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User Info	Clinton to Call for Freeze on Foreclosures; entered at 2007-12-02 19:59:05
Daizepitt Posts: 2157 Registered: 2007-10-07 Orange County, CA	By CHRISTOPHER COOPER December 2, 2007 6:30 p.m. WASHINGTON -- In a sign that the housing crunch is increasingly resonating on the campaign trail, Sen. Hillary Clinton is expected to call Monday for a 90-day moratorium on home foreclosures, as well as a five-year freeze on the rates of adjustable mortgages -- an idea the Bush administration is already considering. The Democratic presidential frontrunner's move signals a likely priority shift for political candidates, from one dominated by foreign affairs and domestic issues such as health insurance to one that more directly addresses the economic health of individual Americans. High oil prices, plummeting home values and an increasingly volatile stock market are making consumers nervous, and a credit crunch has them fretting about their personal liquidity. "I think it's inevitable" that the political conversation will turn more sharply toward economic issues, as the campaigns move into 2008, Mrs. Clinton said in an interview. "There's just too many factors converging here." Up to now, though, most of the rhetoric regarding subprime loans and skyrocketing foreclosure rates have come from the Democratic candidates. Former North Carolina Sen. John Edwards has been at the vanguard of the political conversation, proposing early on that bankruptcy laws be loosened to make it easier for homeowners to seek protection from creditors, that mortgage and credit card companies be more tightly regulated to ensure they aren't gouging consumers and that public money be used to help out homeowners who are in danger of losing their houses. Mrs. Clinton has made similar calls for reform as well; in August, she called for legislation banning prepayment penalty riders on mortgage products and to disclose more details about broker commissions. But the plan she is about to announce is striking on two levels. Calling as it does for a 90-day moratorium on foreclosures and a five-year freeze on interest rate adjustments for existing mortgages, the Clinton plan goes further than those of her colleagues. More striking is that the centerpiece of her proposal -- a freeze on interest rate hikes for adjustable-rate mortgages -- is similar to a plan being concocted by Mr. Bush's Treasury secretary, Henry Paulson. Indeed, news reports over the weekend about his plans, disclosed by The Wall Street Journal on Friday, are what prompted Mrs. Clinton to float her own proposal, which she is doing in the form of a letter to the Treasury secretary. "I'm very pleased the administration is responding to this crisis," said Mrs. Clinton, adding that she has "high regard" for Mr. Paulson. Monday he is expected to give a speech on the housing crisis on Monday, but Treasury officials say he won't announce any breakthrough in negotiations with the mortgage industry over an interest-rate freeze on certain adjustable home loans. Barring such a move, interest rates on some 2 million mortgages are expected to rise over the next two years, leading to a spike in foreclosures. Getting out front on the foreclosure issue may make good political sense for the candidates, since analysts say foreclosures could reach 2 million by late next year. The crisis is spread unevenly across the country but some of the hardest hit are some of the biggest political swing states as well. Florida, Ohio and Michigan rank in the top ten states worst-hit by the crisis, as do Nevada and Colorado – two states where general election balloting is seen as being close this year. Mrs. Clinton said she will consider proposing legislation of her own, which would bar investors from suing if more profitable adjustable mortgages are converted to fixed-rate notes and establishing a federal fund of up to $5 billion to help the communities hardest hit by the crisis. "This is a workout not a bailout," she said, in an echo of the exact thing Republicans have said they would fiercely oppose. She said it was important to push a plan that "matches the scale of the problem." http://online.wsj.com/article/SB11966364....