ABC News’ Teddy Davis Reports: Republican Mike Huckabee warned Thursday that the Bush administration’s plan to freeze interest rates for some sub-prime borrowers could have a "chilling effect" on lending.
"The one problem with the plan," said Huckabee, "if it freezes banks from being able to foreclose, if this trend should continue, you really do create a chilling effect on the lending industry because who’s going to want to lend money if they don’t have the capacity to get their asset back if there’s a default on the loan."
Huckabee’s warning came during a wide-ranging interview with Bloomberg Television in which the former Arkansas governor tamped down his populist rhetoric while sounding business-friendly themes.
When it comes to dealing with the rash of foreclosures, Huckabee opposes any further action beyond the steps already taken by the Bush administration.
"I don’t think it’s gone too far," Huckabee said of the government’s intervention, "but it’s on the edge. I wouldn’t push it any further and I sure wouldn’t spend one dime of taxpayer money . . ."
Huckabee said Wall Street bears some of the responsibility for the subprime mortgage mess, adding that lenders shouldn’t be "completely let off the hook."
But he is against Congress enacting new predatory lending laws.
"The only thing that can make it worse is to get government involved in over-regulating," said Huckabee. "This is a market issue and I think, once again, I’m far more for less government regulation and the more the government gets in it, the more it gets messed up."