Remember When Senate Conservatives Tanked Cramdown Legislation?

On Thursday, April 29, 2009, the Senate defeated, 45-51, Brad Miller's Cramdown legislation, which had already passed the House (234-191), dooming the country to the financial and economic catastrophe we're suffering through now. Not a single Republican voted for it-- and 11 conservative Democrats crossed the aisle to vote with the GOP, including three who are up for reelection next year: Ben Nelson (NE), Jon Tester (MT), and Tom Carper (DE). Just thought I'd mention it. I'll also mention that almost all two dozen Democrats in the House who voted with the GOP on this were subsequently defeated for reelection, although Jim Matheson (Blue Dog-UT), Ron Kind (WI), Larry Kissell (NC), and Dan Boren (Blue Dog-OK) managed to survive... so far.

Saturday AlterNet made the best attempt to date to get out the real story of OccupyTheBoardroom, reprinting 9 Angry, Heart-Breaking Messages to Wall Street's Elites From the 99%. Joshua Holland's compendium begins with a photograph of half a dozen well-heeled securities traders sipping champagne on a balcony high over Zuccotti Park as they look down on the Occupation below, "capturing," he writes, "the haughty detachment with which Big Finance has received this rapidly spreading expression of popular outrage."

Charlotte, North Carolina is the second largest banking center in the United States after NYC, home to Bank of America and East Coast headquarters for Wells Fargo. It was also the home of Wachovia before they went belly up in 2008. One of the most poignant letters AlterNet published, "My Father's Hands," was written by a woman in North Carolina named Liza.

Like you I’m from the Tar Heel state so I thought I’d tell you my story. A couple of years ago my father died waiting for a liver transplant. It was an ugly, horrible death and left me parentless while still in my 20s. My brother and I inherited the small ranch-style house my father worked his whole life to pay off. (Our mother died during our childhoods.) I wanted to take care of my father’s money so I invested it. Six months later I had lost over half of it when the crash happened. I lost half of my father’s life savings because of the corrupt practices of Wall Street. My father worked his whole life. He was the 11th child of a sharecropping family and was sent to the cotton fields before he was ten. He completed high school but there was no money for college so he went to work at blue-collar jobs which he used to support us his whole life. 

When I think of the money I lost, I think of my father’s hands. I think of his broken, scarred hands that built a home and future for me. It wasn’t just money that Wall Street stole. Futures, trust, hard work and respect-- those are the things Wall Street corruption has stolen from the American People, not just money. I don’t think everyone on Wall Street is corrupt, but the system is, and I want to do my part to correct it, even if it’s just writing a letter like this. I owe my father that. Mr. Bowles, I hope you do your part too. Because of your position, you are a powerful person in our society. So I ask you, how will you use your power? What will your legacy be?

Brad Miller is North Carolina's best Member of Congress. Respected on both sides of the aisle, his gentlemanly demeanor makes his relentless battle on behalf of ordinary American families seem more palatable to his more conservative colleagues. A senior member of the House Financial Services Committee, it is Brad who leads the charge on half of consumers, small businesses and those the banksters see as prey. Brad is one of only 3 House incumbents endorsed by Blue America this year. He was a guest at Crooks and Liars earlier this month and you can read the Cliff Notes version here. Yesterday Brad sent me an interview he had done with Alex Ulam at The Nation, Why a Mortgage Cramdown Bill Is Still the Best Bet to Save the Economy.

Ulam isn't of the school that puts the whole blame for our financial mess on George Bush and the Republican policies Congress was able to enact before 2008. "Much of the blame for the country’s current economic woes," he wrote, "lies with the Obama administration’s failure to forcefully tackle the biggest threat to the American economy today: the housing crisis." The power of the Wall Street (and Charlotte) banksters over Washington is prohibitive, or, as Congressman puts it, "There seems to be an unstated but perhaps conscious policy of not forcing them [banks] to recognize losses. And almost everything that we can do to help the balance sheet problems for households-- to help reduce household debt-- would require the banks to recognize losses.”

When Senator Barack Obama was running for president he told voters that he would support legislation to allow homeowners to get relief in bankruptcy court. The legislation would have repealed a bankruptcy provision that prohibits modifications of mortgages on a primary residence. “I will change our bankruptcy laws to make it easier for families to stay in their homes,” he told voters at a campaign rally in September 2008, describing the bankruptcy exemption for mortgages as “the kind of out-of-touch Washington loophole that makes no sense.”

Today cram-downs make even more sense than they did in 2009. The various bank proprietary loan modification programs and the government-sponsored loan modification programs are widely acknowledged to be failures for not helping enough homeowners and also for having high re-default rates. But one of the biggest unmitigated disasters about these programs is that homeowners who have succeeded in obtaining loan modifications actually have become mired in more debt. That is because instead of reducing homeowners overall debt, these loan modification programs have focused on lowering monthly payments on a homeowner’s primary mortgage by reducing interest rates and extending the term of the loan. In 2010, nearly 95 percent of active, permanent loan modifications resulted in homeowners’ actually owing more debt on their homes than before the modification according to a Congressional Oversight Panel report.

The reason that we don’t have cram-downs is that the banks lobbied heavily against the 2009 bill. They said it would further destabilize home prices and that they would have to raise interest rates to account for the risk of underwater homeowners’ having their mortgages modified in a bankruptcy. They also argued that bankruptcy reform would create a “moral hazard” by rewarding irresponsible borrowers who took out mortgages that they couldn’t afford.

The misleading message on cram-downs that stuck in the minds of many voters came from CNBC host Rick Santelli. It was Santelli’s 2009 rant about cram-downs that launched the Tea Party. “This is America!” Santelli told cheering traders on the floor of the Chicago Mercantile Exchange, “How many of you people want to pay for your neighbor’s mortgage that has an extra bathroom and can’t pay their bills?”

In contrast to candidate Obama, President Obama was conspicuously silent on cram-downs. According to ProPublica, Treasury Department staffers actually cautioned lawmakers against the bankruptcy reform legislation. Unfortunately for underwater homeowners, although the cramdown legislation passed Congress in March 2009, it was defeated the following month in the Senate by a vote of 45 to 51. Georgetown Law School professor Adam Levitin, who has written extensively on cram-down legislation, says that Obama’s lack of support doomed the bill. “Had Obama put his weight into it, it would have passed,” says Levitin, “It would have been a fight, but he was too chicken to have the fight.”

“The principal objective of the Obama administration and the Bush administration before that was to let the banks avoid taking immediate losses,” says Democratic Representative Brad Miller of North Carolina, who sponsored the cram-down bill, “The bankruptcy law change was incompatible with that, it would have required the banks to recognize a lot of losses immediately and might very well have revealed some of them to be very nearly insolvent or actually insolvent.”

...Aside from propping up the country’s largest banks, there’s very little reason not to pass bankruptcy reform. In contrast to the Obama administration’s Home Affordable Modification Program, under which the taxpayer is partially footing the bill, court ordered mortgage cram-downs would cost the federal government nothing. Indeed, cram-down legislation requires no government bailouts or financial incentives for lenders or for borrowers. The 2009 CBO cost estimate of the proposed cram-down legislation shows that the federal government actually would have made money on the bill through the increase in bankruptcy filing fees.

...The argument that cram-downs would have rewarded irresponsible borrowers is also misleading. Chapter 13 Bankruptcy is not a get-out-of-debt-free option. It requires borrowers to live on a court-monitored budget for three to five years. Further, in many parts of the country, there are Americans who owe more than twice as much on their mortgages as their homes are worth. Many of these people are victims of predatory lending and appraisal fraud. The most authoritative official report that we have on the events that led to the 2007 meltdown, the Financial Crisis Inquiry Commission’s final report cites widespread instances of predatory lending during the housing bubble. For example, the commission’s report discusses how the quality assurance department of New Century, once the nation’s second-largest subprime lender, found evidence of predatory lending, legal and state violations and credit issues in 25 percent of the mortgages that they audited. Yet instead of reforming the company’s business practices, New Century executives dissolved their quality assurance department and terminated its personnel.

In addition to potentially helping millions of Americans get back on track, bankruptcy reform actually would have benefited the entities that own most of the outstanding secured mortgage debt in this country-- Fannie Mae, Freddie Mac, pension funds and private investors. “Investors recognize that a 20 or 30 percent principal write down creates re-performance,” says Joshua Rosner, managing director at Graham Fisher & Co, a company that advises investors, “and it beats absolutely a 70 percent plus loss in a default.”

Even one of the major unstated reasons for not passing the bankruptcy reform bill, protecting the nation’s largest banks, no longer holds water. Failure to pass the cram-down legislation has not in fact saved the banks from their travails. Bank of America, the nation’s largest bank, is going wobbly due in large part to its continuing problems with mortgage meltdown. If the cram-down legislation had passed and BoA had failed as a result, then so be it. Millions of Americans facing foreclosure would have had a much better shot at saving their homes, and that would have been a much bigger boon to the overall economy than bailing out the banks.

Congressman Miller participated in the early planning stages of OccupyRaleigh. You'd expect that from someone who told us that "the Obama Administration faced a choice between helping homeowners who could afford a mortgage on their home, but not the one they had, and helping the biggest banks pretend to be solvent until they could earn their way back in the game. The two were incompatible: an effective response to the foreclosure crisis would require the banks to recognize losses on their mortgage assets, especially second liens at the biggest banks. I think we took the wrong road, and that has made all the difference."

And when asked about Obama's strange statement last month that there were no laws broken and no crimes committed by the banksters, Brad didn't hesitate to politely disagree with the President:

The allegations in civil lawsuits by private mortgage investors and insurance companies, if true, appears pretty clearly to be of criminal conduct. I've struggled with the issue of politics and criminal prosecutions. I think calls for "perp walks" can sound like an appeal to mob rule, but not prosecuting powerful people in the face of clear evidence of criminal conduct is a real problem for democracy. I think some may have discouraged prosecutions because they feared for our fragile banking system, but I fear for our fragile democracy if people believe that the powerful are immune. I think the lack of criminal prosecutions or even aggressive civil lawsuits has offended the sense of justice of many Americans, including me.

If you'd like to help Brad stay in Congress, you can do that here at a special Blue America page dedicated to incumbents worth holding onto. The GOP-controlled North Carolina legislature gerrymandered his district to try to make sure the banksters would have one less watchdog to contend with. Brad intends to thwart their plans.

Why Did Jane Harman And So Many Other Corporate Shills Flip Flop And Vote Against Foreclosure Reform?

Jane Harman represents the status quo

Funny that Obama was willing to posture against the Wall Street banksters and their nefarious lobbyists in his radio address this morning, but stopped short at going after the shamelessly corrupt Democrats who weakened the bill so badly and the 27 who voted with the Republicans against it.

While applauding House passage Friday of overhaul legislation and urging quick Senate action, Obama expressed frustration with banks that were helped by a taxpayer bailout and now are "fighting tooth and nail with their lobbyists" against new government controls... The president also told CBS' 60 Minutes that "the people on Wall Street still don't get it. ... They're still puzzled why it is that people are mad at the banks. Well, let's see. You guys are drawing down $10, $20 million bonuses after America went through the worst economic year ... in decades and you guys caused the problem," Obama said in an excerpt released in advance of Sunday night's broadcast of his interview.

...No House Republicans voted for the bill, and 27 Democrats voted against it. Opponents argue that the broad legislation overreaches and would institutionalize bailouts for the financial industry.

The Senate, Housing and Urban Affairs Committee is working on its own version of the package.
In his address, Obama contended that the worst economic downturn since the Depression wouldn't have happened if the rules governing Wall Street been clearer and enforcement tougher.

Obama singled out Republicans and industry lobbyists for trying to block the changes.

Last week, top House Republicans urged more than 100 financial industry lobbyists to work harder to defeat the bill. Lobbyists have spent more than $300 million this year trying to scuttle the bill.

As we reported over the course of Thursday and yesterday, the House passed, 223-202-- without a single Republican vote-- a package of reforms to prevent the kinds of abuses that would have inevitably led to another Wall Street meltdown. A coalition of corrupt, conservative Democrats in thrall to the banking industry, primarily Blue Dogs, formed a coalition with the Republicans to water down the legislation significantly. And one of their most insidious accomplishments was their ability to strip "cramdown" out of the bill entirely.

Cramdown (the Helping Families Save Their Homes Act of 2009 had passed the House last March-- only to be defeated a month later in what Dick Durbin famously called the bank-owned Senate. A dozen conservative Democrats like Blanche Lincoln, Mark Pryor, Arlen Specter, Mary Landrieu, Tom Carper and, of course, Ben Nelson had joined with the entire GOP to defeat the Obama-backed House legislation that was meant to allow bankruptcy court judges to reset some mortgage terms to help families save their homes from foreclosure. At the time of the House vote we tried to show why even some Republicans in foreclosure-plagued districts broke ranks with their party's obstructionist leadership to vote for the bill. Joined by unlikely new convert Ron Paul, three of them were still onboard Friday, Ileana Ros-Lehtinen (R-FL), Walter Jones (R-NC) and Mike Turner (R-OH), one of 9 co-sponsors of the amendment. Mario Diaz-Balart was back to his comfort zone/default position of rubber stamping GOP leadership decisions, while his brother Lincoln ducked the vote altogether. Mike Castle (R-DE), now in a tough race for the GOP nomination for an open Senate seat in Delaware-- and under attack by teabaggers for being too "moderate"-- flip-flopped, and voted against the provision this time.

Among the Democrats my first surprise came that the amendment was actually introduced by arch-Blue Dog Jim Marshall of Georgia. True, his own constituents have been catastrophically hit by mortgage foreclosures but he rarely lets little things like that get in his way of opposing the aspirations of working families. This time he actually sounded almost as much like a Democrat as his two colleagues who pushed it most aggressively, progressives John Conyers and Zoe Lofgren. Marshall:

“This amendment strikes an appropriate balance that is good for debtors, creditors, taxpayers, financial institutions along with all of the innocent homeowners that have been dragged into this mess. And it will not increase the future cost of home credit. It’s a rare win, win, win.

Lofgren sounded a more populist note by pointing out that "the only people who have not been helped in this economic crisis are homeowners. This legislation would finally give American homeowners the same protection that large corporations enjoy.” But, predictably is was Conyers who gave voice to the full scope of why America needs this legislation:

“Over the past three years, millions of Americans have lost their homes through foreclosure and millions more are at risk of losing their homes. Relying solely on taxpayer-financed incentives to encourage the lending industry to voluntarily resolve our nation’s foreclosure crisis has proven to be woefully inadequate. Thankfully there is an answer. Today, several of my colleagues and I have introduced an amendment to H.R. 4173, the “Wall Street Reform and Consumer Protection Act of 2009,” that will give American families facing foreclosure a critical lifeline by which to save their homes. Our amendment-- which won’t cost taxpayers a single penny-- will allow a homeowner under the supervision of a bankruptcy judge to extend a mortgage’s repayment term; reduce excessive high interest rates and exorbitant hidden fees; and, under certain limited circumstances, allow the principal amount of the mortgage to be adjusted to the home’s fair market value.

Our amendment rectifies an anomaly in current law that allows virtually every other type of secured obligation to be modified, except for home mortgages. Most importantly, my amendment will help stop the endless cycle of foreclosures that lead to abandoned homes in communities across our nation and that, in turn, cause neighborhood property values and tax revenues to further decline. I am hopeful that passing this amendment will send the signal that the House feels strongly that this provision must be passed into law to help resolve the ongoing mortgage crisis.”

Alas, though, in March only 24 conservative Democrats voted with the GOP against working families, Yesterday it was a staggering 71! Let's look at one particularly slimy flip-flopper: California Blue Dog Jane Harman.

Harman, through a marriage to a rich, elderly industrialist, is one of the two or three wealthiest members of Congress. Her Los Angeles district, CA-36, includes some very wealthy neighborhoods-- and some very poor ones. There have been 7,526 foreclosures so far and it is estimated that within the next 4 years that number will rise to 25,053. Yesterday, on the same day she joined the Republicans to vote against mortgage reform, Harman-- who is in a battle of political survival with grassroots reformer Marcy Winograd-- sent this expression of compassion and faux empathy to her constituents:

I am well aware of the anxiety many constituents feel when out of work and unable to find a job. There’s the scramble to cover the month’s rent, provide food and make tuition or car payments-- and for some, feelings of depression and questions of self worth. There are currently 2.3 million jobless Californians-- 620,000 in Los Angeles County-- more than at any time in the past three decades. Getting people back to work is urgent-- and vital if what is at present only an “asset” recovery is to become a true economic recovery.

Recall where the economy was at the start of this year: foreclosures were at record levels, bank lending was frozen, and nearly $10 trillion in wealth had been lost as the stock market spiraled out of control. In just three months, 2 million Americans lost their jobs.

While some economic indicators are improving, South Bay residents have certainly felt the pinch. Trade at the Ports of LA and Long Beach is down 21 percent, idling 20,000 longshore workers, truckers and warehouse workers. And across the board, our local communities have seen unemployment rates shoot dramatically upwards.

...Though it wasn’t the only cause of the economic crisis, inadequate financial regulation also contributed to the problem. This week the House voted on H.R. 4173, the Wall Street Reform and Consumer Protection Act, which is intended to overhaul the financial regulatory system. For the first time, credit default swaps will be regulated, many predatory lending practices will be outlawed and credit rating agencies will be held accountable. The government will increase the reserves big banks must set aside, monitor firms that are so large and interconnected that their collapse would endanger the financial system and establish a process for reorganizing and dismantling failing institutions. These changes are critical safeguards against the kind of irresponsible business practices that helped trigger the credit crisis. This legislation also establishes a new federal consumer agency, which to me is problematic. I worry that another government reorganization will not work.

She forgot to mention that she voted against the "cramdown" legislation that Obama said he needed to address the predatory mortgage abuses. But she did tell voters that she has a jobs bulletin board on her website and that if you can't find work you can always volunteer for something!

I managed to track down Marcy Winograd this morning and ask her if she would be a different kind of representative for the South Bay than Harman. (I admit that I have an idea that she will be but I wanted to hear it in her own words.)

We want representatives who truly represent us, working men and women-- not Wall Street or million-dollar CEOs spending weekends on their yachts. Once again, however, my Blue Dog opponent, who also voted for the mean-spirited bankruptcy bill, sides with big corporations against the people of our district. While thousands of homeowners from West Los Angeles to San Pedro face foreclosure, not only on their home but of the American Dream, Harman votes to slam the door in their face, to essentially kick them out of their living room. Why should banks receive billions in bail-out money, refuse to renegotiate home loans, and then get a pass in bankruptcy court? In Congress I will work to strengthen the Progressive Caucus, to work with progressive caucuses in each state party, so that together we can create the political will to successfully reintroduce the amendment.   I want to ensure working families, the American middle class, can renegotiate their home loans to enjoy a stable and secure future in their living room.

Everything Marcy has done in her life leads me to believe that that statement represents the kind of congressmember she will be-- way up at the top of the foodchain with principled and effective fighters like Alan Grayson, Donna Edwards, Dennis Kucinich, Jerry Nadler, Raul Grijalva and Barbara Lee. That's why I never hesitate in asking DWT readers to go to the Bad Dogs page and donate to Marcy's grassroots campaign to dislodge the most beatable Blue Dog in California.

Trapped in the meltdown: Oops, little relief for mortgage borrowers, 'cause the banksters don't wanna help and don't gotta help

"One of the study's coauthors . . . said the government would be better off giving the money directly to struggling borrowers to help them with their payments, rather than to lenders that are averse to working out the troubled loans. 'Loan modification is not profitable for lenders,' Willen said. 'If it were profitable, they would go out and hire staff.' "

-- from Jenifer Kim's Boston Globe report today,
"Lenders avoid redoing loans, Fed concludes"

"The problem is worse than we thought. The failure to do these modifications means the whole situation stays bad longer."

-- Rep. Barney Frank, as quoted in the Globe article

"You have more money going to the banks and the servicers than you do to the homeowners. It would make more sense to just give money to the borrowers."

-- economist Dean Baker, as quoted in the Globe article

by Ken

Well, at least now we know. All the money we've dumped into the banksters' coffers to help them renegotiate possibly salvageable mortgage loans? They were happy to accept the money, but that apparently concludes their interest in the undertaking.

Credit the Boston Federal Reserve Bank for commissioning a study to find out the truth. The undertaking doesn't seem to have any "next step," though. Apparently, all you homeowners who thought you might have a shot at holding onto your homes, uh, you can go now.

Thank goodness Congress wasn't railroaded into giving judges "cramdown" authority to revise mortgage terms the way they can rewrite other forms of debt. That would be, you know, socialism. Or something.

And oh yes, you remember that widely popularized, plausible-sounding notion that the holdup on mortgage renegotiations was that hardly any mortgages are actually held by the banks that wrote them, having been bundled and sold? In the real world, apparently not so much. Check out the last paragraph. "The Fed found no difference in the rate of aid between investor-controlled loans and those that lenders own directly."

Lenders avoid redoing loans, Fed concludes

Study cites lack of profit in aiding the distressed

By Jenifer B. McKim, Globe Staff

July 7, 2009

Mortgage lenders don't try to rework most home loans held by borrowers facing foreclosure because it would probably mean losing money, a study released yesterday by the Federal Reserve Bank of Boston concludes.

The Boston Fed's findings suggest the Obama administration's major effort to solve the foreclosure crisis by giving the lending industry $75 billion to rewrite delinquent loans to more affordable levels is not likely to work.

One of the study's coauthors, Boston Fed senior economist Paul S. Willen, said the government would be better off giving the money directly to struggling borrowers to help them with their payments, rather than to lenders that are averse to working out the troubled loans.

"Loan modification is not profitable for lenders," Willen said. "If it were profitable, they would go out and hire staff."

US Representative Barney Frank, head of the House Financial Services Committee, said the study results may provide answers about why so few struggling homeowners have been able to get help.

Frank, a Newton Democrat, said he is holding a hearing Thursday on his proposal to provide government loans to homeowners who have lost their jobs and can't qualify for loan modifications and other help because they don't have income.

"The problem is worse than we thought," Frank said. "The failure to do these modifications means the whole situation stays bad longer."

The Fed's study found that only 3 percent of seriously delinquent borrowers - those more than 60 days behind - had their loans modified to lower monthly payments; about 5.5 percent received loan modifications that did not result in lower payments.

The study focused on 665,410 loans that were originated between 2005 and 2007 and subsequently became seriously delinquent. It also followed about 150,000 borrowers for six months after they received help, through the end of 2008.

The lenders may have compelling reasons not to find new borrowers to help, according to the study. For example, up to 45 percent of borrowers who did receive some kind of help on their loans ended up in arrears again, the study found. Conversely, about 30 percent of delinquent borrowers are able to fix their problems without help from their lenders.

"A lot of people you give assistance to would default either way or won't default either way," Willen said. "They are trying to maximize profits, and at this point maximizing profits does not mean modifying loans."

Officials from Hope Now, the private-sector alliance of mortgage servicers and investors, were unavailable for comment yesterday.

US Treasury officials declined to comment on the Fed study, but noted in a statement that more than 240,000 homeowners have received loan modifications this year under the president's program. Moreover, federal regulators said the pace of loan modifications has been increasing steadily since last year.

Given the findings, Dean Baker, codirector of the Center for Economic and Policy Research in Washington, D.C., said Willen's suggestion to give money to borrowers rather than lenders makes sense.

The number of foreclosure proceedings increased to 844,389 during the first quarter of 2009, up 73 percent from the first quarter of 2008, according to the Office of the Comptroller of the Currency.

"You have more money going to the banks and the servicers than you do to the homeowners," he said. "It would make more sense to just give money to the borrowers."

The $75 billion Obama administration plan, announced in February, provides incentives to motivate companies that service mortgages to make loans more affordable, including $1,000 bonuses for each modified loan and an additional "pay for success" fee of $1,000 a year for three years if borrowers stay current on their new terms.

Willen said the success bonus could have the unintended effect of steering loan servicers away from those who need help the most, and toward only those borrowers most likely to recover on their own anyway. He said that if modifications increase, it won't be by much. "My guess is they are going to help people who are OK, and they are not going to help people who are deep trouble," he said.

Alan White, a professor at Valparaiso University School of Law in Indiana, said lenders could cut down on the number of borrowers who end up defaulting again by giving them more help in the first place. He said too many modified loans don't result in low enough payments. Also, he said, there may be fewer borrowers who can get out of trouble on their own because of continuing difficulties in the economy.

"The servicers are making assumptions that are much too anti-modification," White said. "The servicers have the authority" to help borrowers, "they just don't want to use it."

The study, coauthored by Manuel Adelino and Kristopher Gerardi, also rebuts a widely held suspicion that the holdup in modifying loans is because of investors who control them through mortgage-backed securities. The Fed found no difference in the rate of aid between investor-controlled loans and those that lenders own directly.

#

Another Watered Down Bill To Ameliorate Foreclosures Passes-- No Big Deal, Unfortunately

Yesterday the House passed the amended (watered down) version of the Helping Families Save Their Homes Act. As usual, the Senate-- you know, that exclusive, conservative club that's owned by the banksters-- made it less friendly towards working families and more friendly for their powerful campaign contributors. The authorization for bankruptcy judges to change mortgage terms under certain circumstances has been stripped out of the bill. It's better than a poke in the eye but far less than working families distressed by predatory banksters should have expected. In fact, the Senate screwed up Conyers' original bill badly enough so that the original 234-191 passage back in March turned into an overwhelming... victory. All the slimy Blue Dogs and a shitload of Republicans who had voted no back in March, were on board yesterday.

Yep, back on March 5 only 7 Republicans voted yes (and 2 dozen, mostly slimy, Democrats, voted no). But yesterday there were only 3 Democrats who voted no-- and only one a Blue Dog-- and 123 Republicans abandoned the most extremist and obstructionist and corrupt in their caucus to cross the aisle and vote with the Democrats. It passed, overwhelmingly, 367-54-1.

The Republicans voting "no," were the usual suspects-- Todd Akin (R-MO), Michele Bachmann (R-MN), Marsha Blackburn (R-TN), Paul Broun (R-GA), John Culberson (R-TX), Virginia Foxx (R-NC), Scott Garrett (R-NJ), Jeb Hensarling (R-TX), Darrell Issa (R-CA), Steve King (R-IA), Doug Lamborn (R-CO), Connie Mack (R-FL), Tom McClintock (R-CA), Patty McHenry (R-NC), Mike Pence (R-IN), Tom Price (R-GA), Dana Rohrabacher (R-CA), Pete Sessions (R-TX), John Shadegg (R-AZ), Lynn Westmoreland (R-GA)... the whole batch of irrelevant imbeciles who always just vote against everything that would go even part way towards relieving the burdens their policies have places on working families. But it isn't the 54 who voted "no" or the 367 who voted "yes" that I want to focus on today.

Instead, it is the one member who voted "present," Marcy Kaptur, who I want to take a look at this morning. She supported the original bill, enthusiastically. Perhaps you remember the powerful and inspiring speech she made urging the victims of predatory banksters to get lawyers and fight their evictions. We asked her what changed her mind. She didn't mince words:

This is just another cosmetic bill that continues to severely disadvantage-- indeed "hollow out"-- communities impacted by huge subprime foreclosures in allowing Wall Street megabanks and their outside investor allies to buy up affected properties at a huge discount.

It allows Wall Street operatives to substantially underbid local communities in acquiring affected properties, thus severely limiting the effectiveness of the NSP. It does nothing to bring Wall Street firms to the table to achieve the necessary workouts.

She's right.



UPDATE: Senate Waters Down Two More And Sends Them To The House For Passage-- House Does As Its Told

After the Senate partially gutted the Truth in Lending Act, meant to "establish fair and transparent practices relating to the extension of credit," the House complacently agreed to their bankster-approved version in three consecutive votes. First came a general rule to consider which passed 247-180, only two Republicans crossing the aisle to lend a hand to consumers being preyed upon by crooked credit card companies. Meanwhile, 4 of the most corrupt and reactionary Democrats voted, as they always do, with the GOP: Baron Hill (Blue Dog-IN), Walt Minnick (Blue Dog-ID), Gabby Giffords (Blue Dog-AZ), and Jason Altmire (Blue Dog-PA). Two principled progressives, Raul Grijalva (D-AZ) and Caroline McCarthy (D-NY), voted "no" for the same kinds of reasons Marcy Kaptur couldn't bring herself to vote for the watered-down foreclosure bill. The House then voted 361-64 to pass the whole bill not counting Coburn's attempted poison pill (an OK to bring heavy weapons into national parks). The only Democrat voting against the bill was Stephanie Herseth Sandlin (Blue Dog-SD) whose career has been purchased by the credit card companies. And the 63 Republicans were just the regular motley crew of the worst of the worst bottom-feeders: major bribe takers like Blackburn, Boehner, Cantor, Mack, McHenry, Ryan, Shadegg, etc... the whole shameful bunch.

A few minutes later they voted specifically on Coburn's Section 512-- the NRA nonsense that the shitheads in the Senate blithely passed. Most Democrats voted against it but 195 joined 174 Republicans to allow guns into National Parks. All the most reactionary Democrats were part of that brigade-- plus anyone afraid of the right-wing media attack machine. Those who favor gun control should thank Republicans Mike Castle (DE) and Mark Kirk (IL) for joining most of the progressive Democrats in opposing this, particularly Democrats in tough districts who know this will be used against them, such as John Hall (D-NY), Carol Shea-Porter (D-NH), Joe Sestak (D-PA), Ben Ray Luján (D-NM), Dave Loebsack (D-IA), Loretta Sanchez (D-CA), and Gary Peters (D-MI).

When Lawrence Wilkerson said the Congress has been "spineless" he was talking about how they put up with a systemically dishonest CIA but he could just of easily have been speaking about the Democrats on domestic policy. The clip is worth watching (even if it forces you to watch the brain-dead ex-Fox nitwit, Kirin Chetry, questioning him). "I'm talking about the leadership in the Congress. This has been the most feckless Congress ever since 2000 that I’ve seen in my 65 years. I just don’t think there’s leadership over there. It’s spineless, it lacks courage, lacks political will. I shudder for the fact that we’ve got to face these economic and financial challenges we’ve got to face-- Iran, Afghanistan, North Korea and other things-- and we don’t have a Congress that has any leadership.”

We All Need Someone To Stand By Us Sometimes... But Don't Look To The U.S. Senate

I'm haunted by what Dick Durbin (D-IL), the Senate's majority whip, said about the world's most exclusive club-- that it's owned by the banksters and special interests. I mean there is no question they own the GOP. That's why there's a Republican Party; that's why there are any right-wing parties: to represent the vested interests. But what really hurts is how many Democrats have gone over to the Dark Side-- way too many.

On April 30. Senator Durbin offered an amendment in the Senate, similar to one that had already passed the House and that President Obama was eager to sign, an amendment that was meant to keep hard hit families from being foreclosed on by predatory banksters. It comes as no surprise that not a single Republican voted for it-- not even, Arlen Specter, the one who is masquerading as a Democrat-- and that a dozen shameless Democrats joined with them on behalf of their corporate paymasters to vote the bill down 45-51. Why bother working to give them more senators? It's why we should only support "better" Democrats, not "more" Democrats.

The song below is the work of people from all over the world, some of them homeless. It's very powerful and very moving and I strongly suggest you watch it. When you do, keep in mind that Republicans and reactionary Democrats are owned by interests that wouldn't give a rat's ass if you and your family wind up homeless as well.

Congress Exposed! Which Members Are Owned By The Banksters?

Early this morning we started the conversation about how pathetic it is that Harry Reid can't pass any legislation to protect consumers from predatory banksters. Obama was good on TV today denouncing the sleazy speculators who forced Chrysler into bankruptcy but someone has to get putative Democratic senators to remember that they work for their constituents, not their campaign donors. Before we get into the cramdown foreclosure catastrophe that went down in the Senate today, let's take a look at the votes in the House on Carolyn Maloney's Credit Card Bill of Rights. In the end, it passed 357-70, 105 Republicans joining every Democrat but South Dakota bribe-taking Blue Dog Stephanie Herseth Sandlin (who was also the only Democrat to vote "no" last year). On the Republican side, only the worst of the obstructionists and briber takers voted against the bill, 70 of them. The dozen ring-leaders who worked the hardest to sabotage the bill and would rather see Americans screwed by unscrupulous credit card companies than save their own constituents from predators are all owned lock, stock and barrel by the banksters:

Spencer Bachus (R-AL- $3,789,474)
Eric Cantor (R-VA- $3,121,188)
John Boehner (R-OH- $3,045,809)
Pete Sessions (R-TX- $2,730,126
David Dreier (R-CA- $2,118,538)
Jeb Hensarling (R-TX- $2,111,371)
Ron Paul (R-TX- $1,686,375)
Paul Ryan (R-WI- $1,555,321)
Randy Neugebauer (R-TX- $1,253,775)
Scott Garrett (R-NJ- $1,156,599)
Tom Price (R-TX- $901,849)
Gresham Barrett (R-SC- $786,873)

Yes, the amounts in parenthesis are the legalized bribes each of these members has taken from the banksters directly (not counting lobbying). Earlier there was an attempt to kill the bill (a motion to recommit) by the Republicans and it failed 164-263, only 16 Republicans voting with the Democrats-- and 5 Chamber of Commerce Democrats voting with the GOP.

Tom Perriello (D-VA) explained why this was such an important vote for him and his constituents in central and southern Virginia: “The movement for accountability scored a victory today against the tricks, traps and usurious greed in the credit card industry. If they can't sell the product without using traps, that's a good time for consumer protection. This bill and my amendment put in place commonsense regulations that will protect all consumers, but especially college students who are disproportionately targeted.”

If-- and this is a BIG if-- the bill passes the Senate, it would ban retroactive interest rate hikes on existing balances (except when payments are more than 30 days late), ban double-cycle billing, and ban due-date gimmicks. Specifically, it protects cardholders against arbitrary interest rate increases, and empowers them to set limits on their credit and requires card companies to fairly credit and allocate payments. It also prohibits charging fees just to pay a bill by phone, charging over-the-limit fees unless a consumer opts-in in advance or issuing credits cards to minors.

Good job, Nancy Pelosi and her team for getting this through with flying colors. Ultimately, though, it doesn't matter. As Senate Majority Whip Dick Durbin (D-IL) explained yesterday, too many senators are so beholden to the banksters that they will never make a move against them-- not even if millions of their constituents are starving and homeless. The Democrats' poor excuse for a leader, Harry Reid (D-NV) moaned and groaned about the de facto "Republican filibuster," but it was a handful of his own reactionary and bribe-besotted members who killed the bill that would have allowed bankruptcy judges to intervene with intransigent banksters and keep families in their homes. It seems beyond belief to me that any Democrat would vote against this, except, of course, a fake Democrat like Arlen Specter, who so far is still voting with his right-wing colleagues on the other side of the aisle. But Specter was hardly the only Democrat on that side of the aisle for this vote (just the one who's taken the most bribes from the banksters: $5,753,310-- which failed 45-51.

Of course every single Republican voted against consumers and for their bankster buddies. The Democrats who joined them were a motley array of anti-family conservatives (in order of corruptness):

Max Baucus (MT- $4,633,243)
Tim Johnson (SD- $3,020,966)
Ben Nelson (NE- $2,667,406)
Mary Landrieu (LA- $2,399,134)
Tom Carper (DE- $2,160,628)
Blanche Lincoln (WalMart- $1,671,292)
Mark Pryor (AR- $1,321,948)
Byron Dorgan (ND- $1,102,184)
Jon Tester (MT- $473,226)
Robert Byrd (WV- $420,830)
Michael Bennet, the appointed one-term Colorado reactionary who belongs on the other side of the chamber.

Dick Durbin lectures his corrupt, shameless colleagues: "At some point, the senators in this chamber will decide the bankers shouldn't write the agenda for the United States Senate. At some point the people in this chamber will decide the people we represent are not the folks working in the big banks but the folks working to make a living and struggling to keep a decent home." Watch:

Do The Democrats Have What It Takes To Pass Tough Legislation The Banksters Oppose?

Today is D-day on H.R. 627, Carolyn Maloney's Credit Cardholders' Bill of Rights Act of 2009 which seeks "to amend the Truth in Lending Act to establish fair and transparent practices relating to the extension of credit under an open end consumer credit plan." There are 127 co-sponsors, from across the ideological spectrum from the worst slimy, corrupt Blue Dogs (Gene Taylor and John Barrow) to the most outstanding champions of working families (Donna Edwards, Barney Frank, Jerrold Nadler, Jan Schakowsky and Gary Peters); there's even a Republican (one), Walter Jones.

Last week we looked at how systematic rip offs of consumers, using confusing techniques like overdraft "protection," help banksters steal $17.5 billion every year. Last year the House passed Maloney's Credit Card Bill of Rights Act, by a huge margin, 312-112 but it died in the Senate, like most good ideas.

Yesterday the DCCC went on the attack against Republicans, like Don Young (R-AK) who they feel will vote against the bill today. Young is a strange target since he was one of the 84 Republicans to cross the aisle and vote with the Democrats in 2008 on this. (Funny enough, a better target would be Blue Dog Stephanie Herseth Sandlin (SD) who crossed the aisle in the other direction and voted with the GOP. South Dakota has a huge credit card industry and I suppose the thinking goes that if they steal from the rest of us, it'll trickle down to Herseth Sandlin's constituents-- or at least to her campaign donors. (Yes, she raked in a startling $629,895 from the banksters since being elected to the House in 2004.) Don Young, considered one of the most corrupt members of Congress, did get slightly more out of the banksters than Herseth Sandlin did-- $689,522-- but he's been serving their interests since just after the Civil War 1973! I'm sure the DCCC knows what they're doing.

In this economy, we all know someone who has faced excessive credit card fees or an unfair interest rate hike. Tomorrow, Representative Don Young has an opportunity to show he is listening to hardworking Americans and side with consumers, rather than big credit card companies, during these tough economic times. Congress will vote on the Credit Card Holders’ Bill of Rights which protects people who work hard and play by the rules from facing unfair interest rate increases and excessive fees.
 
“In these tough economic times, when responsible consumers play by the rules, their credit card company should not be allowed to drive them deeper into debt with excessive fees and unfair interest rate hikes. The question is whether Representative Don Young has finally heard his constituents’ demands and will protect responsible families against unfair credit card fees,” said Jennifer Crider, Communications Director for the Democratic Congressional Campaign Committee. “Representative Young should stand with families trying to dig out of debt during these tough times, not credit card companies charging responsible customers excessive fees and sky-high interest rates."

The DCCC makes the valid point that H.R. 627 will protect consumers in several ways:

• Protecting against unfair interest rate increases
 
• Prohibiting excessive fees
 
• Allowing customers to set their own fixed credit limit and prohibit fees for exceeding that limit.
 
• Requiring card companies to mail billing statements 21 calendar days before the due date (up from the current 14 days) to allow enough time to pay the bill without incurring late fees.
 
• Requiring companies to credit as “on time” any payment made by 5pm local time on the due date.

Come back later today and we'll see who voted for and who voted against this bill.

More important, we'll keep an eye on the Senate, which killed this vote last time and will be voting on it today. Presumably, now there are enough Democrats in the Senate to pass it, if you count corruptionists and reactionaries like Ben Nelson, Mary Landrieu, Evan Bayh (and the rest of his anti-Obama Bloc), Blanche Lincoln and Arlen Specter as Democrats. It sounds like Harry Reid is already making excuses-- blaming Republicans-- for not passing important economic and financial legislation. I bet you've been following the "cramdown bill" that the Senate is about to take up.

Reid's #2, Dick Durbin, must have felt pushed to the very edge to have blown the whistle on his bribe-taking colleagues. "The banks own the Senate," he told a radio audience. Watch him yesterday on Ed Schultz on MSNBC yesterday:



The banksters have spent $2.2 billion in direct payoff since 1990 on buying "influence" in Congress, plus approximately an equal amount in lobbying. There are an awful lot of senators who don't want to kiss their biggest donors off. Yesterday Ryan Grim interviewed both Reid and Pelosi for the HuffPo and he came away shaking his head in despair. Reid told him he's not sure the bill has the votes "to overcome a GOP filibuster and that its key provision-- cramdown-- may have to come out." Ben Nelson, Mary Landrieu and Jon Tester have already said they plan to help the Republicans filibuster this. I guess there's a chance Reid will show us he's a leader-- but I wouldn't want to have to depend on that to keep from being evicted from my home.


UPDATE: Michael Steele Explains Who's To Blame For The Banking Crisis

Short version: "Let's do the my bad and move forward."



THE UPDATES

At 11:39 this morning the House voted-- along party lines-- for the enabling legislation on the Truth In Lending Act. It passed 249-175, every Republican opposing Truth, as usual. They were joined by one mangy Blue Dog, Baron Hill (IN), who has sucked up $856,791 in bribes from the banksters since first being elected-- then defeated, then elected again. Time for another spin of the wheel? Or does every Hoosier south of Bloomington like the idea of being hosed by their credit card companies while their congressmen gets paid off to allow it?

Meanwhile, the Senate Dems' non-leader announced that both the credt card reform and the foreclosure protection bills will probably fail. Too many members take bribes from the banksters-- way too many, and on both sides of the aisle. Every member who votes against these consumer-friendly bills, regardless of political party, should be defeated at the polls next year.

Bayh's Anti-Obama Bloc Teaming Up With Republicans At Behest Of Banksters To Stop Foreclosure Assistance

David Sirota made an ironic point last week about banks bewailing having to pay a prepayment penalty.

First, the banks: You know how it has become standard procedure for the vultures in the banking industry to try to fleece you with so-called "prepayment penalties" if you pay back your mortgage earlier than they want you to pay it back? And you know how many banks charge excessively high interest rates? Well, now, according to the Wall Street Journal, the same banking industry is claiming the federal government is trying to charge excessive interest rates via a "prepayment penalty" when the banks pay back their bailout funds and  - and that banking industry is actually complaining about the situation.

Irony on irony, David missed the fact that the worthless banksters are using taxpayer bailout money to lobby members of Congress whom they routinely bribe with immense campaign "contributions" ($2.2 billion since 1990) to let them off the hook when it comes to living up to their end of the deal.

And as long as we're piling on the irony, imagine my disappointment when Senate Banking Committee member Jon Tester (D-MT) started behaving very much like the crooked reactionary he replaced in 2006, Conrad Burns, by coming out against the bankruptcy legislation that seeks to keep homeowners from being foreclosed on. "I just think a deal's a deal. I have a lot of empathy for folks who tend to get led astray, but I just think it's going to create some problems-- pretty obvious, actually. I don't have to list them. I'm generally opposed. I don't think it works well." The banksters must be laughing their asses off. And we find out that Jon Tester is no Gary Peters (D-MI), the courageous member of the House Financial Services Committee who threw their "deal's a deal" bullshit back into the faces of the contemptible banksters and their congressional protectors:

“In my Congressional district in Michigan, there are thousands of UAW employees who have employment contracts, and they’ve been told they need to renegotiate those contracts and make concessions to justify taxpayer investments. There are thousands of white collar employees with employment contracts who have forgone promised bonuses and benefits and have taken pay cuts in order to save the companies they work for. People are sick of this double standard where working class and middle class workers are treated differently than the financial industry executives.”

I don't understand why members of the Banking Committee are allowed to take blatant-- if legalized-- bribes from the banksters. By the standards of the banksters, Tester didn't get much loot from them, but, even so $73,765 is nothing to sneeze at, which is what the banksters gave him last year. No committee members should be allowed to vote on this kind of legislation if they accept "contributions" from the industries they are responsible for overseeing. That would make voting a lot easier, especially on the corrupt Senate Banking Committee. These were the payoff for 2008 for each member:

Chris Dodd (D-CT), Chairman- $6,031,918
Jack Reed (D-RI)- $1,120,655
Tim Johnson (D-SD)- $864,318
Richard Shelby (R-AL)- $567,899
Bob Corker (R-TN)- $432,558
Mel Martinez (R-FL)- $425,100
Robert Menendez (D-NJ)- $409,050
Jim DeMint (R-SC)- $346,418
Mike Crapo (R-ID)- $255,685
Kay Bailey Hutchison (R-TX)- $227,529
Sherrod Brown (D-OH)- $223,369
Robert Bennett (R-UT)- $222,349
David Diapers Vitter (R-LA)- $194,350
Jim Bunning (R-KY)- $123,262
Jon Tester (D-MT)- $73,765
Chuck Schumer (D-NY)- $43,800
Daniel Akaka (D-HI)- $35,000
Evan Bayh (D-IN)- $10,950
John Warner (D-VA)- $6,950

So that means the only members who should be permitted to vote are Herb Kohl (D-MN), Jeff Merkley (D-OR) and Mike Johanns (R-NE) since the three of them-- and only the three of them-- ran for election and didn't accept any money from banksters. They're the only ones not financially compromised by organizations like, for example, the National Association of Federal Credit unions which voted unanimously last Tuesday to oppose the proposal, which would allow bankruptcy judges to reduce mortgage principle and interest rates for certain distressed homeowners.

CREW has done a report on one of the most repulsive varieties of banksters, the payday lenders and their efforts to gain influence with Congress. The report shows that "the payday loan industry is following the familiar path already cleared by other industries suddenly confronted with congressional oversight.  Payday lenders have joined the ranks of defense contractors, investment funds and others who influence the legislative process through lavish political contributions, expensive PR campaigns, and strategic lobbying." The chart below shows the most perps from the latest election cycle:


Meanwhile, Matt Renner reports at Truthout that a "handful of Democratic senators have joined with Republicans and industry lobbyists to oppose the measure, stalling the bill's progress." Thursday night the Bayh anti-Obama bloc voted with the Republicans to kill the president's cap and trade approach to cleaning up the environment and combating climate change. Apparently Bayh and his treacherous followers-- what Rachel Maddow dubbed the Conservadems intend to collaborate with the Republicans to wreck the change agenda. The bill Tester declared his opposition to, judicial loan modification, or "cram down" provision of S. 61 - the Helping Families Save Their Homes in Bankruptcy Act of 2009 - would empower bankruptcy judges to adjust a borrower's mortgage during bankruptcy proceedings. Currently, a bankruptcy judge can change the terms of other debts such as mortgages on vacation homes, liens on boats and credit card debt, but cannot touch primary residence mortgages. What Tester and the other Conservadems oppose is ordinary working families getting a break for a change. I expect it from a swine like Lincoln, Nelson or Bayh but for Tester to throw his lot in with these reactionary creeps is a real blow.

According to consumer advocacy groups, the judicial loan modification power would compel banks and their middlemen to work with borrowers to adjust unsustainable mortgages before bankruptcy and would help to reduce the growing wave of foreclosures sweeping the country.

I wonder how long it will be before ads like this one that was launched against filthy Blue Dog Marion Berry-- by Democrats-- will be running against senators like Tester, Lincoln and other Democrats who have gone over to the Dark Side: