Obama Will Not Back Moratorium on Home Foreclosures
Jan. 27 (EIRNS)In an interview with ABC's George Stephanopoulos today, the Chicago Board of Trade's Presidential candidate Barack Obama twice refused to endorse Sen. Hillary Clinton's call for a moratorium on home foreclosures and a freeze on mortgage interest rates. While Clinton's call falls short of the essential measures of LaRouche's Homeowners and Bank Protection Act (HBPA), it is a step in the right directionbut obviously it is the wrong direction for Obama and his controllers.
The relevant transcript follows:
STEPHANOPOULOS: Let's talk about the economy. The immediate economic crisis going forward right now, the housing crisis specifically. Senator Clinton has called on a 90-day freeze on home foreclosures, and freezing the rates for five years on adjustable rate mortgages. Is that a good idea?
OBAMA: Well, what I've said is that we should put forward a $10 billion fund to focus on helping families that are in their homes that have been induced into mortgages that they can't pay, but who are willing to pay the current rates that they have. And I think that is an approach that most observers recognize will prevent the kind of moral hazards where speculators or lenders who made bad loans somehow are bailed out. But I think that the problem goes beyond just the immediate crisis of home foreclosures....
STEPHANOPOULOS: But just to be clear on these specific ideas, you think that, by freezing home foreclosures for 90 days and freezing adjustable-rate mortgages for five years, that could create moral hazards; that's why you're not for it?
OBAMA: Well, I think it is important for us not to bail out lenders who made, in some cases, poorly considered or speculative loans. I think what is important is to make sure that people are staying in their homes, particularly first-time home buyers, families who are actually living in the house, as opposed to just flipping a condominium. And I think that we have to sort through how we can help those individuals aggressively, at the same time that we're not bailing out banks who made loans that they shouldn't have made.
It's not the first time. An Obama advisor told the Wall Street Journal, as reported on Jan. 11, that "a mandatory moratorium and rate freeze which could force lenders to hold loan interest rates below market levels could deter them from re-entering the market and would delay the return of liquidity." The advisor also raised the bogus argument, now being floated by Rohatyn-linked Congressmen like Barney Frank, that there would be "serious constitutional issues to consider from the government trying to directly change the terms of millions of mortgage contracts after the fact."