Waters, Velazquez Hammer Paulson
Treasury Secretary Hank Paulson just got a double-barreled attack from Rep. Maxine Waters (D-Calif.) and Rep. Nydia Velazquez (D-N.Y.) during the House Financial Services committee hearing.
Their line of questioning: Why aren't you doing more to directly help homeowners pay their mortgages?
Waters had apparently gotten tired of hearing Paulson and other officials tout the Hope for Homeowners program, which is meant to help homeowners rework their mortgages. She told stories of constituents who tried to access the program, only to face poor service, unqualified workers and general frustration.
Velazquez then asked why, in light of all the action the feds have taken, all the money that Congress has authorized and all that has been spent: Why are foreclosures still rising?
Paulson said foreclosures happen for any number of reasons, including speculators walking away from homes.
"The question is, why are foreclosures taking place when homeowners want to stay in their homes and make an effort to stay in their homes and can afford to stay in their homes . . . ?" Paulson began.
Velazquez cut him off: "I am the one asking the questions here."
She then directed her fire at Fed Chairman Ben Bernanke, seated next to Paulson.
"How much of the more than $1 trillion spent has gone to prevent foreclosures?" she asked.
"Where do you get $1 trillion from?" Bernanke asked. After Velazquez stumbled a bit, Bernanke lectured: "We [the Fed] only lend money. We don't spend money."
Velazquez recovered and told Bernanke and Paulson that she supported the bailout package and "agonized" over the vote, and "the American people are still waiting for an answer as to how this is benefiting them."
Finally, Paulson said: "I hear your frustration and we're going to keep working on it."
Velazquez drew a deep sigh and said, "Yes, you hear my frustration and I hope you understand the pain and suffering of so many homeowners in this country that are losing their homes."
Finally, Velazquez set up Paulson against FDIC Chairwoman Shelia Bair, seated next to Paulson and Bernanke. Bair has focused on using bailout money directly for bailing out homeowners, a plan Paulson disagrees with. Not surprisingly, Bair is much more popular with lawmakers than Paulson.
"You said you are examining a strategy to prevent mortgage foreclosures," Velazquez told Paulson. "That means you don't have one. She does," Velazquez said, pointing to Bair, "are you willing to support her plan?"
Paulson endorsed the general principles of Bair's plan but stopped short of saying he would adopt it.
-- Frank Ahrens
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November 18, 2008; 11:44 AM ET
Categories: The Ticker | Tags: Paulson, foreclosure, mortgage workouts, troubled mortgages
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