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
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