CHARLOTTE, NC (WBTV) - Two elements of Tuesday's bank bailout "part two" announced by Treasury Secretary Tim Geithner has a direct impact on consumers.
First, there's the effort to committ money in the hopes of resuming the flow of credit in this country. The credit markets have been tight in the past year, making it harder for consumers to get loans.
This would apply to all kinds of lending, including student loans, loans to buy new cars, consumer finance, and down the road even commercial and residential mortgages.
Bruce Hamlett with United Family Services says this is good, provided there's a focus on responsible borrowing.
"The consumer has to bear some of the burden. There has to be education on the front end so we dont' get into this situation again," Hamlett says.
A second portion of the bailout focuses on the housing market.
At least $50 billion will be used to help reduce interest rates, and drop the monthly mortgage payments of those who find themselves in jeopardy of losing their homes.
Details on this part of the plan, according to President Obama Tuesday, will be released in the weeks to come. Some reports speculate there will be financial incentives for lenders willing to work with mortgage holders on changing the terms of their mortgage.
"The need is still escalating, the number of foreclosures is escalating," Hamlett says. His office continues to see in an increase in the number of people who come in for assistance in avoiding foreclosure.
Before he can decide whether this $50 billion injection into the housing market will work, Hamlett wants to know how the money will be spent.
"Will it go to banks to work directly with the clients or will it go to agencies like ours to help handle the demand?" Hamlett wonders.
A combination of both, he says, would likely be the best way to tackle the problem.