House Democrats reached a compromise yesterday on the cramdown provision of John Conyers’ Helping Families Save Their Homes Act, and for a change, it was a decent compromise. Proponents of this legislation pretty much managed to keep the cramdown provision intact, meaning that bankruptcy judges will be able to modify mortgages for homeowners facing foreclosure on primary residences. Plus, there were negotiations with Senate Dems and not just New Democrats, who have been acting on behalf of their corporate interests and have made passing cramdown legislation ridiculously and unnecessarily difficult.
Chances are Conyers’ compromised legislation will pass the House tomorrow. And while, as Bowers noted, it was a good sign to see Senate staffers participating in yesterday’s negotiations, odds are HR1106′s counterpart in the Senate will still face a tough battle. That’s why it’s key to keep Brave New Foundation’s petition going that over 17,000 people have signed in the last four days! We have to keep the pressure up on Congress and get these judicial modifications passed.
On Tuesday, the Helping Families Save Their Homes Act, a bill sponsored by Jon Conyers in the House that would empower judges to write down the principal and interest payments on some mortgages (aka “cram-down legislation”), will finally come up for a vote. The bill had been delayed thanks to effective pressure from the financial services industry on Blue Dog and New Democrats. President Obama and progressive Democrats in Congress support the legislation and in fact it would be central to Obama’s plan to help keep more Americans in their homes (watch Brave New Foundation’s interview with Conyers for a more complete picture of the bill.)
So, what level of pressure will the Obama administration apply to get this cram-down bill passed in its current form? As Chris Bowers notes, Shaun Donovan will be going directly to the House caucus on Monday.
On Monday, Housing Secretary Shaun Donovan will speak to House Democrats, and make a direct appeal for not narrowing or otherwise watering down the cram-down legislation. The administration does hold a lot of sway with congressional Democrats right now, and is riding high in the polls, so this appeal might just work. Let’s hope so.
On Tuesday, Congress will vote on whether or not to level the playing field between the banks that caused the collapse of the housing market and struggling homeowners. Representative John Conyers has introduced legislation in the House that authorizes judges to require banks to reevaluate overpriced mortgages of bankrupt homeowners.
Conyers’ proposal is a simple, modest fix that will help keep hundreds of thousands of families in their homes. This bill is a win for every homeowner in America. By helping stem foreclosures, it will help arrest the decline in home values for everybody, not just those who are struggling to make payments. President Obama supports the bill and has called on Congress to pass it. The banks and the lobbyists that represent them oppose the bill with a passion.
These are the same banks that started this recession in the first place by hawking worthless subprime mortgage loans to naïve or unsuspecting borrowers. Joan Adams of Irvine, California lost her home to foreclosure, and is now living out of a motel by the airport. “There’s no one out there to help,” Joan says. “Billions of dollars to all the banks for bailouts for something they caused, and yet we’re the ones that are homeless.”
The House vote on “cramdown” housing legislation, which allows bankruptcy judges to re-value mortgages according to current market prices, swill take place on Tuesday. In advance of the vote, The Center for Responsible Lending has a useful chart up showing that 800,000 homeowners, or 10% of all American homeowners facing foreclosure,. could be saved from foreclosure by “cramdown” legislation. Among the 86 congressional districts represented by either a New Democrat or a Blue Dog, 143,672 homeowners are projected to be saved from foreclosure by cramdown legislation.
143,672 is a pretty big number. It is such a large number that, if the legislation does not pass, it would be pretty easy for organizations like ACORN to find multiple families from all 86 of these congressional districts whose homes could have been saved by cramdown, but which instead were foreclosed upon. Once people find these local families, it would be pretty easy for organizations like Brave New Films could get them on camera, and get them to say something like this:
Last year, I lost my home. President Obama supported legislation that would have let hundreds of thousands of families like mine save their homes in bankruptcy court. Sadly, Congressman X voted with Wall Street banks instead. We lost our home, even though Congressman X could have saved it. So, in this year’s Democratic primary, I am voting to kick Congressman X out of office.
It was just six years ago that Olive Thompson purchased a home in a quiet working class neighborhood on Long Island with a mortgage from Option One. Her story is similar to hundreds of thousands of Americans who now face the very real possibility that they will be evicted from their homes. Throughout the country the foreclosure rate in 2008 skyrocketed. In the first two months of this year there have been more than 10,000 foreclosures in New York state alone.
Perhaps more striking than the foreclosure epidemic is just how easily it could have been avoided. Thompson discusses her predicament and what she plans to do if she’s issued an eviction notice.
Hey, I’d love to see Rick Santelli sit down with these families and explain to them what losers they are – compared to the Masters of the Universe like Santelli who got the country into this mess, I mean. Moral hazard, my ass:
The orders came while Navy Lt. Adam Diaz was winding down a one-year stint in Baghdad: Report to the Navy Annex in Arlington for a new assignment in April. — Given the military lifestyle, the prospect of a move came as no surprise to Diaz, 31, who has spent his adult life in the Navy. The shock came when he spoke with his wife, Stephanie Diaz, about the value of the Jacksonville, Fla., home they bought in June 2006, near the height of the housing bubble. — “Hey, by the way,” she recalls telling him. “The house has been valued for about 50 grand less than when we bought it.”
Yesterday, the first activist in a civil disobedience campaign to resist foreclosure was arrested in Baltimore. The campaign, launched by ACORN earlier this month, aims to draw attention to the foreclosure crisis and ultimately allow people to save their homes. The question is whether activists and home defenders can help affect policy and whether cities will begin to adopt moratoriums on home foreclosures.
Who’s ready for cramdown? Congressman John Conyers sure is, President Obama seems to be, and now Speaker of the House Pelosi wants to bring a housing bill to a vote this week that would empower bankruptcy judges to modify mortgage terms for borrowers on their primary residences. As David Dayen (aka Dday) explains, “This is an important provision, which most economists believe will be the best tool homeowners can have for them to stay in their homes, and for lenders to agree to loan modifications.” Dayen and Rep. Conyers, the chair of the House Judiciary Committee, discussed the importance of cramdown as part of Brave New Films’ Fighting for Our Homes campaign.
Conyers has long been a champion of cramdown. With someone facing foreclosure in our country every 13 seconds and 8-10 million Americans in danger of losing their homes, this legislation would effectively “level the playing field,” as Conyers put it. It would allow bankruptcy judges to consider the unfair circumstances of a mortgage, while enabling those homeowners who have been victimized by predatory lending practices to be able to deal with their lenders. All the while, it would stick to the wealthy elite and those in our government who have resisted cramdown, since until now, only secondary and tertiary properties and assets qualified to have the terms rewritten by a bankruptcy judge.
On the February 20 edition of Fox News’ The O’Reilly Factor, host Bill O’Reilly falsely claimed that prior to the housing crisis, Rep. Barney Frank (D-MA) had been “pumping it that poor people ought to be given mortgages ’cause everybody has a right to a house.” In fact, as Media Matters for America has noted, Frank has consistently taken the position that the government should focus on the expansion of affordable rental housing, rather than enacting policies geared toward universal home ownership.
Indeed, in a 2006 speech on the House floor, Frank stated: “I always want to make it clear to people that while homeownership is very important, it should not be considered all of our goal in the housing area. A large number of people, for economic reasons and other reasons, will be renters.” Further, in a profile of Frank for the January 12 edition of The New Yorker, staff writer Jeffrey Toobin wrote: “According to Frank, at the root of the real-estate crisis was a misguided notion that homeownership should be available to all people — what President Bush has called ‘the ownership society.’ ” Toobin quoted Frank saying in a speech that home ownership “is not suitable for everybody.” In his profile, Toobin also addressed Frank’s efforts to preserve and expand housing for low-income renters.
On Wednesday I wrote a piece on Huffington Post and another here at Open Left talking about the centrality of fixing the foreclosure crisis to any recovery from the economic meltdown. Since the toxic assets at the center of the meltdown are based on mortgages that are entering foreclosure at a rate of one every 13 seconds, we have to address foreclosure as a part of getting America back on its feet.
The Homeowner Affordability and Stabilization Plan (HASP), announced in Phoenix on Wednesday by President Obama, which will help up to an estimated 9 million families, is a good first step – and the first serious effort by the Federal government to confront the challenge. But just because there was an announcement does not lessen the urgency of the problem. We are still in a situation where four families every minute enter the foreclosure process. We believe there must be a moratorium on foreclosures until HASP is fully implemented.
In the extended entry I give a report back on ACORN’s actions on Thursday to create a sense of urgency around this crisis and help some families stay in their homes.