After Bailout, Senators Ask for a Delay in Foreclosures
By EDMUND L. ANDREWS, New York Times
WASHINGTON — Four Democratic senators urged the Bush administration on Thursday to stop the nation’s two giant mortgage finance companies, Freddie Mac and Fannie Mae, from foreclosing on any homes for at least 90 days and to help troubled borrowers switch into more affordable mortgages.
On Sunday, the government seized control of both government-sponsored mortgage finance companies. The Treasury Department pledged to supply up to $100 billion in fresh capital for each company and prevent them from defaulting on the trillions of dollars in mortgage-backed securities that they either own or have guaranteed.
The four senators — Charles E. Schumer of New York, Bob Casey of Pennsylvania, Sherrod Brown of Ohio and Robert Menendez of New Jersey — said the administration should follow the example of the Federal Deposit Insurance Corporation, which took over IndyMac Bank in Pasadena, Calif., and imposed a temporary freeze on foreclosures while it tried to modify as many delinquent loans as possible.
The senators described their goal as a temporary “time-out” that would give federal regulators and the newly appointed chiefs of Fannie Mae and Freddie Mac a chance to help defaulting borrowers negotiate new loan terms or refinance into a different mortgage.more
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