Protestors Demand Bailout for Homeowners

Posted on November 13th, 2008 by saman

On Tuesday September 23, protestors gathered in lower Manhattan shouting in loud unison, “Bail out Main Street, not just Wall Street!” The demonstration was in response to U.S. Treasury Secretary Henry Paulson’s plan to solve the current economic crisis, which is still being debated and analyzed by congress. The plan will hand over $700 billion to bail out mortgage companies and banks which are drowning under failed sub-prime loans.

The protester’s chant rang loud outside the Federal Reserve, but it is the same argument that is being heard all over America as people discuss the rapid economic decline of our country, and the struggles of the every day workers who are about to lose their homes. The current crisis is felt by all Americans and could be the most catastrophic economic fall since the depression. Millions have lost their foreclosed homes due to sub-prime and interest-only loans which have risen so high they simply can no longer afford to pay them.

Many of these hard working Americans were lured into these loans with promises they would be able to refinance in a year or two and get a much better rate. That never happened and many of them are facing increases of $1,000 or more in the coming year, and will join millions of others in line for foreclosure as a result.

Wall Street has been asking Washington what the federal government is going to do to stop this major economic upheaval, and President Bush’s response was the $700 billion bailout for the big companies who face major threats as a direct result of loose lending practices.

The Association of Community Organizers for Reform Now (ACORN) is pressuring the federal government to give at least part of the $700 billion to every day taxpayers who are about to lose their homes as a result of unfair loans of which they were the victims. ACORN also has another idea: amend the bankruptcy laws so that homeowners can restructure their homes in bankruptcy court. That could save a lot of American’s from losing their homes due to enormous increases in their mortgage rates.

They claim many homeowners were victims of mortgages designed to substantially raise their mortgage rates every year, and many of these people were promised they could refinance in the future and would not have to worry about the increases. Many of them are now stuck in those mortgages and simply cannot afford the rising price tag.

Others simply took home loans they could not afford to begin with, and lenders should have turned them down but didn’t. Put those circumstances together and we had the makings of today’s crisis, but no one put restraint on the lender’s loose decision making it all came tumbling down.

Whether the $700 billion bailout will pass congress and whether the final agreement will include the average struggling homeowner in its plan is yet to be seen. ACORN and the rest of America will be waiting for result.