Mortgage lending

Amendment #534 (Mortgage “Cramdown” Amendment) to Wall Street Reform and Consumer Protection Act of 2009

hmoroz — Thu, 17 Dec 2009 12:13:16 -0500

Legislation

The middle class

Supports

Video Summary

Injustice Facts

Number of properties on which foreclosure notices were filed in 2008: 2,330,483

Percentage increase in foreclosure notices between November 2008 and November 2009: 18

Number of foreclosures likely in the next five years, according to the Center for Responsible Lending: 13 million

Proportion of homes where owners are underwater, owing more on their mortgage than their property is worth: Nearly 1:4

Number of homes that the Center for Responsible Lending estimates will be saved from foreclosure by the bankruptcy modification provision: 800,000

Average decrease in the property value of each home in the neighborhoods surrounding the foreclosures that are likely to occur in 2009, in dollars: 7,200

Overview/Summary

Middle Class Position Analysis

The Middle Class Supports. Even as the economy has stabilized in recent months, the housing and job markets have worsened, middle-class families have continued to lose equity in their homes, and households are less able to afford abusive mortgages with exorbitant interest rates. The federal government and the mortgage industry’s continued failure to address the subprime mortgage and foreclosure crisis adequately could result in as many as 13 million foreclosures during the next 5 years. Despite widespread calls for action to confront the crisis, foreclosures increased 81% in 2008. Although the administration’s Home Affordable Modification Program seeks to modify 3-4 million mortgages, only 4 percent of the 700,000 trial modifications made so far have been made permanent. Voluntary mortgage modifications by lenders and banks, encouraged by policymakers in place of comprehensive federal action, have failed to make mortgages more affordable and prevent widespread foreclosures.

Extending the same bankruptcy protections to primary residences that currently apply to luxury yachts and vacation homes is not only fair, but will reduce foreclosures by about 20%, according to Credit Suisse, and benefit about 800,000 households, according to the Center for Responsible Lending. Strengthened bankruptcy protection is also beneficial to middle-class families who are not themselves facing foreclosure: foreclosures in 2009 will result in a $502 billion decline in property values for homes in neighborhoods surrounding those foreclosures, with an average decrease in property value per home of $7,200. Preventing foreclosures in those neighborhoods will keep property values up, benefiting all households. Indeed, an analysis by the Center for Responsible Lending found that similar legislation would avoid 600,000 foreclosures and thus maintain $72.5 billion in wealth for families not facing foreclosure. Modification of mortgages in bankruptcy will help maintain property values, while keeping middle-class families in their homes, limiting the self-reinforcing spiral of foreclosures and falling home prices.

Additionally, the bankruptcy provision provides a powerful incentive to banks to offer homeowners affordable loan modifications in order to avoid costly bankruptcy proceedings over which they have little control.

Quotes from Experts

Beyond this Bill

Additional Resources

“A Tax-Free Foreclosure Solution: Loan Mods Through the Courts,” from the Center for Responsible Lending

Testimony of Adam J. Levitin, Georgetown Associate Professor of Law, on the Helping Families Save Their Homes in Bankruptcy Act, before the House Judiciary Committee

MakingHomeAffordable.gov, an Obama administration site with information about mortgage modification programs

Amendment #534 (Mortgage “Cramdown” Amendment) to Wall Street Reform and Consumer Protection Act of 2009

hmoroz — Thu, 17 Dec 2009 12:13:16 -0500

Legislation

The middle class

Supports

Video Summary

Injustice Facts

Number of properties on which foreclosure notices were filed in 2008: 2,330,483

Percentage increase in foreclosure notices between November 2008 and November 2009: 18

Number of foreclosures likely in the next five years, according to the Center for Responsible Lending: 13 million

Proportion of homes where owners are underwater, owing more on their mortgage than their property is worth: Nearly 1:4

Number of homes that the Center for Responsible Lending estimates will be saved from foreclosure by the bankruptcy modification provision: 800,000

Average decrease in the property value of each home in the neighborhoods surrounding the foreclosures that are likely to occur in 2009, in dollars: 7,200

Overview/Summary

Middle Class Position Analysis

Quotes from Experts

Beyond this Bill

Additional Resources

“A Tax-Free Foreclosure Solution: Loan Mods Through the Courts,” from the Center for Responsible Lending

Testimony of Adam J. Levitin, Georgetown Associate Professor of Law, on the Helping Families Save Their Homes in Bankruptcy Act, before the House Judiciary Committee

MakingHomeAffordable.gov, an Obama administration site with information about mortgage modification programs

Amendment #534 (Mortgage “Cramdown” Amendment) to Wall Street Reform and Consumer Protection Act of 2009

hmoroz — Thu, 17 Dec 2009 12:13:16 -0500

Legislation

The middle class

Supports

Video Summary

Injustice Facts

Number of properties on which foreclosure notices were filed in 2008: 2,330,483

Percentage increase in foreclosure notices between November 2008 and November 2009: 18

Number of foreclosures likely in the next five years, according to the Center for Responsible Lending: 13 million

Proportion of homes where owners are underwater, owing more on their mortgage than their property is worth: Nearly 1:4

Number of homes that the Center for Responsible Lending estimates will be saved from foreclosure by the bankruptcy modification provision: 800,000

Average decrease in the property value of each home in the neighborhoods surrounding the foreclosures that are likely to occur in 2009, in dollars: 7,200

Overview/Summary

Middle Class Position Analysis

Quotes from Experts

Beyond this Bill

Additional Resources

“A Tax-Free Foreclosure Solution: Loan Mods Through the Courts,” from the Center for Responsible Lending

Testimony of Adam J. Levitin, Georgetown Associate Professor of Law, on the Helping Families Save Their Homes in Bankruptcy Act, before the House Judiciary Committee

MakingHomeAffordable.gov, an Obama administration site with information about mortgage modification programs

Wall Street Accountability and Consumer Protection Act

hmoroz — Thu, 17 Dec 2009 11:24:17 -0500

Legislation

The middle class

Supports

Video Summary

Injustice Facts

Percentage of delinquent loans originated by IndyMac, which failed in the summer of 2008, that required either very little or no documentation: 81.9

Estimated total support made available by the federal government to the financial system since 2007: $23.7 trillion

Year in which Goldman Sachs paid its highest bonuses ever: 2007

Year in which Goldman Sachs is expected to break this record: 2009

Total federal TARP funds used to bail out Goldman Sachs Group: $10 billion

Number of homes the Center for Responsible Lending estimates could be saved by court-supervised modifications of mortgages in bankruptcy: 800,000

Overview/Summary

Middle Class Position Analysis

Middle Class Supports. The economic and financial crisis has demonstrated that the current financial regulatory system permits banks, mortgage brokers and servicers, and other firms to enrich themselves at the expense of ordinary Americans. Abusive and fraudulent mortgages sold to unsuspecting homeowners fueled the housing crisis while credit card companies used deceptive billing practices to mire cardholders in debt. The federal government leaped into action to assist the financial services industry when firms like AIG, Morgan Stanley, and Citigroup were at risk. The $700 billion TARP program and trillions of dollars more in cheap loans and guarantees have nurtured the financial services sector back to health, profits, and gigantic compensation packages. Meanwhile, middle-class Americans continue to face foreclosure and abusive lending and credit card practices in addition to extended bouts of unemployment.

The Wall Street Reform and Consumer Protection Act’s creation of a Consumer Financial Protection Agency is a critical innovation to protect ordinary Americans from deceptive and abusive lending practices. While consumers are currently guarded from faulty products like toasters, no single agency is tasked with overseeing the financial products and services – from credit cards to mortgages and student loans – that Americans rely on every day to earn a middle-class standard of living. The CFPA will be empowered to root out products and services that are harmful to aspiring middle-class and middle-class Americans. It will promote equal access to safe credit products and root out harmful ones like certain subprime mortgages, abusive credit card practices, and usurious payday loans. The Agency is critical to making the financial services sector work for ordinary Americans. The Mortgage Reform and Anti-Predatory Lending Act, which is included in the bill, also takes important steps to combat and end the abusive lending practices at the root of the financial crisis.

The legislation’s increased regulation of executive compensation, improved protections for investors, and expanded oversight of derivatives all address factors – compensation structures that encouraged excessive risk taking, fraudulent investment practices like Bernard Madoff’s Ponzi scheme, and opaque derivatives contracts – that contributed to the financial crisis. These steps will help ensure that similar practices do not precipitate another crisis.

The Financial Services Oversight Council, the regulatory powers granted to the Council, and the dissolution authority included in the legislation make the development of a financial threat into an agent of financial and economic destabilization less likely. By regularizing a process for oversight of financial markets and creating a mechanism for regulators to impose capital, leverage, and other standards on at-risk firms, the legislation significantly enhances the federal government’s capacity to stem an outbreak of instability before it begins. Most importantly for middle-class Americans, this process and the dissolution authority created by the legislation rely on assessments of the largest financial firms for funding. Thus, if future bailouts become necessary, they are much less likely to use taxpayer dollars.

Quotes from Experts

Beyond this Bill

Additional Resources

Americans for Financial Reform

“Financial Regulatory Reform,” from the House Financial Services Committee

“Consumer Financial Protection Agency,” from the Consumer Federation of America

Wall Street Accountability and Consumer Protection Act

hmoroz — Thu, 17 Dec 2009 11:24:17 -0500

Legislation

The middle class

Supports

Video Summary

Injustice Facts

Percentage of delinquent loans originated by IndyMac, which failed in the summer of 2008, that required either very little or no documentation: 81.9

Estimated total support made available by the federal government to the financial system since 2007: $23.7 trillion

Year in which Goldman Sachs paid its highest bonuses ever: 2007

Year in which Goldman Sachs is expected to break this record: 2009

Total federal TARP funds used to bail out Goldman Sachs Group: $10 billion

Number of homes the Center for Responsible Lending estimates could be saved by court-supervised modifications of mortgages in bankruptcy: 800,000

Overview/Summary

Middle Class Position Analysis

Quotes from Experts

Beyond this Bill

Additional Resources

Americans for Financial Reform

“Financial Regulatory Reform,” from the House Financial Services Committee

“Consumer Financial Protection Agency,” from the Consumer Federation of America

Wall Street Accountability and Consumer Protection Act

hmoroz — Thu, 17 Dec 2009 11:24:17 -0500

Legislation

The middle class

Supports

Video Summary

Injustice Facts

Percentage of delinquent loans originated by IndyMac, which failed in the summer of 2008, that required either very little or no documentation: 81.9

Estimated total support made available by the federal government to the financial system since 2007: $23.7 trillion

Year in which Goldman Sachs paid its highest bonuses ever: 2007

Year in which Goldman Sachs is expected to break this record: 2009

Total federal TARP funds used to bail out Goldman Sachs Group: $10 billion

Number of homes the Center for Responsible Lending estimates could be saved by court-supervised modifications of mortgages in bankruptcy: 800,000

Overview/Summary

Middle Class Position Analysis

Quotes from Experts

Beyond this Bill

Additional Resources

Americans for Financial Reform

“Financial Regulatory Reform,” from the House Financial Services Committee

“Consumer Financial Protection Agency,” from the Consumer Federation of America

Consumer Financial Protection Agency Act of 2009

hmoroz — Tue, 04 Aug 2009 12:05:27 -0400

Legislation

The middle class

Video Summary

Injustice Facts

Overview/Summary

Middle Class Position Analysis

Quotes from Experts

Beyond this Bill

Additional Resources

Consumer Financial Protection Agency Act of 2009

hmoroz — Tue, 04 Aug 2009 12:05:27 -0400

Legislation

The middle class

Video Summary

Injustice Facts

Overview/Summary

Middle Class Position Analysis

Quotes from Experts

Beyond this Bill

Additional Resources

Consumer Financial Protection Agency Act of 2009

hmoroz — Tue, 04 Aug 2009 12:05:27 -0400

Legislation

The middle class

Video Summary

Injustice Facts

Overview/Summary

Middle Class Position Analysis

Quotes from Experts

Beyond this Bill

Additional Resources

Helping Families Save Their Homes in Bankruptcy Amendment of 2009

hmoroz — Fri, 01 May 2009 14:24:08 -0400

Legislation

The middle class

Supports

Video Summary

Injustice Facts

Number of properties on which foreclosure notices were filed in 2008: 2,330,483

Percentage increase in total properties on which foreclosure notices were filed since 2007: 81

Number of foreclosures likely between 2009 and 2012, according to Credit Suisse: 8.1 million

Proportion of all households with a mortgage that will lose their home to foreclosure: 1:6

Number of homes that the Center for Responsible Lending estimates will be saved from foreclosure by the bankruptcy modification provision: 800,000

Average decrease in the property value of each home in the neighborhoods surrounding the foreclosures that are likely to occur in late 2008 and in 2009, in dollars: 8,667

Overview/Summary

Middle Class Position Analysis

Middle-Class Supports. As the economy and the housing and job markets worsen, middle-class households continue to lose equity in their homes and are less able to afford their mortgage payments. The difficulty is compounded for those locked into predatory mortgages with high interest rates. The federal government and the mortgage industry’s continued failure to address the foreclosure crisis adequately could result in as many as 8.1 million foreclosures by 2012. Despite widespread calls for action to confront the crisis, foreclosures increased 81% in 2008. Voluntary mortgage modifications by lenders and banks, encouraged by policymakers in place of comprehensive federal action, have failed to make mortgages more affordable and prevent widespread foreclosures.

Extending the same bankruptcy protections to primary residences that currently apply to luxury yachts and vacation homes is not only fair, but will reduce foreclosures by about 20%, according to Credit Suisse, and benefit about 800,000 households, according to the Center for Responsible Lending. Strengthened bankruptcy protection is also beneficial to middle-class families who are not themselves facing foreclosure: the 2.4 million subprime foreclosures that the Center for Responsible Lending predicts will occur in 2009 will result in a $352 billion decline in property values for homes in neighborhoods surrounding those foreclosures, with an average decrease in property value per home of $8,667. Preventing foreclosures in those neighborhoods will keep property values up, benefiting all homeowners. Indeed, an analysis by the Center for Responsible Lending found that similar legislation would avoid 600,000 foreclosures and thus maintain $72.5 billion in wealth for families not facing foreclosure. Modification of mortgages in bankruptcy will help maintain property values, while keeping middle-class families in their homes, limiting the self-reinforcing spiral of foreclosures and falling home prices.

Quotes from Experts

Beyond this Bill

Additional Resources

“A Tax-Free Foreclosure Solution: Loan Mods Through the Courts,” from the Center for Responsible Lending

Testimony of Adam J. Levitin, Georgetown Associate Professor of Law, on the Helping Families Save Their Homes in Bankruptcy Act, before the House Judiciary Committee

FinancialStability.gov, the U.S. Treasury’s site with details about the President’s Homeowner Affordability and Stability Plan

Mortgage lending

Amendment #534 (Mortgage “Cramdown” Amendment) to Wall Street Reform and Consumer Protection Act of 2009

Legislation

The middle class

Video Summary

Injustice Facts

Overview/Summary

Middle Class Position Analysis

Related Blog: Header

Quotes from Experts

Related Blog: Text

Beyond this Bill

Related Blog: Link

Additional Resources

Amendment #534 (Mortgage “Cramdown” Amendment) to Wall Street Reform and Consumer Protection Act of 2009

Legislation

The middle class

Video Summary

Injustice Facts

Overview/Summary

Middle Class Position Analysis

Related Blog: Header

Quotes from Experts

Related Blog: Text

Beyond this Bill

Related Blog: Link

Additional Resources

Amendment #534 (Mortgage “Cramdown” Amendment) to Wall Street Reform and Consumer Protection Act of 2009

Legislation

The middle class

Video Summary

Injustice Facts

Overview/Summary

Middle Class Position Analysis

Related Blog: Header

Quotes from Experts

Related Blog: Text

Beyond this Bill

Related Blog: Link

Additional Resources

Wall Street Accountability and Consumer Protection Act

Legislation

The middle class

Video Summary

Injustice Facts

Overview/Summary

Middle Class Position Analysis

Related Blog: Header

Quotes from Experts

Related Blog: Text

Beyond this Bill

Related Blog: Link

Additional Resources

Wall Street Accountability and Consumer Protection Act

Legislation

The middle class

Video Summary

Injustice Facts

Overview/Summary

Middle Class Position Analysis

Related Blog: Header

Quotes from Experts

Related Blog: Text

Beyond this Bill

Related Blog: Link

Additional Resources

Wall Street Accountability and Consumer Protection Act

Legislation

The middle class

Video Summary

Injustice Facts

Overview/Summary

Middle Class Position Analysis

Related Blog: Header

Quotes from Experts

Related Blog: Text

Beyond this Bill

Related Blog: Link

Additional Resources

Consumer Financial Protection Agency Act of 2009