Obama Promising Dangerous Bankruptcy Law Changes To Win Votes on Bailout Bill

Barack Obama called Maryland Rep. Elijah Cummings on Tuesday with a promise: As president, he would revisit bankruptcy laws to give judges more leeway to prevent foreclosures.

Cummings, who voted against the financial-markets bailout on Monday, told Obama he was “open” to changing his vote but wasn’t there yet.

"I have to look beyond [the bailout] to a rainbow called Obama," he said. "When you bring in the Obama factor, that's very very important."

As the final high stakes vote on the bailout bill approaches Friday, Cummings is not alone among lawmakers who have found solid reasons to reconsider their vote. Whether it's the "Obama factor," or the fact that billions in new tax incentives have been added to the bailout bill, it's becoming clear that opposition is wilting to the $700 billion financial rescue plan just in time for a second House vote on Friday.

He wants to bail out ACORN!!!
An ACORN falls from the tree

Ken Blackwell

As negotiations over Congress’s emergency rescue bill continued this week, repeated rumors leaked out that the Democrats were trying to funnel money to a hyper-partisan organization involved in criminal voter fraud.

I’m speaking of the Association of Community Organizations for Reform Now - known by its acronym, ACORN.

Although ACORN was cut from the final legislation, it’s important to understand this organization and its long history with, of all people, Barack Obama. And it’s important to see how partisan this emergency legislation has become.

As the week progressed, reports were constantly emerging of the sticking points preventing a final agreement. One of these reputed points of contention was whether 20 percent of the profit proceedings for asset sales in the future would go to what is called the Housing Trust Fund, subsidizing certain groups for ostensibly nonpartisan activity. One of these groups that this trust supports is ACORN.
http://www.timesgazette.com/main.asp?SectionID=1&SubSectionID=1&ArticleID=157602&TM=38260.75

"Giving lenders and other funding providers protection helps us all, by increasing competition and lowering the cost of borrowing. It is a major difference between us and undeveloped economies."

I disagree. I think lending in any form is a business risk and borrowers should be thoroughly vetted by the lender because of that. Giving credit out like Candy is a problem in the financial industry and a big part of our present problem. Artificially removing or reducing risk only encourages bad business decisions. If lenders had to take the hit when someone filed bankruptcy, they would toughen their criteria for giving unsecured credit to protect their bottom line.

The 2006 Bankruptcy Revision reduced a risk that credit card companies had ALWAYS been required to take before then. I am certain credit card companies were eager to issue cards to riskier borrowers because of this.

In my business, if I extend credit to someone and they file bankruptcy, Tough cookies. Credit Card companies shouldn't be different and never were before 2006.

Bad idea, Obama. Foreclosure rates are fairly lowly. 1-2% of all mortgages.
This problem is with Mortgage backed securities and their faulty instruments. The vast quantity of these subprime mortgages is not good, either...but Obama and EVEN McCain really needs to understand this clearly and address that problem’”””

Perhaps your figures are accurate, but I think the %% is higher. Tom Tancredo of Colorado says there are 30,000 foreclosures in his district alone, most of them ILLEGAL INTRUDERS. More copy-cat versions of the Fresno, Kalif illegal intruder strawberry picker who was allowed to buy a $500,000 house in Fresno.

There is another group of shoes that are going to drop in all this mess, IMO.

1.) With the number of foreclosures followed by the bank mergers, the paperwork about paying the property taxes on these foreclosures is all balled up.
I predict that the taxes will be paid late, if not VERY late, thereby interrupting the flow of money into counties nationwide.

2.) If someone doesn’t put at least 20% down on a house, I am under the impression that Mortgage Insurance must be purchased to cover the bank if you default. If that insurance is in place——which has never been discussed in the sub-prime postings here—— then the insurers are on the hook for millions of defaulted mortgages. Who is the major insurer for such mortgages and when will they turtle and go belly up??? What other types of coverage will dry up in the same moment???

3.) The more sensible people who got into trouble with their lending practices and got over their heads did the right thing, and just moved out, leaving the properties in decent shape. BUT—alot of the people who were handed the “no income verified-no credit history-no money down-mortgages have damaged or destroyed the interiors of the houses. They have taken out every single fixture, plumbing and electrical. They have stolen the doors and the cabinets. They have busted up the drywall and stolen the carpeting. Water heaters and house heating systems also.

Think I am over-stating this? Think again. Rush had a caller last week who called about properties in Detroit that she can buy for $1000 that are sorely distressed and damaged.
The properties that are in default—some of them are barely worth the value of the framing, and the dirt. The quality of the persons who got these “you cannot discriminate against me” loans were savages, and they have shown their true colors. Even if the bank can find a buyer for these distressed buildings, the buyer will have a large job of re-hab, and they have an excellent case for getting the taxes reduced dramatically. That == less revenue for the counties and cities.

4.) If the taxes and INSURANCE are paid thru impounds, and the payments aren’t being made, this is a further drain on the bank’s available cash. I can see lots of policies lapsing with the insurance companies and another nail in the coffin of this whole mess.

Socialism doesn’t work— not even in the richest country in the world.
I am eagerly awaiting the perp-walk of Barney Frank, Chuckie Schumer, Chris Dodd, Charlie Rangel, Jessie Jackson, Nobama, Nancy Pelosi, Maxine Waters,Bill Clinton, Jimmah Carter, and James Johnson and Franklin Raines, Jamie Gorlick and all the others.

I can think of another list of problems this will lead to, and the loss of revenues for counties and states that have lots of entitlement programs are going to be hit very hard. No wonder Kalifornia is broke- they actually have been broke for a number of years, but they have been playing a live and daily version of “Weekend At Bernie’s” to keep the charade going.

Prisoners in the worst cells in the USA have a better moral code with their fellow prisoners than the Democrats have with the American people.

I do think the 95 and 99 had significant influence on the growth of subprime loans. And that growth isn’t healthy to the overall economic well-being of our financial institutions.

CRA was expanded in the Gramm-Leach-Bliley Act,...Now Gramm viewed CRA as extortion,...but...

“In 1999 Senators Christopher Dodd and Charles E. Schumer broke another deadlock by forcing a compromise between Gramm and the Clinton administration which wanted to prevent banks from expanding into insurance or securities unless they were compliant with CRA. In the final compromise CRA would cover bank expansions into new lines of business, community groups would have to disclose certain kinds of financial deals with banks, and smaller banks would be reviewed less frequently for CRA compliance.[16][17][18] On signing the Act, President Clinton said that it, “establishes the principles that, as we expand the powers of banks, we will expand the reach of the [Community Reinvestment] Act”.[19]”

The sad fact is, in this counrty corporations, especially those in the debt building business, have run amuck for far too long with loose lending practices.

Jimmah Carter started this all in 1977 with the CRA=Community Redevelopment Act.
Then Clinton, Henry Cisneros, and Reno put it on the fast track with steroids. Reno declared she would sue banks all over the country on the grounds of “discrimination” if they didn’t loan to the “POOR PEOPLE” so they could also “enjoy” the thrill of home ownership. Banks would have had millions tied up in litigation.
Qualifying “income” included WELFARE and FOOD STAMPS!!!!

Put the blame where it needs to be— Carter, Reno, B Clinton & Cisneros.
Don’t forget the other stellar activities of Reno- she sent the Gonsalez kid back to Cuba and she burned down Koresch at Waco. Neither action was appropriate, IMO.

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