Politics

Republicans react to Obama’s housing plan by mouthing the mortgage banking industry’s talking points.

CREDIT:

Yesterday, President Barack Obama unveiled his plan to deal with the housing crisis. One part of the plan in particular — a provision allowing bankruptcy judges to “cram-down” mortgage payments for troubled homeowners — has drawn the ire of conservatives. Rep. Dan Lungren (R-CA) said it is “going to affect future mortgages, because that’s going to put an additional risk premium on all mortgages,” while Sen. Jon Kyl (R-AZ) claimed “this is going to raise rates for everyone else because banks have to cover the risk.” Watch it:


As The Wonk Room noted, conservatives are getting their arguments straight from banking industry talking points. BusinessWeek reported that the Mortgage Bankers Association “is distributing talking points to key congressional aides…[with] the argument that if lenders can’t be confident that loan terms will survive, they will raise rates.”