ABC News’ Kate Snow and Eloise Harper Report: One day before Treasury Secretary Henry Paulson and Housing and Urban Development Secretary Alphonso Jackson are set to offer the administration"s prescription for the mortgage foreclosure crisis, Senator Hillary Clinton called on Wall Street to make urgent changes.
"I’m here today to call on Wall Street to do its part to help end the foreclosure crisis that is devastating middle class families and threatening our economy," Clinton said.
Clinton claimed credit for suggesting the administration convene a conference to study the issue, repeatedly suggesting that the Bush administration was following her lead and not the other way around.
Clinton is calling for a 90 day moratorium on foreclosures for subprime, owner-occupied homes. She also called on lenders to freeze the monthly rate on subprime adjustable rate mortgages, with the freeze lasting at least five years or until the mortgages have been converted into affordable, fixed-rate loans. And she would have mortgage lenders provide status reports on the number of mortgages they have modified.
Clinton said if Wall Street did not act voluntarily, she would propose legislation. She was also careful to suggest her ideas did not amount to a "bail out" of the industry.
"What I’m proposing is a comprehensive work-out, not a bailout," she said.
Clinton said Wall Street doesn’t bear sole responsibility for the crisis, but she said it "not only enabled but often encouraged reckless mortgage lending. Mortgage lenders didn’t have balance sheets big enough to write millions of loans on their own. Wall Street originated and packaged the loans that common sense warned would end in foreclosure. Some people might say Wall Street only helped distribute risk. I say, Wall Street shifted risk away from the people who knew what was going on and onto the people who didn’t."
While she talked about Wall Street, Clinton never actually set foot on the famous thoroughfare, choosing to announce her proposals at the NASDAQ market site in New York’s Times Square rather than the more conservative NYSE, where she might not have been as warmly welcomed.