Kuhl, Massa spar on foreclosure measure
While thousands of Americans’ homes are either in or approaching foreclosure, the men seeking the 29th Congressional District seat in November are debating Congress’s way to turn the tide on the mortgage crisis.
U.S. Rep. John “Randy” Kuhl, R-29, voted against the Foreclosure Prevention Act of 2008 — signed into law Wednesday morning — saying the cost would be too high for taxpayers.
“You have taxpayers subsidizing the risk-takers (mortgage lenders), which I find unacceptable,” he said, pointing to a $300 billion Federal Housing Administration fund to renegotiate mortgages and $3.9 billion for municipalities to buy foreclosed homes, along with an undefined amount of funds to back up government-chartered lenders Freddie Mac and Fannie Mae.
“The more I think back, the more reasons I think of that I oppose this on,” Kuhl said. “It actually undoes some of the risk lenders took when they loaned money to these people.”
According to Democrat Eric Massa, who’s challenging Kuhl for his seat, the law won’t cost taxpayers.
“The only way it will cost the taxpayers money will be if the renegotiated mortgages are defaulted on,” Massa said.
By renegotiating mortgages with lenders, he added, the bill will help keep down property taxes in communities affected by foreclosures.
“As the homes are foreclosed on, then no one pays property taxes,” Massa said. “If you don’t do this (bill to keep homes out of foreclosure), the property taxes for everyone else will rise to make up for it (the loss of revenue).”
He added towns in California and Arizona have been facing rising taxes because there are fewer taxpayers, and unless there is relief for those with mortgages, property taxes for 30 million Americans could be affected.
According to Kuhl, there would be no real impact on taxes from foreclosures, saying foreclosed properties are resold with liens for property taxes, so the new buyer must pay the taxes.
“My point is, there’s no loss of taxes under this bill,” he said.
Massa also supported the bailout of mortgage lenders Fannie Mae and Freddie Mac, with the U.S. Department of the Treasury being authorized to issue lines of credit and to buy stock from the troubled mortgage writers.
“While the term bailout has some validity, it is not a bailout as in terms of Bear Stern, or even an FDIC (Federal Deposit Insurance Corporation) buyout,” Massa said, adding along with the bailout comes a new regulatory position to oversee the companies’ financial conditions.
According to Kuhl, the regulation will come too late.
“The regulation for Fannie Mae and Freddie Mac doesn’t take place for two years,” he said. “We need it now.”
“This is just another brick in the wall,” he said, adding leaders in Washington need to “tear down the walls” of the Bush administration that he believes led to the financial climate in the country. “We are going to have to undo a lot of damage.”
The Evening Tribune