Presidential Candidates Call for Government to Rescue Homeowners

Dallas Morning News (04/28/08); Michaels, Dave
In response to falling home prices and soaring mortgage default rates in numerous states, the presidential candidates are touting homeowner rescue plans that call for increased involvement by the federal government. Sen. Hillary Rodham Clinton, D-N.Y., wants lenders to voluntarily institute 90-day moratoriums on foreclosures to ensure plenty of time for loan modifications or workouts; and both she and Sen. Barack Obama, D-Ill., support a proposal from House Financial Services Committee Chairman Barney Frank, D-Mass., that calls for lenders to lower mortgage balances by 15 percent so that struggling borrowers could refinance into FHA loans. Meanwhile, Sen. John McCain, R-Ariz., has proposed a refinancing plan to help as many as 400,000 homeowners. As for the foreclosure moratorium proposals, mortgage industry representatives insist they would boost fees charged to borrowers and delay inevitable foreclosures. According to Mortgage Bankers Association Chairman-Elect David Kittle, CMB, "An efficient foreclosure process actually benefits the borrower by stopping debt from continuing to accrue and giving the borrower a reasonably clean break from a mortgage loan he or she cannot afford."