'People Are Outraged' Over Banking Situation
Mortgage help for homeowners is coming, says Rep. Barney Frank
House Financial Services Committee Chairman Barney Frank is warning banks eager for TARP II money that the public doesn't support the bailout and that Congress is not likely to OK spending the second half of the $700 billion package until Wall Street changes its ways. Frank said the treasury will soon announce a major plan to help troubled homeowners avoid foreclosures by, in some cases, reducing mortgage payments.
In a breakfast round table with reporters, Frank said that the public is angry that the banks haven't started to lend more money. He said that people are also mad at CEO pay, purchases of executive jets, and even stadium naming rights. While he said that it is inevitable that some bankers will be rewarded with TARP funds, it is the responsibility of banks and financial institutions receiving the money to win the public's support.
"People are outraged," said Frank, who strongly backs CEO pay caps and has indicated support for limiting lobbying expenses by the institutions.
He warned that until the public turns around to support spending TARP II money, none will be approved by Congress. "I am confident you won't see that going forward," he told reporters. In the meantime, he said, Congress will start drawing up legislation to regulate and punish the industry, starting with pay caps. He said the legislation should be ready by summer.
On the housing crisis, Frank said he anticipates that the awaited treasury measures will include a $50 billion plan that will cut house payments to a level that people can afford. Frank, who discussed mortgage issues at a dinner with Treasury Secretary Timothy Geithner and others this week, said that the goal of the program will be to help those in troubled mortgages stay in their houses. One plan to cut the loan principal to what owners can afford will very likely include a payment-to-income ratio that homeowners will have to meet. Franks indicated that those in troubled mortgages will have to pay a minimum of 31 percent of their income for house payments. He didn't give many details on the plan to help with foreclosures but put a price tag on it of $50 billion.
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Reader Comments
Investigate Barney Frank
I'm a Massachusetts residence who has to put up with Barney Frank's non sense over the years. This clown needs to be investigated for his actions for the mortgage meltdown rather then allowing him to deflect the blame and appear as the white and shining armour who is here to help those who are suffering.
People of Newton and Brookline Ma, Wakeup!!! I don't understand why you voted Barney back into the senate this fall.
The people's bail-out
I would love for us, the people, to have been bailed out of our debt. That would truly stimulate the economy once we are debt free. That creates responsible* consumer spending, more cash flow coming in to the people's pockets, lifting fear and uncertainty from all Americans. Can you imagine the stock market once knowing that consumers (the force that drives the economy) are free of debt and ready to spend again?
*Responsible consumer spending: Now that we are debt free (if the case), I for one, will never want to be in debt again; therefore, us that have experienced (and are experiencing) debt, due to situations that are out of our control; we be responsible in out spending, but at the same time will spend, stimulating the economy.
Mad at Barney Frank
Barney's too happy to deflect blame away rightfully reserved for himself. For years he coerced the industry to make bad loans. His abuse of power, conflict of interest and fiduciary malfeasance is beyond comparison. Following on the heels of his bad judgment and bad behavior we have the banks, the borrowers, Fannie, Freddie and Wall St following Barney's example and trying to deflect their CONSEQUENTIAL guilt. Yes, we Americans are outraged, but some of us are savvy enough to know that the slimy Barney Frank started this snow ball long before 2007.
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