A $700 Billion Debacle
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Regarding the Sept. 29 editorial "The Deal Is Done":
So, in the face of broad opposition to one of the costliest pieces of legislation in history, what is done to make it more attractive? Added are tax cuts for businesses and more FDIC insurance for people with super-size bank accounts. Where is this money going to come from? Apparently, no one cares.
In the meantime, what is being done about the "toxic" loans themselves? We bail out financial firms that hold securities built on these mortgages, but what about people facing balloon payments, variable interest rates that have gone through the roof and principal amounts that rise instead of falling after payments are made?
As your callous editorial said, the plan "contemplates" help for the true victims. There is only a voluntary provision for loan workouts. We need a program to require mortgage lenders to allow refinancing of such loans, with no prepayment penalties. This should be the price paid by any financial institution that wants to participate in the government bailout.
These loans must be turned into 30-year fixed-rate mortgages. If lenders don't want to issue such loans, the government should. It can sell them on the open market when things stabilize. Absent such a program, foreclosures will continue, and so will the consequences for the economy.
JACK HIRSCH
Rockville
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