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April 03, 2008

Senate rejects important Durbin amendment on bankruptcy

Bad news. Tonight, the U.S. Senate tabled (defeated) on a 58-36 vote (the pro-consumer vote is NAY) an important amendment by Majority Whip Dick Durbin (D-IL) that would have given bankruptcy judges limited authority to help 600,000 families avoid foreclosure and stay in their homes. The critical amendment was supported (our joint letter) by a wide range of consumer, community and civil rights groups including U.S. PIRG. Excerpt from our letter:

It will give bankruptcy judges, within guidelines set by Congress, the narrow authority to modify some harmful mortgages marketed by non-traditional sub-prime lenders in recent years, in order to provide families with a chance to save their homes from foreclosure.
The Durbin proposal (originally Title IV of S. 2636, the Foreclosure Prevention Act) was offered as an amendment to HR 3221, pending legislation serving as the vehicle for broader housing legislation that generally gives a lot of money to the mortgage and housing industry, but fails to help families. Here is a statement put out after the vote by many of the groups that signed the above letter.

(I got back from the hill too late to sign U.S. PIRG on, but we agree.)

Senate Throws Out Single Most Needed Step to Help Millions of American Families Keep Their Homes

Joint Statement from Civil Rights, Consumer, & Housing Groups

"The Senate Housing package misses the single most significant step needed to help the 20,000 American families with subprime loans that are losing their homes each week through foreclosure: the bankruptcy amendment.

We are left with a bill loaded with special considerations for mortgage companies and builders that does very little for homeowners who were sold predatory loans by mortgage lenders.

Any final bill hammered out between the U.S. House and Senate that is a serious effort to stem the foreclosure crisis must include meaningful relief to families to modify their mortgage in bankruptcy. Bankruptcy relief will stabilize communities, keep more than half a million families in their homes and provide lenders at least as much income as they would receive through foreclosure.

As the Senate bill stands, we will continue to see foreclosures tear down communities and wipe out the most important source of financial security that most Americans have.

We are encouraged that there is recognition that the bill under consideration by the U.S. Senate today is only part of the solution. Without bankruptcy relief, Congress will be condemning hundreds of thousands of American families this year to losing their homes."
Center for Responsible Lending

Leadership Conference on Civil Rights

ACORN

American Federation of Labor and Congress of Industrial Organizations

Consumer Action

Consumer Federation of America

Consumers Union

Lawyers' Committee for Civil Rights Under Law

NAACP Legal Defense & Educational Fund, Inc.

National Association of Consumer Advocates (NACA)

National Association of Consumer Bankruptcy Attorneys

National Consumer Law Center

National Association of Neighborhoods

National Community Reinvestment Coalition

National Council of La Raza

National Fair Housing Alliance

Opportunity Finance Network

Service Employees International Union (SEIU)

Posted by Ed Mierzwinski at April 3, 2008 06:01 PM

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