How ironic is it that the banks are the ones that are finally imposing a moratorium on foreclosures, rather than the Obama Administration.
On Friday, Bank of America announced that it was halting its foreclosures in all fifty states amid a scandal over whether it and other banks had been using proper documentation in foreclosure proceedings.
JP Morgan Chase and Ally Financial also have halted foreclosures, at least in the 23 states that require a judge to sign off on the deals.
The attorney general in one state after another is looking into possible fraudulent foreclosures.
But all the while Obama Administration still resists backing a moratorium.
On Sunday David Axelrod went on Face the Nation to dismiss the idea again.
But the moratorium always was and is a good idea. Hillary Clinton, by the way, proposed it during the 2008 campaign. It would put a floor on the falling housing market, and most importantly, it would allow several million people to stay in their homes and have a little breathing room.
Obama himself could have negotiated this moratorium when the bankers came crawling to Washington desperate for our bailout money. He could have made it a condition: They could get the bailout money only if they agreed not to foreclose on anyone for at least a year. (Or he could have forced them to reduce the principal on all their mortgages by 25 percent or 30 percent.)
But Obama chose to do nothing. He took the bad advice of Larry Summers and Timothy Geithner, according to Jonathan Alter in The Promise: President Obama, Year one. “Summers and Geithner opposed attaching big strings to bailouts. They thought it wrong to kick banks when they were down.”
Obama himself reached out to the banks. “President Obama told executives at the time that his Administration was the bulwark between their industry and the public’s anger,” the New York Times reports today.
Obama is still pitying the big banks, and not their victims. He is still running interference for the banks, rather than helping those who need it most.
And right now, he seems more concerned with helping the vultures who want to come in and scoop up the foreclosed homes at bargain basement prices than with the people who are desperate to stay in those homes. The Secretary of Housing and Urban Development, Shaun Donovan, told the Times that the Administration doesn’t want to “hurt individual buyers” who are waiting to buy foreclosed homes.
Until the Obama Administration starts siding with the foreclosed upon and not the unscrupulous lenders and the new speculative buyers, millions of people will continue to suffer needlessly and the economy will keep losing steam.
If you liked this story by Matthew Rothschild, the editor of The Progressive magazine, check out his article "Obama Late to Worry about Left."
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