I wanted to come directly to the Daily Kos community and tell you why I decided to support Obama’s TARP proposal. I ran for the Senate to fight for working families, and this resolution delivered an excellent opportunity to do exactly that.
From the moment we were notified of the pending vote, I worked night and day to convince the Obama team to dedicate a large chunk of the funds directly to working families for mortgage relief. Millions of working families have already lost their homes and millions more are behind on their payments. It is time that Congress and the President immerse themselves in assisting these families.
Direct mortgage relief does three things. First, it restores the financial foundation for a family by replacing a scam mortgage with a fixed-interest 30-year loan at a fair rate. Second, if a family is on solid ground and can keep their home, it strengthens the neighborhood; empty foreclosed homes have a terrible effect on communities. Third, when a family is in a better position to make payments, or a loan is paid off, it strengthens the financial institution or pension fund that owns that loan.
I believe that direct mortgage relief is essential to save millions of families from going down the tubes and is also essential to restore the economy.
So I spent the last several days arguing this case at the highest levels of the Obama team, meeting with and calling repeatedly Rahm Emanuel and Larry Summers, and talking once directly to our incoming President, as well as consulting with mortgage guru Professor Blinder and the Center for Responsible Lending. I asked for a strong multi-dimensional program to directly address families in troubled mortgages. Several other freshman senators, including Tom and Mark Udall, joined in this effort and made an impact on the administration’s outlook.
The Obama team heard us. Mostly. You saw an evolution from the FDIC $25 billion plan to the possibility of doing $40-50 billion to the final commitment in writing to a minimum of $50 billion and up to $100 billion.
In addition, the Obama team committed to support bankruptcy reform, which is extremely important. Currently a judge can adjust the mortgage features for second homes (and yachts and planes and commercial investments) for the rich, but are barred from adjusting the mortgage interest rates or terms for mortgage loans held by working families. That’s outrageously unfair.
Here is Obama’s commitment:
"The Obama Administration will commit substantial resources of $50-$100 billion to a sweeping effort to address the foreclosure crisis. We will implement smart, aggressive policies to reduce the number of preventable foreclosures by helping to reduce mortgage payments for economically stressed but responsible homeowners, while also reforming our bankruptcy laws and strengthening existing housing initiatives like Hope for Homeowners."
Depending on the design of the program, Obama’s "sweeping effort" could save 2-6 million families from financial ruin. I supported the resolution in support of winning a better life for those 2-6 million working families. Now we have to work with the Obama team and hold their feet to the fire. I intend to do exactly that.