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Clinton Suggests 90-Day Moratorium On Foreclosures

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Dec 5, 2007 3:36 pm US/Eastern

Clinton Suggests 90-Day Moratorium On Foreclosures

NEW YORK (AP) ―

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Sen. Hillary Rodham Clinton is calling on Wall Street to take responsibility for its part in the mortgage crisis -- urging lenders to voluntarily impose a 90-day moratorium on foreclosures and freeze mortgage rates for at least five years.

A federal plan to forestall foreclosures is expected by the end of the week.

Clinton detailed her proposal Wednesday in an appearance at the NASDAQ Marketsite in Manhattan. Earlier this week, she sent a letter to Treasury Secretary Henry Paulson saying the Bush administration was slow to act on the mortgage crisis.

An estimated 2 million subprime mortgages, loans offered to borrowers with spotty credit histories, are scheduled to reset to much higher levels by the end of 2008. Those resets will push the payment on a typical mortgage up by $350 per month, taking it from $1,200 currently to $1,550.

Clinton told the assembled financial-sector workers that Wall Street shared the blame with lenders for giving mortgages to people who were unlikely to be able to make repayments.

"I believe Wall Street shifted risk away from people who knew what was going on, onto people who did not," said Clinton.