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