White House Threatens To Veto Bill On Foreclosures
A senate bill targeting prevention of foreclosures has come under attack from the White House for being a bailout scheme benefiting lenders and speculators. In fact the President might use veto powers to stall it.
The bill aims to allow bankruptcy judges to wipe out mortgage dues and provide billions for redoing abandoned properties. The Democrat led Senate is scheduled to discuss and pass the bill. But due to Iraq issues the measure has been postponed. This ‘Foreclosure Prevention Act’ is laced with multi layers that will attract criticism and support from both sides.
The plan to allow local housing agencies refinance wobbly loans by the issuing of bonds that are free from taxes is supported generally by the Bush administration. The issue about permitting bankruptcy judges to play around with house loans is resented by the mortgage industry as well as many Republicans. Lenders feel that by touching bankruptcy laws, borrowing costs would be pushed up. To guard themselves against bankruptcy the lenders will tend to hike up their charges. It will further muddle the market and pass on the costs to consumers at a point of time when just the reverse action should be taken, commented David Kittle, speaking for the Mortgage Bankers Association. The Democrats argue that the comprehensive plan was the right dose of medicine for the foreclosure malaise hitting right across the nation and spilling over to international markets. But White House said that the price was too heavy and would not meet the requirements of those in need – the besieged borrowers.
The increasing number of foreclosed houses going up for auction sales has hit the once zooming real estate markets in Florida, California, the Southwest and Midwest. Many areas are plagued with job losses aggravating the situation. The Democrats envisaged the bill to help the localities where foreclosures were the most affected. It is a big question whether the Republicans in the Senate will continue to be docile to Presidential orders or think about the welfare of the states they represent.
While arguments are thrown back and forth the nation suffers pockmarked with abandoned houses. Not only the borrowers but the renters too suffer – being abruptly evicted for not knowing that the house was foreclosed. Landlords vanished with security money leaving the renters high and dry. Hapless deserted pets are facing the consequences of man’s reckless unplanned behaviour.
