While including mortgage modification powers in bankruptcy court to prevent foreclosures sounds like a great idea, here are a couple other bills introduced last week to address economic stress points and help Americans rebuild their lives faster once the economy gets better.
Both of them were sponsored by Dianne Feinstein in the Senate and referred to the Senate Banking, Housing, and Urban Affairs Committee. I have to give her major credit for putting out what sound like smart, forward-thinking bills on a first read. Both of them also make use of the (I think rightly) maligned TARP appropriation such that the rest of it might not be a total waste.
Unfortunately, she doesn't presently sit on the Banking Committee, so I review this legislation with somewhat limited expectations that it will see the light of day.
S 73, HR 37 A bill to establish a systematic mortgage modification program at the Federal Deposit Insurance Corporation, and for other purposes. This bill proposes to use TARP funds to offer mortgage lenders a deal whereby the government agrees to secure a portion of potential losses provided that they conduct a systematic review of their current mortgages. They would then renegotiate those loans where the home values are less than the mortgage value or that are past due. Loan adjustments up for renegotiation include reductions on rates or fees, forbearance of principal and extension of loan timeframe. Tests are included to ensure that the government's money would be invested wisely, but I suppose we'd have to see the scoring to measure the effect.
HR 37 was sponsored by Maxine Waters and has 11 cosponsors, it's been referred to the House Committee on Financial Services. The Senate version has no cosponsors, though I don't see the downside of avoiding all those cases in bankruptcy court.
S. 116 To require the Secretary of the Treasury to allocate $10,000,000,000 of Troubled Asset Relief Program funds to local governments that have suffered significant losses due to highly-rated investments in failed financial institutions. It would authorize the Treasury Secretary to help out city and county governments whether or not the highly-rated institutions they lost their shirts investing in had received any TARP help.
This bill had no corollary that I could spot in the House and no cosponsors, so it seems unlikely to get far, but it sounds like a great idea. I can get behind restoring the budget for Philly's public libraries in a way that I never would be able to thrill over the rescue of AIG.
Anyway, they look good. Nothing like a reminder that even Democrats who are annoying on some issues are probably with progressives on others.
