Pennsylvania Legislator Demands Federal Freeze on ARM Interest Rates, To Halt Foreclosures
Aug. 24, 2007 (EIRNS)The following release was issued yesterday by the Lyndon LaRouche Political Action Committee (LPAC).
"We are standing at the edge of a precipice," Pennsylvania state representative Peter J. Daley (D) declared on Aug. 17, referring to the subprime mortgage meltdown which is rippling through the entire economy. Daley demanded that "Congress pursue a nationwide freeze on interest rate increases for adjustable-rate mortgages," (ARMs) and called on "industry and the federal government" to wake up to this reality.
Daley, chairman of Pennsylvania's House Commerce Committee with oversight on all banking and financial services, including mortgage brokers, commented on proposed new banking regulations by the state's Banking Department which would require fuller disclosure of terms to borrowers. These are well and good, he said, "to minimize the number of families that get in trouble with their home loans." But, he insisted, "that's for the future. Something has to be done to salvage the current situation that the mortgage industry [sic] and Wall Streetand federal regulators have let get out of hand so badly." Daley will hold an informal field hearing Aug. 29 in Belle Vernon, Pa. on this.
Nationwide, July foreclosure filings increased 93% over July 2006. While Pennsylvania ranks 24th in numbers of foreclosures, the number of filings in the state jumped more than 32% from June to July of this year.
Pointing again to Wall Street and the Federal Reserve's culpability in this disaster, Daley said, "it looks like the Fed is letting the economy teach the mortgage companies and Wall Street a lesson, but the people caught in the crossfire are the families facing foreclosure and the small home builders...." Echoing LaRouche's Homeowners and Bank Protection Act of 2007, in part, Daley wants a congressional freeze on existing ARMs to "allow the state and federal governments to 'reset the clock' in the marketplace." He draws the obvious conclusion: "Current investors in loans frozen in place would lose a lot less ... than in a major collapse" of the economy.