As Jane Hamsher and Kagro X have already noted, a deal on "cramdown" bankruptcy legislation appears to have been forged. And I am happy to report that, rather than the fake compromises of the last eight years where Democrats and / or progressives get next to nothing while Republicans and / or conservatives get 95% of what they want, this deal seems to be a true compromise where both sides can legitimately claim victory. From CQ:
House Democratic leaders reached an agreement Tuesday on a compromise version of the "cramdown" provision in broad mortgage legislation that is expected to be on the floor this week.
The controversial provision would allow bankruptcy judges to modify the mortgages on the primary residences of homeowners who are in jeopardy of foreclosure, but only as a last resort.(...)
In negotiations that picked up steam Monday and continued throughout much of the day Tuesday, Speaker Nancy Pelosi, D-Calif., met with representatives of the business-oriented New Democrat Coalition and Senate staff to hash out a deal that would allow a bankruptcy judge to cut the principal on a homeowner's mortgage, lower the interest rate and extend the duration.(...)
Among the changes is a requirement that a homeowner seeking protection in bankruptcy court must convince the judge he or she has made sufficient efforts to complete a loan modification through the Obama administration's voluntary refinancing program. Judges would also be required to consider interest rate reductions lowering the monthly mortgage payment to no more than 31 percent of the borrower's income before considering a principal reduction.
I had been pretty hard on Democratic opponents of the original bill, but right now I am feeling alright:
While I am not thrilled that a "compromise" was required on this legislation, the actual concessions that were required seem pretty light. Effectively, the changes don't seem to either stop or narrow cramdown, but simply delay it by making prospective recipients go through a few hoops first. As such, I can understand the positive comments in the article quoted above from Representatives such as Zoe Lofgren, Barney Frank, and Brad Miller, all of whom I trust on this matter. The substance of cramdown remains intact.
The deal appears to have been made with Senate staff, as much as it was made with the New Dems. To me, this is actually the most optimistic part of the deal. Passing this legislation through the Senate was always a longshot, but if this deal was forged with Senate staff, then maybe we can actually get decent legislation passed into law. Overall, I can live with it. If it passes the Senate without further modifications, then I am very happy.
It appears that the New Democrats, the Obama administration, and the Democratic House leadership will all be selling this compromise. As such, if any Democrats vote against this legislation, then they are really crossing over into hopeless, pro-Republican, pro-Wall Street territory.
Clearly, given that she was able to hold up the legislation, and forge a new deal altogether, this is a big victory for Representative Ellen Tauscher. At the same time, the changes seem light enough that the original proponents of the plan, including Representatives John Conyers and Brad Miller, can also claim victory. This is perhaps a true compromise. I might change my mind as more details come to light, but I think tonight that there is reasont o be optimistic.
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