Senator Hillary Clinton proposed a new solution to the mortgage crisis today, calling for both an interest rate freeze and a foreclosure moratorium.
In a letter to Treasury Secretary Henry Paulson, Clinton outlined her plan, saying, “It is critical that we address this crisis.”
“The administration and the mortgage industry must reach agreement that matches the scale of the problem. If you produce an inadequate agreement, or fail outright, the cost to our economy will be incalculable.”
Clinton noted that she would push for legislation to allow mortgage lenders to convert subprime mortgages without the permission of investors if the Bush administration failed to come up with an adequate plan to tackle the crisis and help stave off foreclosure.
The presidential hopeful proposed a minimum 90-day foreclosure moratorium on owner-occupied homes tied to subprime loans, and called for an interest rate freeze on adjustable-rate mortgages for at least five years or until the loan is able to be converted to a fixed-rate mortgage.
Clinton also called upon the mortgage industry to furnish regular reports detailing the number of mortgages that have been successfully modified.
As part of her proposal, she requested a $5 billion fund to help harder-hit communities that are riddled with mounting foreclosures deal with the ongoing housing crisis.
Interestingly, the mortgage crisis has affected some states more than others, including key states in next year’s election such as Ohio, Florida, Michigan, and Nevada.
Look forward to similar proposals from the numerous other presidential hopefuls in coming weeks.