Today, the Wall Street Journal reported that the “number of consumers with delinquent mortgages is poised to almost double by the end of next year, hitting its highest level in at least 16 years.” In the fourth quarter of 2009, it is estimated that 7.17 percent of consumers will have mortgages that are 60 days or more past-due.
The Wonk Room has been arguing for some time that addressing the housing crisis is the best way to stem the overall financial meltdown. At the forefront of the effort to offer mortgage modifications is Sheila Bair, Chairman of the Federal Deposit Insurance Corp. (FDIC). Bair has put forth a plan that — for $24 billion — would help 1.5 million Americans avoid foreclosure. Thus far, however, Treasury Secretary Henry Paulson has rebuffed her request to pull that $24 billion from the $700 billion Troubled Assets Relief Program (TARP).
Today on CNN, Bair was asked where the “the logic” is in Paulson’s refusal to let her implement her plan. Bair only laughed, later saying she and Paulson have “different perspectives on this issue.” Watch it:
A report being released today by the Government Accountability Office states that Treasury has “yet to address a number of critical issues” in combating the financial crisis. Elizabeth Warren, chairwoman of the Congressional panel overseeing the TARP, said that Treasury seems “to be lurching from one tactic to the next without clarifying how each step fits into an overall plan.”
However, there might still be hope for Paulson seeing the light. Yesterday, he signaled that Treasury is “actively engaged” in developing new financial rescue programs to be presented to Congress when they are “ready for implementation.”
Bair’s plan is ready. It would behoove Paulson to give her the money to act on it.