Yesterday, David and I both blogged about passing mortgage related bankruptcy reform in the stimulus package (see David's post and my post). The specific legislation we are seeking to include in the stimulus is, in the House, HR 225 from Representative Brad Miller and, in the Senate, S 61 from Dick Durbin. The legislation will allow bankruptcy judges to re-write mortgages according to current home values rather than inflated "bubble" values, thus allowing hundreds of thousands, possibly millions, of people to keep their homes over the next two years. It is good legislation that will help lots of real people, and start putting the country back on track toward a post-bubble economy.
Here is the state of play on this legislation:
Senator Durbin is leading the charge to have the legislation included in the stimulus package. Considering his Senate position (ranking behind only Reid) and his close relationship with President-elect Obama, and that he is reportedly taking the inclusion of this legislation in the Senate as his personal mission, there is a good chance he can succeed. However, at this time, there is no definitive word that he has succeeded.
In the House, Brad Miller is basically a one-man campaign for this bill. Representative Miller and his staff are basically the only people around and available for this campaign. He is out-resourced by the opponents of the bill, as the next bullet point discusses.
In late 2007, Miller's bill was defeated by an alliance of Blue Dogs and the banking and realtor lobbies. At the behest of the National Association of Realtors, which gives more money to congressional candidates than any other PAC in the country, and which has 28 people working on the Hill full time as either lobbyists or researchers, sixteen Blue Dogs sent a letter to the House leadership asking them to spike the bill. The end result was that the bill was delayed, severely watered down, and ultimately deemed insufficient by the bill's sponsor, Brad Miller. There is every reason to expect a similar effort will be attempted to spike the bill this time around. And, as I already noted, the realtors and their Blue Dog lackeys have a lot more resources than Dick Durbin and Brad Miller, who are operating this campaign almost entirely by themselves.
To prevent this attempt to pass mortgage related bankruptcy reform, and thus a partial repeal of the odious Bankruptcy Bill of 2005, the strategy is simple: try to get as many Representatives and Senators supporting the inclusion of this legislation in the stimulus as possible. However, recognizing the relatively small size of our activist base here on Open Left, we can't just expect readers here to call their members of Congress, and the end result to be that enough members feel sufficiently pressured from their constituents to back the inclusion of this legislation in the stimulus. Instead, we have to be more selective in our targets, and choose carefully where we target our pressure.
So, my first idea is for Open Left readers to try and get all of our Better Democrats, for whom we raised money in 2008 and who are now members of Congress, to become sponsors of the bill and support its inclusion in the stimulus. Donna Edwards (MD-04) and Alan Grayson (FL-08) are already sponsors of H.R. 225, so they are spoken for. However, there are five members of the House and Senate from the Better Democrats page that have not yet sponsored either HR 225 (if they are House members) or S 61 (if they are Senators). Here are those four, along with the phone numbers of their Washington, D.C. offices:
The idea behind targeting these five is that, even though few of us are constituents of these five members of Congress, most of us can call as donors to one or more of these five members of Congress.
So, please, politely contact one of these five, and leave a message asking for to become a co-sponsor of either HR 225 (for House members) or S 61 (for Senators). Additionally, urge them to support the inclusion of this legislation in the stimulus package. If they ask for your constituent information and you are not a constituent, indicate that you were a donor to the 2008 campaign of that member of Congress.
Don't worry about it being after hours in D.C. If no one answers, leave a message-it will still be heard. Also, remember that we are entering a new era in D.C. where pressure like this can actually work. For example, Obama shelved his stimulus business tax cut proposal today, after Senators and grassroots alike raised their voice. Hopefully, we can get a few more sponsors for these bills as a result of this action. If it works, we can more onto more targets.
Senator McCain’s general election campaign depends even more on his national security and foreign policy experience, his claim that he’s ready to be commander in chief. McCain has traveled the world, he knows the leaders.
When Bhutto was assassinated, McCain said he knew Pakistan President Pervez Musharraf personally, and could get him on the telephone. The United States picks up the tab for more than a quarter of Pakistan’s total military spending. The president of Pakistan is probably going to take our president’s call.
There's been a tremendous discussion going on here with regards to potential VP choices for Barack Obama. While many of the more conventional names have been thrown out there, including Kathleen Sebelius, Janet Napolitano, Wesley Clark, Chris Dodd, Bill Richardson, Joe Biden, Jim Webb, Sherrod Brown, there has been less discussion of other individuals less prominent in national Democratic politics but might be a better fit for an Obama campaign, and (hopefully) an Obama presidency. After all, is there any better way to demonstrating a commitment to change than reaching beyond other Senators and Governors, and into the back bench of the House and out into the military, academia and other backgrounds?
I don't know that much about what Atrios lovingly refers to as Big Shitpile. I assume most of what's going on is blame and bailouts for who stole what, and since the money has already stolen and divvied up it can't be easily returned except through new tax policies. But there is some stuff Congress can do to help homeowners, and it's worth asking the question why that's not happening. There's HR 3609, which lets a Bankruptcy judge help you if your mortgage is larger than the value of your house. Right now a judge can't do anything about that. It's a ridiculously simple bill, and liberals even compromised and said it only applies to loans that originated after 2000.
So why is it being held up? Two reasons.
One, the single issue groups behind it are politically inept. The Consumer Federation of America, the National Association of Consumer Bankruptcy Attorneys, and the Center for Responsible Lending all back this bill, and have done approximately nothing to get press or to build political support behind the biggest economic issue this cycle. Maybe it's because they are not optimized for political or advocacy work, or maybe it's because they are unstrategic. Regardless, a bit of real infrastructure and organizing capacity here would go a long way.
Two, the Bush Dogs don't want this bill moved and are bottling it up.
Thanks to Paul Blumenthal and the Sunlight Foundation for sponsoring and putting together this forum.
Brad Miller is a Congressman, and a genuine blogger. He became a blogger in 2005, when Congress, which had never heard anything about the Bankruptcy Bill designed to undermine the poor for the benefit of credit card companies except praise from lobbyists for passing it, got pilloried by internet communities. Liberal and conservative blogs, and groups like Moveon exploded in frustration at this blatant ripoff of the public. Miller noticed, and began reading blogs and participating in these communities. He blogged angry, violating the cardinal rule of blogging, he spoke at Yearlykos in 2006 as a blogging expert, and he is one of us both as a progressive and a blogger.
Unlike most of us, though, Miller is a Congressman on the Financial Services Committee. And he's trying to work on the subprime mortgage mess caused by many of the same financial elites who pressed the Bankruptcy Bill. He's going to be around with Rep. Linda Sanchez tomorrow, here and at Dailykos. Today he was at TPM discussing the bill with Elizabeth Warren and Hale Stewart (Bonddad).
When I asked around early this year about what Congress could do to help middle class families escape foreclosure, a couple of bankruptcy judges suggested that Congress could just let bankruptcy courts modify home mortgages the same way bankruptcy courts can modify mortgages on family farms.
So Linda and I introduced a bill that would do just that. If the mortgage exceeds the value of the home, the court can limit the debt secured by the home to the value of the home and treat the rest as unsecured. And the court can then set a term of up to thirty years and an interest rate of prime plus a couple of points for risk-still a subprime loan, but not a predatory loan.
According the CRL, the legislation would make it possible for 600,000 or so families to save their homes from foreclosure. The chief economist for Moody's thinks that's an exaggeration-probably only 500,000 families would save their homes under the legislation.
Okay, so let's get started.
Go over to TPM and have a look. And come back tomorrow at 11am to hear from Brad Miller and Linda Sanchez.
Matt Stoller and The Sunlight Foundation have organized a live blog tomorrow at TPMCafe about the foreclosure epidemic from 11:00 to 12:00. We'll talk about the legislation that Linda Sanchez (D-California) and I introduced to allow bankruptcy courts to modify predatory mortgages.
I've blogged a bit on mortgage reform, noting that Bush Dogs are trying to block changes to the Bankruptcy Bill out of fealty to their corporate donors. The housing crisis is hitting swing areas like Florida's central corridor viciously, so getting on this topic as the economy becomes one of the two top issues in 2008 is extremely important for Democrats going into 2008.
One of the reasons the situation is so messed up is that mortgage brokers have an incentive to lie and steal from their clients. This is couched in a complicated term called the 'yield spread premium'. What this basically means is that if you are a mortgage broker and you get a client to take a loan that costs more than it should, with higher penalties and interest rates, you get a kickback from the bank.
Ergo, lots of people got crappy loans they can't afford. It hurts minorities disproportionately, and it's bad for everyone. There's more detail here and here. The Democrats are trying to do something about it and ban the practice, but mortgage brokers have organized and are phoning Congress off the hook because apparently stealing is profitable. And now, Barney Frank is considering axing the change because the groups pushing for the change - NAACP, the Urban League, La Raza AARP, the AFL-CIO and SEIU - probably didn't expect this to be a major point of contention.
If you have a moment, write your representative and ask him/her to support HR 3915, the "Mortgage Reform and Anti-Predatory Lending Act of 2007."
It's fucking ridiculous that Congress doesn't stand up to the mortgage industry after they have ripped off millions of borrowers and are in the midst of destroying communities all over the country. Write your rep.
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