Congress Moves $300 Billion Housing BailoutSubmitted by lynnopoly on Sat, 05/10/2008 - 14:28
More than 27,000 people have now signed the petition at AngryRenter.com, but Congress continues to ignore the protests against a housing bailout.
Yesterday, a key committee in the U.S. House of Representatives voted 46-21 to advance another housing bailout. The bill, known as the Dodd-Frank plan, would force taxpayers to guarantee over $300 billion (with a B) in mortgage refinancing. The bill would even extend taxpayer financing to people with bad credit who have stopped making mortgage payments.
So Congress will give six-figure loans to people who can't qualify for a credit card, courtesy of the American taxpayer.
That's a huge bailout for house flippers and speculators and, to some degree, their banks. There is a lot of downside risk in the housing markets, and Dodd-Frank ensures that taxpayers will be left holding the bag if housing prices continue to correct back to historical levels.
Even worse, it is thought that many delinquent mortgages were obtained by misrepresentation or fraud.
Many people lied to get loans they couldn't afford, and reckless banks foolishly provided the money. Ratings agencies blessed the deal and Wall Street packaged the shaky loans into risky, highly leveraged instruments that they sold around the world. That's the heart of the mess, and now that the house of cards has tumbled Congress is going to make honest taxpayers foot the bill—to the tune of more than $300,000,000,000 in new government loan guarantees.
Rep. Tom Price of Georgia says the bill represents "a dangerous bailout ideology ... (that) asks already-stretched taxpayers to insure the riskiest mortgages in the marketplace."
Congress plans to have votes on the Dodd-Frank bailout in the full House next week, with the goal of making it law before the November elections.
The Dodd-Frank bailout is on top of the recent stimulus bill, which dramatically expanded government-backed mortgages at the FHA and other institutions. Where will it end?
Meanwhile, this week, the Federal Reserve cut its key lending rate another .25 points. The Fed is taking this action to bailout insolvent banks and homeowners with ARM resets. However, as a result of the Fed's interest rate cuts, every American is paying more for gasoline and food as the dollar plunges in the global market.
That's right, the Federal Reserve is bailing out banks by printing more dollars, and is sticking American consumers with the bill. I went on CNN these to discuss these issues and our site AngryRenter.com with Glenn Beck—you can watch the video on YouTube.
Housing prices were a bubble, and reckless borrowers and irresponsible lenders should take responsibility for their actions. The vast majority of foreclosures are in just a few states. It's unfair to ask taxpayers, renters, and responsible homeowners across the country to pay for the mistakes of a few.
The raid on the U.S. Treasury and the U.S. dollar will only stop if our voices are heard in Washington, D.C.
Our "Angry Renter" petition now has 27,000 signatures and we have delivered copies to some Capitol Hill offices. There are lots of great comments on the site—the grassroots opposition to government housing bailouts is growing.
Can you help by telling your friends to also sign? Please also consider calling your Congressional Representative and Senators as well and tell them to oppose the Dodd-Frank bailout. Just call the U.S. Capitol Switchboard at (202) 224-3121 and ask for your senators' and/or representative's office and let them know your position against the Dodd-Frank bill and other housing bailout ideas.
Congress is only hearing from the Washington, D.C. special interests, and they need to understand that the majority of Americans oppose the housing bailout.
Thanks again for taking action to oppose a housing bailout in Congress.