Brown: Bailout must include mortgages

U.S. Sen. Sherrod Brown (D-Lorain) told the Senate Banking Committee that the federal bailout won’t work if it doesn’t target foreclosures and there isn’t enough oversight of the bailout.  

Treasury Secretary Henry Paulson announced he would not seek to use taxpayer money to purchase mortgage-backed assets, but instead put money directly into banks hands to facilitate lending.

According to prepared remarks, Brown said no economic plan to save the economy from recession makes sense if it doesn’t target foreclosures.

“I don’t see how any strategy to right the economy can succeed if it does not bolster banks’ lending efforts and fix the damage from the evaporation of lending standards over the past several years.  We’ve only solved half the problem if we get credit to a tool and die shop but its employees are losing their homes,” he said.

Brown also said in his remarks that he’s not convinced that there’s been enough transparency for the bailout.