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How Congress Failed on Foreclosures

August 7, 2009 - by Donny Shaw

A small, mostly unnoticed change that the Senate made to the housing bill has had a major effect on undermining President Obama's plan for stopping foreclosures.

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Job Losses Slow

May 8, 2009 - by Donny Shaw

Not directly related to Congress, but today's news on what is probably the most important economic indicator is still relevant on many fronts. According to the Labor Department's monthly jobs report, the unemployment rate hit a 25-year high of 8.9 percent in April, but the number of jobs lost during the month fell to their lowest level since October. I'm guessing that this coupled with the Treasury's optimistic stress test results released yesterday will weaken the Democrats' hand in finalizi...

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House Passes Major Mortgage industry Reforms

May 7, 2009 - by Donny Shaw

The House today passed a bill that, to my mind, is a fairly significant response to the subprime mortgage mess that is at the root of the current economic crisis. The bill, known as the Mortgage Reform and Anti-Predatory Lending Act, would ban pay incentives for mortgage brokers to steer borrowers into high-priced loans, require brokers to ensure that borrowers have a "reasonable ability" to repay the loan they are getting and require that all refinancing transactions provide a "net tangible benefit" for homeowners. If brokers fail to meet these requirements, they would be liable to be sued.

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O M.I.A.

May 4, 2009 - by Donny Shaw

I was noticing the lack of public Obama support last week when cramdown went down in the Senate.Via the Washington Independent, I see that the New York Times was noticing as well. The Obama administration sat by last week as 12 Senate Democrats joined 39 Senate Republicans to block a vote on an amendment that would have allowed bankruptcy judges to modify troubled mortgages. Senator Obama campaigned on the provision. And President Obama made its passage part of his antiforeclosure plan. It...

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House Takes on the Subprime Mortgage Industry

May 4, 2009 - by Donny Shaw

Following their action on the Credit Cardholder's Bill of Rights Act last week, the House is continuing this week to try and fix some of the regulatory lapses that contributed to the consumer debt explosion that is at the center of our current economic crisis. This week, the House will take up a bill to reform and regulate the subprime mortgage lending industry -- the Mortgage Reform and Anti-Predatory Lending Act.

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Switching Sides

April 30, 2009 - by Donny Shaw

Making things a little more official seeming, Sen. Arlen Specter [D, PA] today moved his Senate desk from the Republican side of the chamber to the Democratic side. CQ: As the eighth most senior Democrat, his desk now sits in the second row of the center-most section of the majority party’s desks, behind Majority Leader Harry Reid of Nevada and Majority Whip Richard J. Durbin of Illinois. Specter now shares a row with Robert C. Byrd of West Virginia, the longest-serving senator ever, and si...

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Durbin's Cramdown Amendment

April 30, 2009 - by Donny Shaw

Opponents to cramdown generally argue that allowing judges to modify mortgages for homeowners who enter bankruptcy would create ongoing uncertainty for mortgage lenders and would lead to higher interest rates for future borrowers. But Senator Durbin's cramdown amendment (.pdf), which was defeated today by the Senate, contains language specifically designed to prevent that kind of problem. Fist, in Section 503, entitled "Authority to Modify Certain Mortgages," it specifies that only mortgages ...

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All Carrot, No Stick

April 29, 2009 - by Donny Shaw

It's looking increasingly likely that cramdown, a provision giving judges the power to reduce mortgage principals and interest rates for homeowners in bankruptcy, will be removed from the the housing bill (H.R. 1106) this week by the Senate. Of the two avenues for reworking troubled mortgages in President Obama's housing plan, cramdown is the one that would not give more taxpayer money to banks. It would be free of cost to taxpayers while the other avenue, incentive payments for voluntarily lo...

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A Cram-Down Deal

April 16, 2009 - by Donny Shaw

Congress's leading bill to address the foreclosure crisis has been stuck in the Senate for the past five weeks, but a deal may have finally been reached. It looks like the main provision of the The Helping Families Save Their Homes Act of 2009, which would let bankruptcy judges rework mortgages for homeowners facing foreclosure, including a "cram-down" of the principle, would be significantly weakened.

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In February, President Obama announced a plan to help families with troubled mortgages stay in their home. One of the key components of the plan, giving judges the power to modify loans for homeowners in bankruptcy, requires approval from Congress (H.R. 1106), but Senate moderates are threatening to block it for now and to push for a weaker version of the provision down the road.

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New Democrats Strike a Cramdown Deal

March 3, 2009 - by Donny Shaw

For the past few days, the New Democrats Coalition and the House leadership have been engaged in behind-the-scenes negotiations over the cramdown provision in H.R. 1106, and they have finally decided on a way to move forward. A New Democrat-sponsored secondary amendment will be offered to John Conyers' manager's amendment, and together they will account for all the concessions to the bill that the moderates appear to be requiring for their support.

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Preventing Foreclosures - Why the Delay?

March 2, 2009 - by Donny Shaw

There's something happening behind the scenes with Congress's portion of the Obama foreclosure prevention plan, but it's hard to figure out exactly what it is. Last week, the centrist New Democrats Coalition pushed for and won several changes to the bill (H.R. 1106); now there is indication that they are pushing for more changes to weaken one of the central provisions.

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House Addresses Foreclosures (Floor Amendments)

February 25, 2009 - by Donny Shaw

The House of Representatives on Thursday will place their vote on a major housing and mortgage reform bill, the Helping Families Save Their Homes Act, that has been in the works for months. This is the "cram-down" bill, which would allow bankruptcy judges to modify mortgages for homeowners facing foreclosure. It's basically the bill that was negotiated with Citigroup back in January.

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Frank Seeks New Conditions for Bailout Money

January 11, 2009 - by Donny Shaw

As leaders in Congress continue to work out the details of the economic stimulus package with President-elect Barack Obama, congressional Democrats are pushing to attach new strings to the second $350 billion of financial bailout money. This week, the TARP Reform and Accountability Act, which was introduced last Friday by Financial Services Committee Chairman Barney Frank (D-MA), will be the subject of a committee hearing and, if time allows, will be brought in front of the full House for debate and voting. It would add new oversight provisions to the financial bailout program and set aside a portion of the money to be used for foreclosure prevention.

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Progress for Foreclosure Prevention Measure

January 8, 2009 - by Donny Shaw

Atrios and Yglesias point out the absurdity of news reports tonight that Citigroup has reached a deal with members of Congress to let bankruptcy judges alter troubled mortgages. I agree; and I suppose there are two stories here, then - that Congress may finally pass this major foreclosure prevention policy into law this session and that the media now takes corporate control of lawmakers as a given. Here's the story as reported by Congress Daily ($): >Citigroup Inc. agreed Thursday to cha...

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