Obama: Mortgage woes show Wall St reform crucial

* Touting popular law 10 days before elections

* Law criticized for weakness on mortgage issue

* Says new watchdog could defend consumers on mortgages

By Patricia Zengerle

WASHINGTON, Oct 23 (BestGrowthStock) – President Barack Obama said
the home foreclosure crisis underscored the importance of his
Wall Street reforms, and he blasted Republicans on Saturday for
“beating the drum” to roll back the regulatory overhaul.

“Recently, we’ve seen problems in foreclosure proceedings
— mistakes that have led to disruptions in the housing
markets. This is only one more piece of evidence as to why Wall
Street reform is so necessary,” Obama said in his weekly radio
address, 10 days before Nov. 2 congressional elections in which
his fellow Democrats are expected to sustain sharp losses.

The address marked Obama’s most extensive comments on the
foreclosure mess since revelations first surfaced of faulty
paperwork.

He has been trying to walk a delicate line on the
foreclosure issue. The White House believes the problems
highlight a contrast with Republicans opponents of the landmark
Wall Street reform package the Democratic Congress passed in
July.

But Obama has stopped short of backing calls for a
nationwide moratorium on home foreclosures — something the
White House fears could worsen the housing crisis.

The financial reform law was aimed at preventing a repeat
of the 2007-2008 financial meltdown that set off the worst U.S.
recession in generations.

Though analysts see little chance the financial reform law
would be fully rolled back, opponents are targeting specific
provisions, such as funding for a new consumer watchdog.

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Obama said the new watchdog, known as the Consumer
Financial Protection Bureau, “will have the authority to guard
against unfair practices in mortgage transactions and
foreclosures.”

CAMPAIGN THEMES

Repeating a theme of recent campaign speeches for
Democratic candidates, Obama said Republicans’ opposition to
regulatory reform showed they work for special interest groups,
not middle-class Americans.

Wall Street reform is one of Obama’s more popular
legislative accomplishments, given Americans’ anger over
financial sector profits and bonuses while the country wrestles
with 9.6 percent unemployment and other effects of a weak
economy.

“This was a bill designed to rein in the secret deals and
reckless gambling that nearly brought down the financial
system,” Obama said.

“Some in the financial industry were eager to protect a
status quo that basically allowed them to play by their own
rules. And these interests held common cause with Republican
leaders in Washington who were looking to score a political
victory in an election year,” he said.

“Top Republicans in Congress are now beating the drum to
repeal all of these reforms and consumer protections,” Obama
said.

Allegations of faulty foreclosure paperwork and demands
banks buy back billions of dollars in mortgages sold to
investors have raised fears financial firms face a new wave of
difficulties similar to the 2007-2008 crisis.

Critics say the failure to fix the housing finance system
in general, and mortgage giants Fannie Mae (FNMA.OB: ) and
Freddie Mac (FMCC.OB: ) in particular, is a gaping hole in the
Wall Street reform law.

Republicans say they don’t oppose financial regulation but
say the bill should have been structured differently.

“Everyone wants to hold Wall Street accountable and make
sure that the irresponsibility that led to the terrifying
crisis of 2008 never, ever happens again, but the law that
Washington Democrats passed doesn’t do that,” said Michael
Steel, spokesman for House of Representatives Republican leader
John Boehner.
(Editing by Jerry Norton and Stacey Joyce)

Obama: Mortgage woes show Wall St reform crucial