Tuesday, September 30, 2008

Detroit City Council President Conyers and Member-at-Large JoAnn Watson Oppose Taxpayer Bailout of Wall Street

Press Conference-13th Floor CAYMC

Contact: Monica Conyers, 224-4530
JoAnn Watson, 224-4535

No Bailout for Banks and CEOs with bailouts for Residential Victims of Housing and Mortgage Crisis

In a press release today, Council President Monica Conyers states, “There should be no bailout for banks and CEOs without commitments to help homeowners victimized by the housing and mortgage crisis.”

On September 22, 2008, the Detroit City Council passed a resolution demanding Congress bailout victims of the housing and mortgage crisis by enacting a two-year moratorium on home foreclosures.

Council Member Watson states, “If we can bailout Freddie Mac and Fannie Mae ($200 Billion), AIG ($85 Billion), and the “Big Three” auto companies ($25 Billion), then we should be able to help the people whose tax dollars will be used for these bailouts.” Massive numbers of home foreclosures and predatory home lending by firms in connection with the very Wall Street firms ($700 Billion) being bailed out by the Federal government have devastated Detroit and Michigan.

Unprecedented layoffs along with jobs being exported overseas litter the economic terrain of Michigan. Since 2000, the Detroit metropolitan area has lost over 200,000-auto industry related jobs. Over the past forty years, Detroit has gone from the highest rate of home ownership to the highest rate of home foreclosure in 2007. The economic engine of this country is not working properly because of misplaced economic priorities and corporate greed.

Some companies appear to have deliberately targeted citizens for subprime ARM mortgages with penalties for early pay-off and in some cases outright fraudulent mortgages. $1.3 trillion is the estimated value for outstanding sub prime loans in the nation. Although only 12 percent of loans, they represent 53.3 percent of foreclosures.

Ironically, some of these families actually qualified for close to prime or prime mortgages. Michigan claims both the highest unemployment rate and the highest percentage of sub prime mortgages in the nation.

Watson further states, “When people are working they contribute to the economy by paying for their mortgages, paying local, state and federal taxes. Workers become consumers only when they can pay for home and essential necessities.”

Approximately, 2.5 million homes are in jeopardy of foreclosure in 2008. Yet, the Federal government fails to include a bailout of foreclosed families and citizens in dire economic distress. Ironically, citizen tax dollars will bailout Wall Street banks.

Additional City Council demands include strict re-regulation of Wall Street that prohibits future financial speculation such as that of the last ten years. Furthermore, City Council urges Congress to make sure any new credit lending guidelines do not negatively impact financial centers throughout the U.S. “Only when the U.S. government gives its people a hand up, should the people give Wall Street a bailout,” emphasizes Watson.

Finally, the Detroit City Council insists the U.S. Senators from Michigan and Detroit-based Congressional Representatives contribute to Detroit’s economic recovery by instituting a national moratorium on foreclosures for at least two years; earmarking a one billion dollar economic package to create WPA-style jobs for heads of households in Detroit; and providing tax credits for small businesses.

“We must hold the corporate executives accountable and not reward them for their role in creating this housing mess. However, we must help our residents who were victimized by speculative practices,” exclaims Conyers.

No comments: