Lending Industry Still Fighting Mortgage Modification as Foreclosure Crisis Continues

Common Cause –

The House of Representatives is debating the Wall Street Reform and Consumer Protection Act of 2009 (HR 4173), the most significant overhaul of the financial industry since the New Deal. The legislation is meant to address the underlying causes of the real estate and financial collapse last year, which continues to be felt around the country. Housing foreclosures set a new record during the third quarter, as one in every 136 U.S. housing units received a foreclosure filing during this three-month period.[i]

Judiciary Committee Chairman John Conyers Jr. (D-MI) and Rep. Zoe Lofgren (D-CA) are offering an amendment to the bill that would help some families stay in their homes by allowing a bankruptcy judge to adjust the value of a mortgage to reflect the current value of the home. The House passed a similar proposal in March, but it ran aground in the Senate. Some House members want the Senate to reconsider the proposal as most major lenders have not responded to the voluntary initiatives adopted instead of the bankruptcy provision. The Treasury Department estimates that only one in five eligible households have received government assistance through these voluntary programs.

Some of the financial institutions that have lobbied against this proposal are also the biggest recipients of federal bailout money, including Citigroup, Bank of America, Wells Fargo and JPMorgan Chase & Co. Data from the Center for Responsive Politics shows that big financial companies that have lobbied on this provision have spent more than $80 million on lobbying and more than $6 million on campaign contributions this year.

Full Story Lending Industry Still Fighting Mortgage Modification as Foreclosure Crisis Continues – Common Cause.