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Yesterday, while walking around the Congressional Black Caucus Foundation’s Annual Legislative Conference, I ran into Rep. Maxine Waters. At the time, no one really knew if the House had come to an agreement on the $700 billion bailout to safeguard our economy. Below is the update that Waters provided:
Rep. Maxine Waters (D-CA) on the bailout:
The latest update that I have on the negotiations of the bailout are such that we are at a standstill. Yesterday we thought that we had an agreement in principal between the Democrats, the Republicans, the President and the presidential candidates. But it turns out that the Republicans came in with a completely new proposal. One that no body had seen and was quite different from everything everybody had been talking about. So it seems to me that there was going to have to be some leadership today to get them back on track.
I think most people who are in the negotiations would like to see some help for homeowners so that these homeowners who had risk for foreclosures could get loan modifications and stay in their homes.
There is a lot of discussion and confrontation around bankruptcy. That seems to be the toughest part of this negotiation. Of course there is something in there to help minority banks and business people be apart of all of this asset management that is going to be created as a result of the government taking over and buying up some of these toxic products. I think most people believe that the government needs to do something but it is a matter of what is that something going to be.
The lending community is adamantly opposed to bankruptcy and the home being apart of bankruptcy procedures. They believe that if judges have the ability to write down the mortgage once they have loaned a person money and that person gets in trouble and they file for bankruptcy then they the lenders will lose billions of dollars. I like the idea of homeowners being able to put their home into bankruptcy proceedings. I doubt if it will happen but I support it.
It all depends on how you do it. The whole idea is that you are paying the banks. If they hold paper on a home mortgage and the government buys if from them and then writes it down, you are bailing out the banks and you’re helping the homeowners. That is the basis of the bailout.
Marcia A. Wade is the interactive reporter at BlackEnterprise.com