TPM will be hosting Congressman Brad Miller and several others in a discussion of HR 3609, the proposed bankruptcy amendment that would force the mortgage lenders to the negotiating table in some of the worst subprime cases.
The conversation is important. The Fed announced today its plans to prevent the NEXT mortgage crisis, but fixing THIS crisis is not on their agenda. The mortgage industry is lobbying furiously against the bankruptcy remedy, and the Wall Street Journal has condemned the proposal in editorials replete with misrepresentations of what the bill would do. Treasury Secretary Paulson said his voluntary, industry-backed plan is “not a silver bullet,” but he says he doesn’t have any other ideas. Now we have the chance to talk directly with the man with a plan: Congressman Miller.
Congressman Miller’s bill would give some homeowners caught in upside-down loans the chance to write down the loan to the value of the home and put the homeowner in a long-term, fixed mortgage. The bill is designed to reduce the number of foreclosures, not by putting them off with a temporary rate freeze, but by moving some families into long-term mortgages they can afford. It wouldn’t help everyone, and it wouldn’t prevent the real estate market from falling further, but it would help end the crisis by moving people toward permanent solutions–whether that means a new mortgage or moving out of a house that is simply unaffordable.
We have some good people planning to jump in, so I’ll keep the opening remarks short. But I want thank Congressman Miller for making himself part of this online conversation. And I want to thank Paul Blumenthal of the Sunlight Foundation who set up this conversation. He sees it as “a great opportunity to create a real discussion about legislation that can deal with substance and encourage conversation on an important issue.” That sounds right to me.
Keep watching this space and please post your comments. Despite the lobbying, the misinformation, and the very technical nature of bankruptcy, this kind of discussion could be democracy at its best.
