For a few months, I had been advocating for the Conyers/Chabot mortgage reform bill. It would have allowed judges to renegotiate harmful subprime mortgages in order to prevent future home foreclosures. It would have cost the U.S. Treasury nothing, and would have helped millions of struggling American families. Democrats in Congress decided to dump the proposal for a bi-partisan approach that will.....wait for it....give out more tax rebates. Apparently our government's answer to everything is tax rebates.
Today, the Senate overwhelmingly passed a compromise bill with Republicans that will do nothing to help the 900,000 families facing foreclosure. From the NY Times:
The measure passed by an impressive 84-12 vote, but even its supporters acknowledge it's tilted too much in favor of businesses such as home builders and does little to help borrowers at risk of losing their homes.
The plan combines large tax breaks for homebuilders and a $7,000 tax credit for people who buy foreclosed properties, as well as $4 billion in grants for communities to buy and fix up abandoned homes.
The measure, titled the Foreclosure Prevention Act, will be significantly redrawn by House critics who say it favors businesses such as home builders instead of borrowers.
Luckily, we have stronger progressive voices in the House. Hopefully House Democrats like John Conyers will demand a stronger bill that addresses the subprime mortgage lending abuses. Over 40% of home foreclosures are subprime mortgages even though the percentage of subrime loans with adjustable rate mortgages only make up 6.8% of all mortgages. The Foreclosure Prevention Act needs to be challenged. Would you please take a moment and call your Reps and ask them to push for real mortgage reform that will regulate the subprime industry? Go here to contact your Representative. Thanks.