The White House said they would veto it, and some Republicans said they would not support it. ‘It’ is the legislation proposed in the Housing Bill drafted by Democrats. Now Republican leadership has said they want to redraft something that can work….meaning get through a vote. Senator Dodd of CT(D) and Senator Shelby of Alabama(R) are the ranking members of the Senate Banking, Housing and Urban Affairs Committee. They are now charged with the task of coming up with a compromise Bill, supposedly by the light of day tomorrow. You can read about it here in Lori Montgomery’s Washington Post article.
One of the genuine, philosophical differences, is how much money the Federal Government should pay to correct/support housing and lending issues. The more conservative view is it’s a budget drain best not legislated. The less conservative side would say the issue is a crisis and certain things warrant Federal monies in a crisis. Political jockeying aside that is, I would rather deal with the issues here not the politics of it.
One real stickler for The Administration and Republicans is the bankruptcy provision of this Bill. It would allow bankruptcy judges the ability to renegotiate, take the house out of a bankruptcy, assign better terms and monthly payments. It seems to me as if this would apply to people who received sub prime or predatory loans and may or may not only include first time home buyers. Like anything else involving economics, not everyone agrees on what the outcome would be if this provision goes through. The argument that interest rates will go up is countered by other bankers and economists. I did find one fairly substantive article at The Crypt. By substantive, I mean it did more than just state there was opposition, it went into some of the whys. The article talks about how the bankruptcy provision was already re-worked so that it includes this:
”….narrowing it to apply only to struggling sub-prime borrowers who took out their loans sometime between 2002 and the end of 2007. The substitute language includes a means test to see if homeowners qualify for a bankruptcy modification. It also would place limits on what judges could do in modifying a loan….”
One key provision to what could be a final bill would be the truth in lending portion holding mortgage lenders more accountable. No, this probably would not stop the predatory issue, since anytime there is money involved you can be someone is trying to figure out a way to scam or beat the system. This provision doesn’t seem to be generating as much opposition.
Anyway, the vote to come up with a compromise Bill and allow debate on it passed 94-1 (with Jim Bunning from KY being the only no vote!)
Peace Out -3C
0 responses so far ↓
1 Sharon // Apr 2, 2008 at 12:56 pm
Oh I’ll be watching this carefully. All this doom and gloom is nerve wracking for people like us considering a move and new purchase in a state hard hit by all of this. I’m sure we’re not alone and we all need to feel some confidence that help is on the way to hopfully stabilize things!
Thanks for the heads up Carole!
2 Carole Cohen // Apr 2, 2008 at 1:04 pm
Sharon hi! I’m just cautiously optimistic – because they seem to indicate in the POST article that Rep and Dem leadership seems to want to work together in general now, not just on this issue……bipartisanship, who knew! (I hope it’s true). Btw, as a buyer here you will be in better shape than if you were a seller, not that this is any comfort if you need to sell there too. Has your daughter made a decision on colleges? What an exciting time!
3 Dems and Reps Working Together on Housing Bill Compromise? at Sub Prime on The Finance World For News and Information Around The World On Finance // Apr 4, 2008 at 1:08 am
[...] Dems and Reps Working Together on Housing Bill Compromise? It seems to me as if this would apply to people who received sub prime or predatory loans and may or may not only include first time home… [...]
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