Concern for Homeowners, Anyone?
The new Federal Reserve Chairman has been trying to keep the mortgage bankers from losing the investment they have in our home lending industry. Hopefully some of the millions pouring in to help out lenders will help individuals in dire straits to hold onto their investment, and their homes, as well.
Senate Banking Committee Chairman Christopher Dodd urged Federal Reserve Chairman Ben Bernanke on Tuesday to use "all the tools available" so that a spreading credit crisis doesn't undermine the national economy.
Dodd, a Connecticut Democrat who is seeking his party's presidential nomination, met with Bernanke and Treasury Secretary Henry Paulson — two men playing key roles in trying to ensure that problems plaguing the financial markets don't get worse.
While urging policymakers do all they can to ease the credit crunch, the senator told reporters after the closed-door meeting that he did not specifically ask Bernanke to lower a key interest rate called the federal funds rate, which has stood at 5.25 percent for more than a year.
So far the Fed has been reluctant to reduce the funds rate which is the interest rate that banks charge each other on overnight loans and is the central bank's main lever to influence economic activity. A cut in the funds rate would cause commercial banks to lower their prime lending rate charged to many consumers and businesses.
While a lower funds rate could have positive implications, Dodd stressed that he did not want to appear to be putting "political pressure on the Fed."
While it may be a concern to the corporate set that no one be 'putting pressure om the Fed', my concern is that the pressures that are making many people lose their homes be eased. Our leaders in banking and in the congress ought to be taking a close look at the kind of lending that has gotten many borrowers into a situation they can't handle, and ease the terms under which they are losing their homes.
Pouring billions into lenders' pockets ought to have some conditions attached, that easing off on the individual investors get a part of the consideration the lending institutions are receiving.
Labels: Budget; Economy