Paulson: Plan Won't Stop All Foreclosures

In vigorous questioning from Senate Banking committee ranking member Richard Shelby (R-Ala.), Treasury Secretary Hank Paulson said the bailout plan will get at "the root cause of the problem" -- the housing crisis -- but not prevent all foreclosures.

"What's it going to do for the homeowner?" Shelby asked.

"Not every homeowner is going to be able to save their home," Paulson said. "Even in good times, there are many foreclosures -- some people can't afford to stay in their homes."

But for "everyone that can afford to stay in their home and wants to stay in their home, this will make financing available," Paulson said. "The lenders have got to keep lending."

Shelby also asked Paulson if the bailout will buy assets owned by foreign investors and asked Paulson how he could rationalize that to American taxpayers, who are paying for the bailout.

Paulson said, yes, U.S. taxpayers will buy foreign assets and that the practice is "very easy" to rationalize, given that "we have a global financial system" and to avoid doing so would put the taxpayer at risk.

-- Frank Ahrens

September 23, 2008; 12:01 PM ET  | Category:  business
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Comments

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Forget about the illegals who took mortgages. Let them take the hit for it but definately, help should be given to our citizens to keep them in their homes.

It's a NO BRAINER!

Posted by: roinct | September 23, 2008 12:05 PM

So, "for everyone that can afford to stay in their home and wants to stay in their home" lending will be available. Meaning: those who do NOT need rescuing will be permitted to continue those equity loans on the falling value of their homes?
Republicans want to rescue ONLY their cronies in the financial business. They want OUR money to rescue themselves. And, just a side note to them of course, they want the Congress and the Judicial branches of government nullified in the process with ALL power being concentrated in the hands of the Unitary Executive.

Posted by: cms1 | September 23, 2008 12:22 PM

I don't trust this as anything more than a scheme to empty the treasury before Obama gets there so he has nothing to work with and the rich are even richer. If the availability of credit is the issue, why can't the government direct lend? Why is the solution bailing out banks from their own bad decisions and bad judgment and further rewarding their CEOs? Let is crash. Let those burned realize where deregulation and privatization took them.

Posted by: espresso beans | September 23, 2008 12:46 PM

This is total BS. Let the foreign government buy up our mortgages if it is a global economy.

If this goes through it will be the end of our country. The dollar will be worthless.

Posted by: atomic | September 23, 2008 1:03 PM

I hope Paulson sticks to his guns on this. This is the insane part of Dodd's proposal. Yes, Wall Street and slimy mortgage brokers created and pimped the bad loans but these distressed homeowners signed on the dotted line. They should have known better. Bailing them out hurts other Americans.

Posted by: John | September 23, 2008 1:10 PM

Paulson's constant drumbeat of "protecting the interests of the US taxpayer" is getting really, REALLY annoying. He's going out of his way to connect bailing out Wall Street with continued lending to Americans in danger of their homes. If he really wanted to help Americans stay in their homes, he'd open up the treasury to 40y, fixed rate loans at 5% to anybody and everybody who wanted them. The idea that you have to pump billions of dollars into the bloated, failing banking system so that the "free market system" can survive is laughable.

Posted by: T. | September 23, 2008 1:37 PM

I hope Paulson sticks to his guns on this. This is the insane part of Dodd's proposal. Yes, Wall Street and slimy mortgage brokers created and pimped the bad loans but these distressed homeowners signed on the dotted line. They should have known better. Bailing them out hurts other Americans.

Posted by: John | September 23, 2008 1:10 PM

John, Wall Street also signed on the dotted line and they should have known better. Bailing them out hurts ALL America. Sorry....no money for you either!

Posted by: Larry | September 23, 2008 8:34 PM

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