According to the lawmakers in US, the plan of the government to bail out banks by buying stakes is not going to help homeowners who are struggling due to collapse of the housing market which is the actual cause for the current financial crisis.
According to Christopher Dodd, the chairman of the Senate Banking Committee, more efforts have to be taken towards curbing mortgages and foreclosures. He added that the Bush administration did not show dedication towards this. He was speaking at a meeting with policymakers. One of the top Republicans at the panel, Richard Shelby said that a lot of money is being wasted on peripheral things due to the basic and fundamental issue not being addressed.
There is a lot of pressure on Henry Paulson, the secretary of treasury to allocate part of the Congress approved $700 million bailout plan towards helping homeowners who are on the verge of being homeless. Sheila Bair, the chairman of the Federal Deposit Insurance Corp. suggested that loan guarantees could be used to pressurize mortgage service providers to restructure loans. Neel Kashkari, assistant secretary to the interim Treasury and head of the office monitoring the bailout said in a testimony to the committee that troubled assets would be insured as a top priority and designs and plans to this effect will be set in action by the Treasury.
Bair reiterated that though there has been significant progress there was a strong need to act dramatically as early as possible to completely solve the problem.