Sen Clinton's Response to Bush Foreclosure Plan

“Throughout the foreclosure crisis President Bush has ignored the cries for help. Today he responded, but once again it's too little, too late. President Bush's plan takes the heat off the mortgage industry but leaves homeowners to sink.

“The Bush plan is designed to help as few homeowners as possible. Lenders will decide on a case-by-case basis whether a homeowner gets the rate freeze or whether she should pay the 30 to 40 percent monthly increase. These are the same lenders who made the case-by-case decisions that sum to the prospect of 2 million foreclosures. The President knows that a case-by-case approach cannot work. The case-by-case approach has resulted in only 1% of subprime loans being modified this year, and 1.8 million foreclosure notices being sent out. As recently as a few weeks ago the Treasury Secretary himself said that the case-by-case approach was inadequate. There are other crippling shortcomings. The Bush plan excludes homeowners whose mortgages reset prior to January 2008. This may sound reasonable, but it is intentionally designed to leave out the roughly 400,000 families whose mortgages are resetting this quarter. Under the Bush plan, these families will continue to experience rate resets every six months.

“America needs a plan that matches the scale of the crisis, and President Bush has failed to deliver it. But that is what happens when you are more interested in protecting corporate interests than struggling families.

“I have announced a comprehensive plan that will actually end the foreclosure crisis. My plan imposes an immediate moratorium on foreclosures; an automatic, across-the-board rate freeze; and the requirement that servicers and lenders provide status reports on how many mortgages they are converting from designed-to-fail to designed-to-work. The foreclosure moratorium ensures that families will not lose their homes while servicers put the systems in place to implement the rate freeze as well as the large-scale modification of loans. And the automatic, across-the-board rate freeze will ensure that hundreds of thousands of families, rather than just a few, will be spared the foreclosure process.

“I call on the mortgage industry and Wall Street to go back to the drawing board, and to do so with a commitment to helping families and not just themselves. A voluntary agreement that fixes this problem is possible. But if the mortgage industry and Wall Street will not shoulder their responsibility, then I will consider legislation to protect servicers and others who do the right thing by modifying loans to help families save their homes, help investors avoid losses, and help the economy.”

The detailed Clinton Plan is available at .