Now not time for mortgage bailout: Treasury
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, credit crunch, mortgage bailout, treasury February 21st, 2008NEW YORK (Reuters) - The U.S. government is right to protect and nurture the housing market during the current crisis, but now is not the time to create a federal backstop for falling property values, a senior Treasury official said on Thursday.
Treasury Undersecretary Robert Steel told the Reuters Housing Summit it is proper for homeownership to hold a special status for policymakers because it is such an overwhelming share of consumer debt and so closely tied to an individual’s sense of his own wealth.
“If I default on my credit card debt, no one here knows and it has no affect on your credit card debt. If I am your next-door neighbor and I get foreclosed and thrown out, and the grass goes to heck and the home is boarded up … that affects you,” he said at the Reuters Summit in New York and Washington.
With that in mind, Steel said, the Treasury Department is working to develop programs that aid borrowers who are facing foreclosure, but a government bailout of the housing sector is not now needed.
“I think the strategies that we are working on are the ones that we think are correct for now, and we will continue to evaluate other things and then see where we go,” Steel said.
Tags: , credit crunch, mortgage bailout, treasury
