Bankers own Senate; Democrats screw homeowners

(Huff Post)
Legislation that would have allowed bankruptcy judges to renegotiate mortgages for homeowners was successfully filibustered yesterday.

So not only will mortgage bankers and neighborhoods (and the broader economy) have to deal with a new glut of foreclosed homes, but families will also be booted into the street while others will have to go through bankruptcy too, but still lose their homes.

Only 45 Senate Democrats voted Thursday to oppose the banking industry and pass legislation aimed at stemming foreclosures. The bill would have allowed bankruptcy judges to allow homeowners who met strict conditions to renegotiate mortgages -- a process known as cramdown. It would have only applied to mortgages entered into before 2009.

Earlier in the week, the measure's lead proponent, Sen. Dick Durbin (D-Ill.), concluded that banks "frankly own the place."

Of course, the 11 Democrats who voted "no" have a more charitable view of their own motivations. So we asked them what their reasoning was. In their own words, here is how (those we could find) explained their vote:

Byron Dorgan (D-N.D.): "A number of things. I thought the 31 percent is an arbitrary number. I think there are a whole lot of folks, are likely folks, out there who have little debt outside their home who could -- I just thought it was an arbitrary number and I didn't like the way it was constructed."

Dorgan is referring to the percentage of a person's income that a judge could determine should be dedicated to paying the monthly mortgage. The figure is roughly in line with what financial analysts agree is appropriate.

Is Durbin right? Do banks own the Senate?

"I don't know who he's speaking about," said Dorgan. "He worked on this for a long, long time. And I wish they would have found a way to reach an agreement that would have allowed the legislation to get through...I don't know the context of which he said that."
(continue reading...)