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Federal Bailout Legislation Will Not Help Foreclosure Crisis According to Latest ABI Quick Poll

Contact: John Hartgen
               (703) 739-0800
               jhartgen@abiworld.org

 

FEDERAL BAILOUT LEGISLATION WILL NOT HELP FORECLOSURE CRISIS, ACCORDING TO LATEST ABI QUICK POLL

October 23, 2008, Alexandria, Va. — A overwhelming majority of respondents (75 percent) in a recent ABI Quick Poll believe that the recently enacted federal bailout package will not be effective in reducing the number of foreclosures. Responding to the statement, “The Federal bailout legislation will be effective in reducing the number of foreclosures to deserving borrowers,” 51 percent of respondents “strongly disagreed” and 24 percent “somewhat disagreed.”  

Fifteen percent of respondents did think that the federal bailout legislation would be effective in reducing the number of foreclosures. Six percent “strongly agreed” and 9 percent “agreed somewhat” that the bailout package would be effective in slowing the number of foreclosures. Seven percent of respondents did not know or had no opinion on the issue.

On Oct. 3, President Bush signed the “Emergency Economic Stabilization Act” to authorize the U.S. Treasury Secretary to spend up to $700 billion to purchase distressed assets, especially mortgage-backed securities, from the nation's banks. The measure was in response to the recent credit crisis and economic turmoil that threatened the stability of the U.S. financial system.

While the financial bailout package encourages loan modifications for distressed mortgages, it does not require lenders to modify home loans in exchange for taxpayer dollars. An estimated 3.2 million homes will be lost to foreclosure this year and next, according to published reports.

ABI’s Quick Poll is posted on ABI’s home page, www.abiworld.org. ABI members and the public are invited to respond to a question on a timely bankruptcy or insolvency issue. Visit http://www.abiworld.net/quickpoll/ to access the results of previous ABI Quick Polls.

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ABI is the largest multi-disciplinary, nonpartisan organization dedicated to research and education on matters related to insolvency. ABI was founded in 1982 to provide Congress and the public with unbiased analysis of bankruptcy issues. The ABI membership includes nearly 11,700 attorneys, accountants, bankers, judges, professors, lenders, turnaround specialists and other bankruptcy professionals, providing a forum for the exchange of ideas and information. For additional information on ABI, visit www.abiworld.org. For additional conference information, visit http://www.abiworld.org/conferences.html.