Kucinich Calls for Nationalization of Mortgage Risk
It’s proposed with the best intentions, but can we handle the nationalization of risk?
This week in Congress, U.S. Representative Dennis Kucinich suggested that the government should take a “controlling interest” in the speculative financial instruments that support home mortgages. The idea is that the government could then renegotiate the terms of Americans’ home mortgages, preventing families from becoming homeless.
Kucinich rightly points out that the banks, for all the public money they’ve received, have not passed the benefits down to the American people in general. However, by taking on the mortgage-backed securities that have weighed down American banks, will the American government be sunk?
Congressman Kucinich’s comments:
“Nearly 5 million families could lose their homes to foreclosure between 2009 and 2011. Now is the time for our government to take a controlling interest in mortgage-backed securities, and then direct loan modification, lowering principal and interest rates, extending terms of payment, keeping people in their homes.
Banks are not lending money; they are hoarding money, because they fear their own balance sheets understate their losses. Instead of giving the banks more of taxpayers’ money in the hopes that banks will loan the money to keep people in their homes, the government must take charge to save the homes of so many American families, again, take a controlling interest in mortgage-backed securities and direct loan modification. Keep people in their homes. The banks will get their money as well. It is time to stand up for the dream of American home ownership by saving the homes that are in jeopardy.”
