Dear Mr. Kayser:
Thank you for contacting me about the $700 billion to bail out Wall Street. I voted against it because I believed it lacked meaningful relief for homeowners facing foreclosure, and it left taxpayers with the short end of the stick.
Still, make no mistake: I understand the severity of this financial crisis. The bottom line is that until we stem the record number of home foreclosures, this crisis will continue to worsen.
That’s why I’ve proposed a three-part plan to address the financial crisis, including help for homeowners.
First, I’m working on legislation to create new ways for homeowners to refinance their mortgages and stay in their homes. My proposal will require Fannie Mae and Freddie Mac to retool mortgages that they hold on their books. It will also establish a direct loan facility within the Federal government to require lenders and other financial institutions that benefit from the bailout to refinance or modify mortgages in danger of default or foreclosure.
Second, I am calling for an investigation into the business practices of major credit rating agencies that helped foster the enormous growth of the mortgage-backed securities industry. Investors relied on and trusted in those credit ratings, and the public deserves to know how these rating agencies concluded that such risky investments could receive high credit ratings.
And finally, we must better regulate all aspects of the financial markets. Today’s financial crisis results from years of inadequate oversight that has been far too tolerant of excessive risk taking.
Meantime, I’ll continue to press Congress to act quickly to keep people in their homes and put our economy back on track.