Two Democratic presidential candidates, Senator Hillary Rodham Clinton and former Senator John Edwards, are moving to tap into the economic anxieties of working Americans by introducing proposals to deal with the home-loan crisis and the flood of imports from overseas.
In a speech scheduled for this morning in New Hampshire, Mrs. Clinton is to propose providing $2 billion in federal money to help “at risk” homeowners avoid foreclosures and to assist state and local governments build rental properties and other housing for families in need.
Mr. Edwards yesterday seized on the recent imports of tainted pet food and unsafe toys from China to argue that the United States needs new trade policies to protect both its workers and its consumers.
According to a preview of her remarks provided by her campaign, Mrs. Clinton, of New York, will lay out a plan to deal with mortgage lending abuses and to “preserve the dream of homeownership” at a time of crisis in the mortgage markets as homeowners default or face foreclosure when their adjustable rates climb upwards.
Mrs. Clinton’s plan, according to the outline her campaign provided, zeroes in on “unscrupulous brokers.” She would require mortgage brokers, in their dealing with borrowers, to explain that they make more money when borrowers’ mortgage rates and fees are high. She would also establish a national registration system for brokers so that borrowers can do background checks, and pledged to work with states to develop licensing standards to ensure that brokers are properly qualified.
Banking analysts generally note, though, that brokers are only part of a larger problem: They are lieutenants for the lenders in a mortgage industry that has until now been eager to extend easy credit to homeowners who may not be aware of the ultimate costs of their mortgages once their adjustable rates rise.
Mrs. Clinton would also prohibit the use of prepayment penalties, which can trap borrowers into high-cost loans and discourage them from refinancing into less costly mortgages. And she would require lenders to include the cost of taxes and insurance in the underwriting assessment of higher-risk mortgages.
Campaigning yesterday in Cedar Rapids, Iowa, Mr. Edwards, of North Carolina, told a packed union hall that recent events had shown that global trade carried consequences not only for the nation’s jobs but also for its health and safety.
“We need to make sure that trade is not only smart and good for America’s economy and good for American workers, but safe for American families,” Mr. Edwards said. “Regular families — their safety and their best interests — should come before the interests of multinational corporations.”
Mr. Edwards has long argued that recent trade agreements have sent good-paying jobs overseas and contributed to stagnant wages in the United States. But by drawing attention to recent safety hazards in imports — including tainted pet food and toys with lead paint — he sought to broaden the debate about the effects of trade to make it a consumer issue as well as one for labor.
Mr. Edwards said he would require food from abroad to be labeled with its country of origin, increase inspections on imported food, strengthen safety standards for trading partners and stiffen the penalties for safety violations in imported toys.
Mr. Edwards was sharply critical of the North American Free Trade Agreement, and after the speech he told reporters that as president he would renegotiate the pact to make sure that higher environmental and labor standards were written directly into it.
While he did not name President Bill Clinton, who pushed Nafta through to win Congressional approval, Mr. Edwards noted pointedly that “for far too long, presidents from both parties have entered into trade agreements, agreements like Nafta, promising that they would create millions of new jobs” when “too many of these agreements have cost us jobs and devastated many of our towns.”