Democrat Senator’s Simultaneously Plans for Containing Foreclosures and Helping Modest Business Concerns

September 23rd, 2008

Democrat Senator Robert Menendez spoke of his simultaneous plans for containing foreclosures and helping modest business concerns on Friday 19th September. Menendez is also member of the Banking Committee of the Senate. He was speaking at the Newark Club on the day the federal government declared plans to revive the staggering economy and the tumbling real estate market. The announcements by the federal government boosted up the stocks for the second consecutive day. But the point to bear in mind is that the market is one thing and the economy another. The two might be interlinked but are not the same. What result this will have on the economy only time can tell because it is a long-term effect.

Menendez said that he was pleased to see that the administration was “finally looking past the next short-term crisis and looking to a solution to help in this difficult time.” However he had some reservations about the ranking of the priorities and how Main Street and the house owners facing foreclosures will be ranked.

Menendez had three immediate plans that would be of instant benefit. Firstly he wanted the judges to have the power to modify the terms of mortgages so that the primary residences and homes of victims are protected. This will contain the onward march of foreclosures to a great extent.

Secondly he wanted the launching of an emergency loan plan that will help small business entrepreneurs to start off on their ventures. Till now in this foreclosure-ridden atmosphere they have been having difficulty finding finance.

Thirdly he wanted another economic stimulus that would target creation of jobs, stop cuts in vital services by financing framework projects and extending unemployment insurance. He also wanted those who were directly affected by cuts by Wall Street to get tax relief for health insurance and pay cuts. This will help them tide over the crisis and not resort to cutting in mortgage payments.

Menendez explained that the economy of New Jersey to a large extent (one quarter to a third) depends directly or indirectly on the activities of Wall Street. He categorically stated that both the lenders and the borrowers are equally responsible for the current foreclosure crisis. It is unfair that borrowers are ticked off for succumbing to loans they couldn’t afford or understand but on the other hand the lenders who perpetrated this situation are bailed out.