Yah Republicans ! - U.S. mortgage meltdown linked to 2005 bankruptcy law

[Ioo]

Here is a fresh piece of punch on the face for ya all.

http://www.kansascity.com/business/story/976039.html

There’s no shortage of blame for the mortgage crisis that drove the economy into the ditch.

But here’s a fresh culprit: the 2005 bankruptcy reform act, which was strongly pushed by the credit card industry.

So say three researchers at the Federal Reserve Bank of New York, who argue that the legislation shifted risk from credit card lenders to mortgage lenders, helping trigger the surge in home foreclosures.

Before Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, households could erase their unsecured debts by filing for Chapter 7 liquidation. That freed up income that distressed homeowners could use to make mortgage payments.

The new law, however, forced better-off households seeking bankruptcy protection to file under Chapter 13. That chapter requires homeowners to continue paying their unsecured lenders.

In other words, say the Fed researchers, cash-strapped homeowners who might have saved their homes by filing Chapter 7 are now much more likely to face foreclosure.

“Is it just coincidence that the surge in subprime foreclosures that has rocked financial markets came right after the bankruptcy reform in 2005?” they asked. “Is that surge just about falling home prices, bad mortgage decisions and weak economic conditions?

Oh there is more, go and take a read... and I want to be the first to give a warm F U to the Republicans... I hope you are voted out of existence. (Oh and BTW, JOE BIDEN was a supporter of this as well, given he is from DE, the home of all banks)

[YOY]

1. but but but it's all Fannie/Freddie's FAULT!!!

I love that one...

[BOSSHOG]

2. All you have to do it is go to any poor neighborhood

and see all the recently built mansions that lenders were forced to finance to know that anyone with conservative values had nothing to do with the current debacle. Obviously people of the party of responsibility aren't responsible for yet again, something else significant in our world.

[YOY]

3. It's also a paltry percentage of mortgage loans given...

but explaining this to them makes them mad.

The concept of "personal accountability" is only for those they dislike.

[madfloridian]

4. Remember that the Blue Dogs and New Democrats urged this bill be passed at once.

They even wrote letters to Hastert and begged him to bring it to a vote. The Democrats were complicit in this despite our pleas. They shrugged us off.

Names and letters at the link.

[stubtoe]

5. Recommending: an excellent piece of reportage by the author of the article.

KCS scores a point.

edit: clarity

[ikojo]

6. Let's not forget to thank Joe

"the senator from mastercard" as well. He was a big propenent of the bankruptcy law.

[mdmc]

7. DLC! DLC!

:woohoo:

[Javaman]

8. just remember, Biden pushed this bill. he's has been and aways will

be in the pocket of the CC industry. if you recall the CC industry is in Delaware.

that's why I have a love/hate opinion of the guy. he's done some good things, but the changing of the bankruptcy law was a gigantic fuck you to all the middle and lower classes of this nation. I can't dwell on it too long, it makes my blood boil.

http://www.delawareemploymentlawblog.com/2008/09/employ...

At the same time Biden has taken “pro-employee” stances on employment legislation, he has put his full weight behind, and achieved great success on behalf of, at least two significant segments of Delaware employers: banks and the legal system. He supported the 2005 bankruptcy reform law, which made it harder for consumers to rid themselves of debt, but benefited banks such as MBNA (since acquired by Bank of America).

And...

http://www.higginsandassociates.com/national-legal-news... /

Senator Obama has complained about the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), suggesting that an overhaul is needed for the 2005 bankruptcy bill.

“While I was opposing the credit-card industry’s bankruptcy bill that made it harder for working families to climb out of debt, was supporting it — and he even opposed helping families who were only in bankruptcy because of medical bills they couldn’t pay,” Senator Obama said in July.

The presidential candidate said that he would like to see bankruptcy restrictions, such as the means testing and credit counseling requirements, eliminated. He would also like to see families with certain hardships such as medical expenses have a greater chance to keep their homes.

Senator Biden, however, supported the BAPCPA and voted with Senator John McCain (See how McCain and Obama compare) and other Senate republicans. Senator Biden was also a top recipient of campaign cash from the credit card industry and critics contended his move was to cater to Delaware’s large credit card industry by making it harder for individuals to file for Chapter 7 Bankruptcy.


Also as part of the 2005 law, the U.S. Bankruptcy Court for the District of Delaware got four new judges. Once the new judges were assigned, Delaware regained its top position for bankruptcy filings, with nearly 80% of companies seeking bankruptcy protection filing in Delaware in 2007. Biden has thus endeared himself to Delaware’s legal employers, by ensuring Delaware’s prominence in the bankruptcy field.

[Ioo]

9. As stated at the bottom of my post.

[TayTay]

10. I was always proud that not one of MA's Cong delegation voted for that bill

in either the House or Senate vote. Same thing on the so-called "tort reform" bill in 2005. (10 votes in the House, 2 in the Senate)

That is a record I can be proud of for Massachusetts.

[karynnj]

16. Not to mention that anyone watching the Senate during all those amendments

saw Ted Kennedy give one incredible speech after another on why the bill needed changes - the heartbreaking thing was seeing each and every good amendment that tried in one way or another to mitigate the impact of the awful bill fail.

[deaniac21]

11. End the two party system. It's an experiment that failed!

[SammyWinstonJack]

12. Yah Republican! and VP Biden.

x(

[closeupready]

13. Congress needs to VOID the Bankruptcy Reform Act of 2005.

Period.

[midnight]

17. That seems to be the simplest solution, and it might work.

So hopefully they can get a committee together and roll it through the books.

[closeupready]

18. It can't undo damage already done, of course, but it will certainly help in the coming months.

Remember that story on 60 Minutes about ARM mortgages? The vastly larger set of resets are still to happen. We need to think ahead, and undoing the 'reform' will help alleviate a crisis to some extent.

Would banks rather have to write off credit cards or foreclose? I mean, this is basically the choice, and I guarantee you, they'd rather write off credit card receivables.

[Romulox]

27. What if Joe Biden is called upon to cast the deciding vote????

[Romulox]

14. Joe Biden is as complicit in this as ANYBODY. LOL at the faux populist persona he's trying to build

[populistdriven]

19. Bill Nelson FL

[Romulox]

25. ?

[Kansas Wyatt]

15. I read this in the paper yesterday.

My first thought... NO SHIT? I wonder how long it took these educated people to figure this one out? Hmm... At least three years.

By the way, for all you educated people out there. Uneducated people think you are an elitist, because you refuse to use any common sense, yet act like you have superior intelligence. It is possible to still be educated, yet dumber than a box of rocks.

[Tesla]

20. My Aunt thinks because someone is educated it makes them dumber

and they just want to have a title... she's an Arizona Republican.

[lovuian]

21. Its Congresses and Greed Greed Greed

and they will PAY PAY PAY

Kit Bond says GOODBYE Coleman GOODBYE
there is a list of Greedy SOB's

[Froward69]

22. Well throw it at the wall

and see if it sticks.

[jtrockville]

23. NOT just Biden, NOT just republicans.... 18 (D) Senators, 73 (D) Representatives

18 Democratic senators voted Yea: http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=109&session=1&vote=00044

73 Democratic representatives voted Yea: http://clerk.house.gov/evs/2005/roll108.xml

Credit where credit is due.

[Romulox]

26. Only one of these is the Democratic VP of the US, selected as Obama's special "middle class" envoy

however.

[eridani]

24. But I thought only the loony left objected to that bill, right? n/t