Hank to Homeowners: Drop Dead

[seafan]

Hank to Homeowners: Drop Dead

By Andrew Jakabovics
November 13, 2008



Treasury Secretary Henry Paulson stated yesterday he will not purchase mortgage-related assets under the Troubled Asset Relief Program, which is ironically the premise behind granting the program's money in the first place. AP/Gerald Herbert

Treasury Secretary “Hank” Paulson yesterday made it absolutely clear that he had no intention of using the authority granted to him by Congress under the $700 billion Troubled Asset Relief Program, or TARP, to purchase troubled mortgage-related assets or to provide relief to struggling homeowners facing foreclosures. The message was clear to homeowners facing foreclosure and their neighbors watching the value of their homes plummet—drop dead.

Having already spent $250 billion to recapitalize banks with no strings attached and an additional $40 billion to restructure and sweeten the now $150 billion bailout of U.S. insurance giant American International Group Inc., there remains only $60 billion available to Treasury to spend before having to go back to Congress to request the second $350 billion tranche appropriated by Congress for TARP. But Paulson told Congress none of that money will be used to purchase mortgage-related assets—despite that being the premise under which the staggering sums of money were granted.

Paulson was quite open in his about-face: “In crafting the financial rescue package, we and the Congress agreed that Treasury would use its leverage as a major purchaser of troubled mortgages to work with servicers and achieve more aggressive mortgage modification standards. Now that we are not planning to purchase illiquid mortgage assets, we must find another way to meet that commitment.”

Translation: Having foreclosed making an investment in mortgages for the purpose of restructuring them, we now need to scramble to find an alternative.

.....

Let’s cut to the heart of the anything-but-mortgages approach. Paulson wants to help the auto lenders, education lenders, and credit card issuers, all of whom are suffering from the same sort of liquidity crisis that froze interbank lending earlier this year. Leaving aside the auto lenders (despite nearly doubling interest rates for new car loans between July and September, dollar volume fell less than 8 percent) and the education lenders (the Department of Education has already stepped in to lend directly to students and announced last week it will purchase securitized student loans going back to 2003), there are three main problems with the credit card securities plan.

.....

Paulson should be stopped in his tracks. Congress needs to halt this program immediately, and restructure it to focus on home mortgages, as many of us screamed to no avail.

What Paulson and Bush are doing is the last heist before they waltz out of office. It is exactly what they intended to pull off in their final days.

[RUMMYisFROSTED]

1. Paulson should be put in jail.

[thraxis]

2. Agreed. This is an insult to the taxpayers whose money is being used. nt

[lostnotforgotten]

3. Remember All the DUers Crying Wolf That The Bailout Was Mandatory

Where are they now - Crying over spilled milk?

[MineralMan]

4. And after they're out of office

they'll have nice spots on Boards of Directors waiting for them at the same companies they're pimping for. Just watch. No work...just money.

Buncha crooks! Some folks just need a nice prison sentence.