In the vice presidential debate, Sen. Joe Biden said that "what we should be doing now — and Barack Obama and I support it — we should be allowing bankruptcy courts to be able to re-adjust not just the interest rate you're paying on your mortgage to be able to stay in your home, but be able to adjust the principal that you owe, the principal you owe."
To get this bill passed, Obama made a lot of phone calls — particularly to members of the Congressional Black Caucus, including caucus chief Rep. James Clyburn — assuring this would happen.
Those paying their mortgages on time don't get that break.
Rep. Elijah Cummings said Obama told him that, if elected president, he would direct a Treasury Department official to work with homeowners in foreclosure to restructure their loans. Cummings said Obama also told him he'd seek changes in bankruptcy laws allowing judges to reduce what borrowers owe on their home loans.
Section 110 of the rescue legislation has the Orwellian title of "Assistance to Homeowners" — but only for the deadbeats.
It describes somebody called a "Federal property manager" who "holds, owns or controls mortgages, mortgage-backed securities, and other assets secured by residential real estate."
Section 110 speaks of
"modifications" that this manager can make to these mortgages including not only the reduction of interest rates but the reduction of loan principal.
Not only is Uncle Sam now the world's largest landlord. He can also arbitrarily set the value of property and the amount owed on it at will, thus distorting the free market.
The vast majority of homeowners who pay their mortgages on time get the shaft. They're the ones who'll take up the others' slack.
Why? And why is the Community Reinvestment Act still law?
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