown.  Most notably, The Housing Bubble Blog and Another F'd Borrower.  The housing industry dismissed such talk as doom and gloom.  A bunch of Chicken Littles.

Then it began.  Sales slowed.  The rate of price increases slowed.  Then flattened.  Soon, the subprime mortgage holders who were relying on price increases in order to refinance or sell at a profit found themselves in trouble.  And we all know what followed.  Government intervention.

I made my position on the matter known in an open letter to my senator.  As expected, the idea of a bailout is predominantly a Democrat issue.  Surprisingly, however, it has crossed the aisle.

So, as we continue into the primaries, and try to educate ourselves on the candidates and their positions, I have taken some time to research where each of them stand on the subprime bailout.

Hillary Clinton:

• 90 day moratorium on foreclosures
• Five year freeze on interest rates of ARMs
• Only applies to owner-occupants
• Applies to both borrowers who are current and behind in payments
• $5 billion to help hard hit communities and individual borrowers withstand the “foreclosure crisis.” Link

Barack Obama:

• Fining unscrupulous lenders to partially pay for a bailout fund for distressed borrowers. Link
• Create a fund to help people refinance their mortgages
• The fund will also assist those who purchased homes that are simply too expensive for their income levels by helping to sell their homes. Link

John Edwards:

• Enact a strong national law against predatory mortgages.
• Rewrite certain abusive mortgages in bankruptcy to let families keep their homes
  • Allow underwater homeowners to “shed excessive mortgage debt in bankruptcy”
  • Allow underwater homeowners to keep their homes by paying off their full market       values and get new loans set by the bankruptcy court.
• Rescue homeowners at risk of foreclosure
  • Help such as renegotiating loan terms, finding a new lender or catching up with past payments
• Hold lenders and investors accountable
  • Wants specific commitments from lenders and wall street such as waiving       prepayment penalties, restructuring loan terms and forgiving back payments. Link

Mike Huckabee:

• “The one problem with the plan,” said Huckabee, “if it freezes banks from being able to      foreclose, if this trend should continue, you really do create a chilling effect on the lending industry because who’s going to want to lend money if they don’t have the capacity to get their asset back if there’s a default on the loan.” Link
• “I don’t think it’s gone too far,” Huckabee said of the government’s intervention, “but it’s on the edge. I wouldn’t push it any further and I sure wouldn’t spend one dime of taxpayer money
• Opposes congress enacting new predatory lending laws

Mitt Romney:

• Favors broad tax cuts, specific for middle class taxpayers. Claims tax break proposal would help those on the financial edge to make their monthly mortgage payments. Link

Fred Thompson:

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Comments

[PT from Prime Time Money]

Thanks for gathering all this. Interesting how much money of mine these people want to hand out to those who've simply made poor choices. No one forced them to take that ARM.

[Julie]

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