On the Rachel Maddow show last night:
MADDOW: “You can tell just by looking around that the foreclosure crisis is NOT over. The main street side of the bail-out? Hmmmph.
[…] “Did I get that roughly right? TARP was supposed to be trying to stop foreclosures at the same time that it bailed out the banks – bailing out the banks basically worked, but the foreclosures part really didn’t?”
WARREN: “Actually, if you read the statute, what the statue talks about is not bailing out Wall Street banks. What the statue talks about is ‘here is $700 Billion to help repair the economy – remember, it was supposed to be about troubled assets, mortgages, that were in trouble – and it says, Congress says, the way we are going to measure the effectiveness of this program is what it does for unemployment, what it does for American savings, and really focus on what it does on home mortgage foreclosures, how it works to stop this crisis. That’s what Congress said it wanted for it’s $700 billion.”
MADDOW: “So that’s been your job, as chair of the Congressional oversight panels, is to monitor, essentially, what it’s doing for unemployment, and American savings and foreclosures. And the result is not positive.”
WARREN: “Well, we are now fifteen months, after Treasury has announced its program, and tried to get it up and running, and basically 167,000 families have gotten into some kind of modification that we hope will turn out to be permanent, although there are gonna be some problems with that down the line.
But just to put that in some context, every single month, 200,000 families are posted for foreclosure. That’s where we stand right now – 167,000 over 15 months have received assistance under this program, and every month, 200,000 are posted for foreclosure.”
[…] WARREN: “Well, we raised this issue when the program was first announced. We said we had problems about the scope of the program, problems about the scalability of the program, and problems with whether or not it was going to create permanent solutions. But let me say it in a slightly different way: In a sense, what this program was is incentives put on the table to invite the financial institutions and the mortgage servicers to come to the table, please, to negotiate with the families who are facing foreclosure, and it is a program of limited scope and it is a gentle program.
And today, we heard from those large Wall Street banks. They went in to Congress to testify about where they stood on mortgage foreclosures, and they basically said: “Don’t push us too hard, because we don’t plan to cooperate.’
I mean, this is really a STUNNING response from large financial institutions. So, we just have a real disconnect here about what it is that TARP is supposed to be, or at least originally, was supposed to be about.”
[…] WARREN: “This is about the group of people, who could actually pay, and pay a reasonable amount on these mortgages, and everyone would ultimately be better off. But it’s also about the rest of us in the economy. You know, even if you are not one of the 1 in 4 homeowners with a mortgage who’s underwater, the value of your home is dropping when mortgage foreclosures keep occurring. It presses everybody’s values down. And that has echoes throughout the economy. A huge part of our economy is the construction industry, which has ground to a halt and has huge unemployment in it right now. It has devastating effects on communities. Ultimately, we are going to have a very difficult time restarting our economy if we continue a downward spiral on home values because of the downward pressure with mortgage foreclosures.
A year and half ago, we bailed out large financial institutions on the argument that, you know, like it or not, we are all in the same boat economically, and we need to save those guys, and we did it, and they are now back to profitability, spending bonuses.
But now we turn to the homeowners, the people who are also in real trouble and it’s having a real effect on the rest of our economy, and the response seems to be ‘well, we’re not all in the same boat here…’
[…] WARREN: This is a problem we MUST fix.”