For Immediate Release
Kucinich: Bailout Plan Will Fail to Keep Families in Their Homes
WASHINGTON - Congressman Dennis Kucinich (D-OH) today sent the following letter to all members of the House of Representatives:
Bailout Plan Will Fail to Keep Families in Their Homes:
Treasury will own troubled assets without any control
Terms of bad mortgages cannot be changed absent controlling share of underlying securities
If you are tempted to vote for this legislation because you think it will keep people in their homes, think again: in fact, Treasury will not be able to change the terms of bad mortgages because the Act does not require Treasury to purchase a controlling share in the underlying mortgage backed securities and collateralized debt obligations. The Secretary will be powerless to make any real and substantive change in the terms of mortgage. The Secretary will have NO power to avoid foreclosures and keep families in their homes.
I commend to your attention a letter I received last night from Frank Alexander, Professor of Law at Emory University. Professor Alexander testified before my Subcommittee on Domestic Policy on targeting federal assistance to help neighborhoods affected by the foreclosure crisis. He is an expert on housing law and community development.
Professor Alexander clearly demonstrates that the Emergency Economic Stabilization Act will not fulfill its stated goal of preserving homeownership. Unless the Secretary of the Treasury is required to prioritize assets that will give the Treasury a controlling share in the underlying whole mortgage, the Secretary will hold bad assets with no power to make them solid again.
Because the rule prohibits amendments, and we do not have the opportunity to correct this terrible oversight, I must encourage you to oppose this bill so that it can be reworked and the oversight addressed. To be sure, the recent past has taught us the valuable lesson that action in haste can be more destructive than delayed action.
Dennis J. Kucinich
Member of Congress