March 6th, 2009, Fairfax, VA—Americans for Limited Government President Bill Wilson today strongly condemned the House of Representatives for voting for H.R. 1106, a bill that gives bankruptcy judges the power to reduce mortgage principals and rates, “and that forces responsible U.S. taxpayers and homeowners to compensate delinquent borrowers and irresponsible lenders that took out and made the bad loans in the first place.”
In a statement, Wilson said, “This is the last straw: the House of Representatives has now voted to force those who pay their bills to also pay for those who won’t.”
The legislation passed the House 234-191.
“The American people do not support this out-and-out robbery,” he added. “And the House’s betrayal of their constituents will not soon be forgotten. Americans for Limited Government will make certain of that.”
Wilson, in a letter to Congress last week, warned that the legislation would further weaken and distort the housing market.
“The House, led by Speaker Pelosi, has done all in its power to hide it from their constituents, but it is they who will ultimately pay for these mortgage cram-downs,” Wilson said.
“It forces banks to eat the costs when the principal owed on the mortgage is reduced, and then the banks that face insolvency then turn to the government for more bailout funds,” Wilson explained.
“The taxpayers then wind up paying twice: first to bail out the borrower who can’t afford their house, and then the bank that was forced by government to make the bad loans in the first place,” Wilson added.
Wilson also warned in detail that the bankruptcy courts would become overwhelmed, “There were about 2.3 million foreclosures in 2008, and The House of Representatives thinks 368 bankruptcy judges can handle that sort of caseload.”
“This is going to be a disaster,” Wilson predicted.
Wilson believes that most Americans do not support President Obama’s plans for mortgages.
“It’s very simple: the American people do not want to reward those who made bad decisions in the first place. And the House of Representatives instead opted to pay off those who took out loans they could not afford and banks that were forced by government to make loans that could not be paid back,” Wilson concluded.
Interview Availability: Please contact Alex Rosenwald at (703)383-0880 or at arosenwald@getliberty.org to arrange an interview with ALG President Bill Wilson.
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