White House Urges Passage of Cramdown After Cramdown Bill Fails
Monday, May 04, 2009 at 5:47 pm
Lotta good that did.
The Obama administration last Friday issued an official statement in support of mortgage lending reforms that would allow some struggling homeowners to avoid foreclosures by filing for bankruptcy — an option that’s prohibited under current law. Too bad for housing advocates and imminent foreclosure victims, the statement arrived a day after the Senate voted to kill a bill — sponsored by Sen. Richard Durbin (D-Ill.) — that would have provided the bankruptcy changes the White House endorses.
The oddly timed statement is just the latest evidence that the Obama White House, while claiming to support the bankruptcy reforms, also hasn’t gone out of its way to see that they’re passed. A New York Times editorial calls out the administration today:
The Obama administration sat by last week as 12 Senate Democrats joined 39 Senate Republicans to block a vote on an amendment that would have allowed bankruptcy judges to modify troubled mortgages.
Senator Obama campaigned on the provision. And President Obama made its passage part of his antiforeclosure plan. It would have been a very useful prod to get lenders to rework bad loans rather than leaving the modification to a judge.
But when the time came to stand up to the banking lobbies and cajole yes votes from reluctant senators — the White House didn’t. When the measure failed, there wasn’t even a statement of regret.
And then there’s the White House statement itself, which makes a carefully phrased endorsement of “appropriately tailored bankruptcy language,” but leaves open the possibility that it’s not including the Durbin proposal in that description.
The Administration also supports appropriately tailored bankruptcy legislation to provide a mechanism for homeowners who are out of other options to file for bankruptcy and implement a responsible plan to pay the debts that they are able to pay. Notwithstanding the Senate vote on the Durbin Amendment, the Administration looks forward to working with the Congress to address this issue.
This statement makes the most sense if you replace “notwithstanding” with “after spurning.”
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