Clinton: Protect Reputable Home Lenders
PHILADELPHIA — Democrat Hillary Rodham Clinton proposed several remedies to the nation's home mortgage problems Monday, including one tool more often associated with Republicans than Democrats.
The New York senator proposed greater protections for lenders from possible lawsuits by investors, a variation of so-called tort reform. For years, GOP leaders have called for restrictions on what they consider unwarranted lawsuits against businesses. Democrats often have resisted them on grounds they limit injured parties' legitimate rights to redress.
"Many mortgage companies are reluctant to help families restructure their mortgages because they're afraid of being sued by the investment banks, the private equity firms and others who actually own the mortgage papers," Clinton said in what she billed as a major address on the economy.
"This is the case even though writing down the value of a mortgage is often more profitable than foreclosing," she said. Clinton said she would offer legislation "to provide mortgage companies with protection against the threat of such lawsuits," but provided no further details.
Brian Deese, a Clinton economic adviser, said different categories of investors can have different interests in how a mortgage is handled. Clinton's legislation would clarify that a mortgage provider's obligations are to "investors as a whole," he said in an interview.
Clinton also called on President Bush to appoint "an emergency working group on foreclosures" to recommend new ways to confront housing finance troubles. She said the panel should be led by financial experts such as Robert Rubin, who was treasury secretary in her husband's administration, and former Federal Reserve chairmen Alan Greenspan and Paul Volcker.
Clinton and Sen. Barack Obama are campaigning heavily in Pennsylvania, which holds its presidential primary April 22 to allocate 158 delegates, the largest single prize left in the campaign season. Obama was scheduled to return to the state on Friday to begin a six-day bus tour.
Clinton said she supports pending legislation to establish an auction system for hundreds of thousands mortgages in default. Under the plan, drafted by Democratic lawmakers, lenders "could sell mortgages in bulk to banks and other buyers," Clinton said, who in turn would "restructure them to make them affordable for families, because they know the government will guarantee them once they're reworked."
The Federal Housing Administration, she said, "should also stand ready to be a temporary buyer to purchase, restructure, and resell underwater mortgages" if the auction plan falls short.
Clinton said a recently enacted $168 billion stimulus package "did next to nothing to help homeowners and communities struggling with foreclosure."
"If the Fed can extend $30 billion to help Bear Stearns address their financial crisis," she said, "the federal government should provide at least that much emergency help to families and communities address theirs."
Clinton's remarks built on earlier proposals on the housing issue. Last week she called for a new stimulus package to include $30 billion to help state and local governments buy foreclosed properties, restructure mortgages and undertake "anti-blight programs."
Clinton also has called for a five-year freeze on interest rates for all subprime mortgages, which often go to borrowers with poor credit ratings.
Obama was not campaigning Monday. His campaign manager, David Plouffe, said in phone call with reporters that Clinton is "the prohibitive favorite" in Pennsylvania. Obama, he said, would try to do "as well as we can there."
At a rally Monday night in Uniontown, Clinton was introduced by Pennsylvania Gov. Ed Rendell and Rep. John Murtha, D-Pa., a prominent critic of the Iraq war. Murtha touted Clinton's time as first lady. "Anybody that's been in the White House for eight years knows how tough it is, understands and has the experience that you need in order to be president of the United States," he said.
Earlier Monday, Clinton held a rally in Blue Bell, geared especially to women. She said the Bush administration and its Supreme Court appointees have hurt women financially.
"It's pretty well accepted that, still, women are not paid equally with men for doing the same jobs in America," Clinton said to loud cheers. If elected president, she said, "we're going to finally have equal pay for equal work."
Clinton criticized Obama's health insurance plan, saying it would not cover all Americans. Later, however, she seemed to suggest that she and Obama would fare about the same in November, a comment at odds with her campaign's claim that she is far likelier than Obama to defeat Republican John McCain.
Responding to a question about Democratic divisions, Clinton said McCain would do little to change President Bush's policies. She continued: "So I think that people who would be voting for either me or Senator Obama are going to ask themselves, 'Wait a minute, there are really big differences between the Democrats and the Republicans, and let's have a unified party and elect a Democratic president.'"
The crowd of several hundred roared its approval.
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CHARLES BABINGTON | 03/24/08 10:43 PM |