Republican presidential hopeful Herman Cain has voiced his opposition to continuing federal programs designed to help homeowners with mortgage modifications. In a Wednesday interview with the CNN program ‘American Morning,’ Cain acknowledged that his position would not be popular, but he said that the government is creating more harm to the economy by intervening in lender-borrower interactions.
When asked if the government had a responsibility to pressure banks into modifying loans, he said, ‘I know people don't like this – but no. Because then you distort the free market system.’
Cain, a former chairman of the board of the Federal Reserve Bank of Kansas City, stated that lenders have complained that their efforts to help homeowners have been stymied by burdensome federal regulations.
‘Most bankers would want to renegotiate with people on their mortgages, but I'm telling you that there are restrictions that are government driven that [are] keeping them [from lending],’ he said. ‘I've had bankers telling me this – they've been giving me lists of things that can be done. They want to help people. They really do. But it's the threat of government regulations and the threat of the Dodd-Frank bill and rolling that out.’
Cain stressed the deregulation of the financial services industry is the most appropriate strategy for reanimating the economy.
‘I would get the government off the backs of the banks,’ he said. ‘That's one of the reasons we have the problems. A lot of the problems have to do with regulations or the threat of regulations coming out of Washington D.C.’
(Photograph courtesy of Gage Skidmore)