Wall Street Journal (03/25/08) P. A4; Chozick, Amy; Timiraos, Nick
As part of her presidential campaign, Sen. Hillary Clinton, D-N.Y., has been pushing for the federal government to take a more aggressive stance to reduce foreclosures and ease the mortgage crisis. On March 24, she rolled out a four-part plan that supports a federal mortgage auction system under legislation proposed by Rep. Barney Frank, D-Mass., and Sen. Christopher Dodd, D-Conn.; but she goes further by calling for the FHA to supplement the auction plan by purchasing problem mortgages as necessary. Clinton's proposal also calls for enhanced protection for mortgage servicers from investor lawsuits as a way to bolster loan restructuring efforts, a $30 billion initiative to eliminate blight by permitting cities and states to snap up foreclosed homes and a nonpartisan housing panel, with members including former Federal Reserve chairman Alan Greenspan and former Treasury secretary Robert Rubin. However, there are concerns about the portion of the plan calling for the FHA to purchase, restructure and resell mortgages whose balances exceed the home's value, with critics insisting that the risks to taxpayers is too great.
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