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Bad Senate, Good House

May 1, 2009

Yesterday, the Senate voted in favor of 1.7 million foreclosures.  On a brighter note, the House passed the Credit Cardholders Bill of Rights by a whopping 357-70.

The Senate voted 51 – 45 against an amendment to S. 896, the Helping Families Save Their Homes Act of 2009, which would have lifted the ban on judicial mortgage modifications.  As we’ve noted before, allowing bankruptcy courts to modify mortgages helps both families in bankruptcy and others whose lenders fear a court-supervised modification.  This legislation was the best way to encourage mortgage holders to make modifications, which they haven’t been doing voluntarily.  Furthermore, the bill would have saved $300 billion in home equity for the millions of families living in neighborhoods with foreclosures.

That’s why the rationale behind the “No” votes is so flimsy.  Opponents claimed that they were concerned the action would raise rates for the 96% of citizens who will never file bankruptcy.  In fact, many more than the 4% who file would have been helped by the bill.  But, as one consumer advocate puts it, the vote “was perhaps a stark reminder of the clout the financial services industry continues to have in Washington and the work it will take to get good consumer protection legislation passed into law.”

All Republicans opposed the bill, along with twelve Democrats (Senators Baucus, Byrd, Specter, Bennet (CO), Lincoln, Nelson (NE), Carper, Dorgan, Johnson, Landrieu, Pryor, and Tester).  You can see the full list here, as well as send an email to your Senators about their position.  (We’ll be setting up a webform to do this shortly.)

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