Republicans Want Low-Income Renters to Pay for Mortgage Bailout

Posted by Lindsay Beyerstein, Majikthise at 7:01 AM on May 19, 2008.

Reverse Robin Hood GOP wants the poor to pay for the mistakes of the rich.

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The Republican ranking member from the Senate Banking, Housing, and Urban Affairs Committee wants to pay for Chris Dodd's mortgage bailout program out of a trust fund for housing the poorest of the poor, according to the National Coalition for Low Income Housing:

WASHINGTON, DC - Responding to pressure from Ranking Member Senator Richard Shelby (R-AL), the Senate Banking, Housing, and Urban Affairs Committee appears to be on the verge of diverting funds designated for a housing trust fund for housing for the poorest Americans to pay for Committee Chairman Christopher Dodd’s (D-CT) new program to refinance homeowners facing foreclosure.

In his bill “The Federal Housing Finance Regulatory Reform Act of 2008,” Chairman Dodd proposes to allow the Federal Housing Administration to insure refinanced mortgages of homeowners who face foreclosure. The Congressional Budget Office estimates this new program creates a potential liability for the federal government of $1.7 billion.

Reports are that Senator Shelby will only agree to the new FHA program if it is paid for by non-taxpayer funds. Senator Dodd’s bill also creates a housing trust fund with resources from Fannie Mae and Freddie Mac to build or preserve rental housing for extremely low and very low income people. Senator Shelby wants those funds to be used to pay for the new FHA program instead. [NCLIH]

Bailing out mortgage-holders sounds progressive until you realize that you're also bailing out the irresponsible lenders who caused the problem in the first place. They're just going to do it again, knowing that the state will pay them, even if their customers can't.

"Too big to fail" is a nice way of saying "corporate welfare."

Taking the money from the poorest of the poor to bail out sub-prime sharks and their customers is just perverse.

Tagged as: house, gop, dodd, foreclosures, mortgage crisis

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What I love... [Report this comment] Posted by: JoshuaLudd on May 19, 2008 9:27 AM Current rating: 5 [1 = poor; 5 = excellent] .. is hearing about how this is all the fault of borrowers who took out loans they couldn't pay... not the banking professionals who came up with NINA loans and other forms of adjustable rate loans AND who approved those loans to these people who in the end couldn't pay. [« Reply to this comment] [Post a new comment »] [Rate this comment: 1 - 2 - 3 - 4 - 5] YA KNOW [Report this comment] Posted by: crazy carlos on May 20, 2008 7:10 AM Current rating: 5 [1 = poor; 5 = excellent] It is now long overdue to start introducing some of these law makers to the subtle naunces of ropes and lamposts. I figure it would take about 10 or so for the message to be grasped. Some of these southern good ole boys ought to pick it up kinda quick; part of their heritage. Crazy Carlos [« Reply to this comment] [Post a new comment »] [Rate this comment: 1 - 2 - 3 - 4 - 5] I wonder... [Report this comment] Posted by: Quannah on May 20, 2008 10:46 AM Current rating: Not yet rated [1 = poor; 5 = excellent] if the Banking Committee, Sen. Shelby in particular, knows that the forclosure nightmare is already screwing low-income renters? I know of several people, low-to-moderate income people, families, who paid their rent every month on time, good tenants, who were summarily evicted from homes being foreclosed on. Just because they paid their rent didn't mean the owners paid their mortgage with the money collected! There are good people being put out on the street... and they get no refund of rent already paid, or deposits. They get evicted. These assholes need to realize that everything can't be put onto the backs of low-to-moderate income working Americans any longer, let alone the poor. The burden has become way too great for many to bear. [« Reply to this comment] [Post a new comment »] [Rate this comment: 1 - 2 - 3 - 4 - 5] Big Business [Report this comment] Posted by: indepentent on Jun 5, 2008 9:37 AM Current rating: Not yet rated [1 = poor; 5 = excellent] banks, morgtage companies etc should be the ones who pay for this. Maybe Cheney could throw a few of his Billions in the to help. [« Reply to this comment] [Post a new comment »] [Rate this comment: 1 - 2 - 3 - 4 - 5]

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