Agreement Reached; Republican Leaders Successfully Block Plan to Help Keep People In Their Homes
Shawn Dixon September 28th, 2008
It appears that congressional leaders have agreed on a historic $700 billion bailout for Wall Street that noticeably lacks any provisions to help folks struggling with mortgages stay in their homes. Republican leaders, in final negotiations, blocked the Democrats attempt to allow bankruptcy judges the leniency necessary to help those who have defaulted devise a payment plan to get back on track.
It’s really unthinkable to me that Republicans leaders under Mitch McConnell’s leadership are willing to give nearly a trillion dollars to Wall Street while fighting against protections for the people among us who need it most.
What a shame.
- Mitch McConnell
- Comments(4)
Dow Plunges 600 as House Defeats Bailout Plan- AP
Fear swept across the financial markets Monday, sending the Dow Jones industrials down as much as 705 points, as the financial bailout package was defeated by the House. As the vote was shown on TV, stocks plunged and and investors fled to the safety of the credit markets, worrying that the financial system would keep sinking under the weight of failed mortgage debt…. »
Maybe the fucking golden parachutes did it in?
Goodbye 401K, hello bread lines !
Shawn,
As a community banker in Western Ky for 36 years, let me attempt to explain something to you. Giving the bankruptcy court the legal right to change the terms of a mortgage loan would be the biggest mistake you can imagine. You have no idea what the ramifications of that can be. Let’s take it to a simpler example. You loan me $100,000 dollars to go to law school but because I made a bad decision about the law school I chose to attend and the law school lied to me, Matt Gunterman from Yale comes along and tells you I only have to pay you back $20,000.00. How’s that working for you so far? Multiply your loss by billions and tell me how you intend to stay in business. The truth of the matter of the mortgage crisis is the majority of the sub-prime mortgages were not made by “normal” banks. Rather they were made by mortgage brokers and sold to FNMA/FHLMC. Unfortunately, the guys like Countrywide were whores to the whole thing and I hope they all go to prison for the rest of their lives.
Real world answer to what Congress is trying to do is very simple. This is not a bailout of Wall Street. It is not Wall Street vs. Main Street. Trust me when I tell you this is truly an injection to the very life of the American economy. From the very top to the very bottom. If it is not resolved very soon and I mean within the next few days, you cannot fathom what will happen. Main Street will take a much bigger hit than Wall Street. When payroll checks for a blue collar worker can’t be cashed, when community banks can’t make a car loan or a standard home loan, who will you then blame? You have no reason to believe me. I totally understand that.
But then again, what do I know? I’m just one guy out here who has worked in the community banking community for the last 36 years. Don’t take my word for it. Ask your dad or your grandfather. We can all agree to place blame for this mess later. We need to stop this before it gets any worse.
If we in the United States don’t stop exporting the manufacturing base of our economy and handing billions of dollars to foreign countries, the bailout won’t make any difference anyway. Mitch McConnell has already shown that he cares more about the “developing economies” of India and China than he does the United States. George Bush, Henry Paulson, and Ben Bernanke feel the same way. We need to take care of the United States FIRST and provide jobs for the American people rather than China and India.
Larry,
I appreciate your contribution to the dialogue. Where in Western, KY are you from? I too am from Western, KY.
Let me start to address your point by saying that I am not fundamentally opposed to the bailout. Like you, I think the ramifications of failure of the bill will be widespread and the consequences will be felt everywhere and I don’t think we can afford that.
My point in writing this was this:
There are two actors in this scenario: those who can’t afford there mortgages and those who provided them those mortgages. Those people who can’t afford their mortgages have already paid with their homes. Wall Street has not paid for their pad investment and predatory lending.
At this point, a bailout that doesn’t attempt to keep people in their homes would be double dipping from those in society who can least afford it. Not only have they lost their homes, but their tax dollars and their children’s tax dollars will be used to bailout Wall Street for Wall Street’s bad investment who will be off the hook and pay nothing. That’s an unacceptable solution that borders on immoral.
With regards to giving bankruptcy judges leniency, I’m not saying that’s the only way to keep people in their homes, but it was the only plan proposed.
I think you and I both agree that something has to be done and I appreciate your insight as a person in the industry. I hope you’ll continue to add to our dialogue here.