Congressional Democrats Reveal How President Obama Broke Pledge to Force Banks to Help Homeowners

[Better Believe It]

Dems: Obama Broke Pledge to Force Banks to Help Homeowners
by Paul Kiel and Olga Pierce
ProPublica, Feb. 4, 2011

Before he took office, President Obama repeatedly promised voters and Democrats in Congress that he'd fight for changes to bankruptcy laws to help homeowners-a tough approach that would force banks to modify mortgages.

Bankruptcy judges have long been barred from lowering mortgage payments on primary residences, though they could do it with nearly all other types of debt, even mortgages on vacation homes. Obama promised to change that, describing it as exactly "the kind of out-of-touch Washington loophole that makes no sense."

But when it came time to fight for the measure, he didn't show up. Some Democrats now say his administration actually undermined it behind the scenes.

"Their behavior did not well serve the country," said Rep. Zoe Lofgren (D-CA), who led House negotiations to enact the change, known as "cramdown." It was "extremely disappointing."

Instead, the administration has relied on a voluntary program with few sticks, that simply offers banks incentives to modify mortgages. Known as Home Affordable Modification Program, or HAMP, the program was modeled after an industry plan. The administration also wrote it carefully to exclude millions of homeowners seen as undeserving.

Please read the full article at:

http://www.propublica.org/article/dems-obama-broke-pledge-to-force-banks-to-help-homeowners

[yourout]

1. Republican lite indeed.

[Hell Hath No Fury]

2. HAMP did pretty much ZIP for homeowners -

No where near the 2 million he said it could help. It was almost impossible to qualify and then the loan modeifications weren't generous enough for most people to retain their homes even after modification. :(

[ladjf]

3. That's our President. nt

[Dappleganger]

4. That's what happens when you get in bed with big business...

they tell you sweet little lies while fucking everyone else.

[femrap]

5. I'm not

surprised. He does as he is told by Wall Street. Face reality. It's not what he says, it is what he does.

For some of you, this has come as a True Betrayal.

Remember that old saying: "If you're not part of the solution, you're part of the problem?"

[Fumesucker]

6. K&R, thanks for posting..

[ProSense]

7. "Congressional Democrats had long been pushing a bill to enact cramdown...

From the OP article:

<...>

Congressional Democrats had long been pushing a bill to enact cramdown and were encouraged by the fact that Obama had supported it, both in the Senate and on the campaign trail.

They thought cramdowns would serve as a stick, pushing banks to make modifications on their own.

<...>

When Obama unveiled his proposal to stem foreclosures a month after taking office, cramdown was a part of the package <4>. But proponents say he’d already damaged cramdown’s chances of becoming law.

<...>

After narrowly passing the House, cramdown was defeated when 12 Democrats joined Republicans <6> to vote against it.

<...>

The list of Democrats who voted against the bill:

Baucus (D-MT)
Bennet (D-CO)
Byrd (D-WV)
Carper (D-DE)
Dorgan (D-ND)
Johnson (D-SD)
Landrieu (D-LA)
Lincoln (D-AR)
Nelson (D-NE)
Pryor (D-AR)
Specter (D-PA)
Tester (D-MT)

[Better Believe It]

8. Obama aims for sharp drop in gov't-backed mortgages

Obama aims for sharp drop in gov't-backed mortgages
February 4, 2011

(Reuters) - The Obama administration has plans to reduce the role of government backed mortgages, including Fannie Mae and Freddie Mac to less than 50 percent of the market from a dominant role today, CNBC reported on Friday.

Treasury spokesman Steven Adamske said he could not confirm that figure, though he said the administration does consider the government's current role in housing to be too high.

"We are looking at how to transition from a government having too big a footprint in the marketplace to one that has the private sector playing the dominant role" in the mortgage market, Adamske said in response to a question about the CNBC report.


http://www.reuters.com/article/2011/02/04/us-usa-housing-idUSTRE70R80420110204