While many of you were reading the morning blogs, Treasury Secretary Henry Paulson was up on Capitol Hill, trying to sell his “teaser freezer” planto House Republicans.
He didn’t give a lot more details than we already know, but the common leakage out there is that it will be a five year freeze on subprime mortgages only for those who can currently pay their mortgages but can’t when the rate resets. How they’re going to determine who falls into that category is anyone’s guess.
I was surprised by some of the Republican response, not surprised by the bulk of it. Rep. Spencer Bachus (R-AL) told a colleague of mine at the mother ship, NBC News, that he hasn’t made up his mind on the plan, but he calls it a “bailout.” And then he said that the time to address trouble with mortgages is before they’re written. Ok, well, but that doesn’t really help us out now, now does it?
Rep. Eric Cantor (R-VA) told me that Mr. Paulson said the plan would be entirely voluntary for the lenders, servicers, etc. Other than that he said there were few details.
Interesting was the comment from Rep. John Boehner (R-OH), the Minority Leader, who said, “I think that the disruption that goes on in American families, the disruption that goes on in American neighborhoods and communities, is significant under that scenario, where you’re allowing the whole financial area to collapse and to throw it into the court system. To the extent that lenders will work with mortgage holders, to modify those where they can, to help them stay in the home, it helps the family, it helps the lender, and frankly it helps the economy.”
I have to say I haven’t heard much from the Republicans on helping the homeowners up to now. I wonder what’s softening the stance? Could it be the 2008 elections? Hmmmm.