ELLEN TAUSCHER IS A BAD DEMOCRAT WHO WANTS HER CONSTITUENTS TO LOSE THEIR HOMES.
Ellen Tauscher and George Bush: Thick as thieves..
On Saturday I wrote a post about the efforts of former Wall Street investment banker Ellen Tauscher to gut legislation that would allow bankruptcy judges to write down mortgages, something that would stop 20% of foreclosures at no cost to the taxpayers. But banks and banking lobbyists are holding out hope that they can unload their bad loans on taxpayers, and are working through people like Tauscher to oppose the legislation so they never have to take responsibility for their mistakes.
I promptly got a call from Jonathan Kaplan, Tauscher’s press secretary, who said that the Executive Director of the New Democrat Coalition, a former lobbyist for predatory lenders who worked to undermine regulation of subprime loans named Adam Pase, was not working on this issue, nor was Tauscher taking the lead. He claimed Tauscher was only trying to help homeowners before they got to bankruptcy court, and wasn’t trying to weaken anything.
Lo and behold, this morning we find not one but two articles where Tauscher brags about her leadership of an effort to “limit the scope of the bankruptcy bill as much as possible,” saying that “it shows we have bench strength, and it shows we can flex.” It says that Adam Pace was circulating memos on the bill, and an article in Roll Call this morning (subscription) states that he is “widely credited with bringing a sharp organizational focus that has reinvigorated the group.”
And who is Adam Pace? Janre has more:
Tauscher’s office also said she hasn’t met with any bankers or lobbyists on the matter, and that may well be true. She doesn’t have to. Adam Pase, the executive director of the New Democrat Coalition which Tauscher chairs, works directly out of her office.
Pase is is a former lobbyist for the Twenty First Century Group, whose client, the Coalition for Fair & Affordable Lending, is an astroturf group, financed by the banking industry, that lobbied on behalf of. . . you guessed it. . . sub-prime lenders.
Now, you’d figure with California on the brink of complete and total economic collapse, with homeonwers losing their homes left and right, Tausher would be doing ANYTHING to help keep these people in their homes. But NOOOOOO: Ellen’s a former investment banker herself, and she doesn’t want to see her many good friends and buddies in the industry pay any consequence for their mistakes. Thick as theives, you might say, and accurately so.
This isn’t the first time the left has tangled with Tausher, who’s up to her eyeballs in the beltway protection racket, just like now-retired-by-force Al Wynn and soon-to-be-retired-by-force Jim Cooper. And really what else do we expect from a woman who loves George Bush and thought the Iraq War was a great idea, who thinks Joe “Rape Gurney” Lieberman is the cat’s meow, and who refused to support impeaching the corrupt Alberto Gonzalez?
Thick as thieves, birds of a feather, in a nest lined with corruption. That’s Ellen Tauscher in a nutshell. Sign the petition, and make sure to give to accountability NOW. If Ellen Tauscher won’t represent her suffering constituents, maybe she needs to return to the banking industry.
March 2nd, 2009 at 2:19 pm
Brendan-
Cram-down is a bad idea. Really bad. Here’s why:
One of the reasons that home loans have different rates than credit cards is because they’re secured by an interest in the property they were used to purchase. The lender gets to rely on more than my promise and ability to pay the money back.
Secured loans are normally kept out of bankruptcy proceedings if the debtor wants to keep the property. Either keep paying the loan, or give up the shiny thing. Creditors with unsecured loans take a loss. That’s why they charged more interest in the first place.
If we allow debtors to keep the shiny thing (their house) but make the creditor lose money on the deal, that will reduce the lender’s willingness to make new loans, or refinance existing loans, unless they get paid higher rates or get some other guarantee (government?)
That’s going to screw the following people:
1. The next generation of homebuyers. Try taking a 30 year mortgage at 12% interest. Can’t afford as much house any more.
2. People moving to take work elsewhere- If you want to buy a house in your new location, you’re going to need to get a new loan, right?
3. People trying to sell a house. Buyers won’t be able to afford as much for an existing house, since they’ll have to pay unsecured interest rates.
4. Those of us who recognized that we shouldn’t buy a house we could not afford and kept renting.
Keeping people in their houses is a nice gesture, but has nasty unintended consequences.
March 2nd, 2009 at 3:06 pm
sorry bro, can’t agree on this one.
maybe if everyone who bought a house was a flipper, but not when I know that banks were lying to prospective buyers, whot he BANKS knew they shouldn’t loan to but did anyway to make a profit.
Nope. also, when those people lose their homes, they drive down the value of homes still owned. that is, if three of my neighbors lose their homes to foreclosure, that dmaages the value of MY home too, and brings crime into the neighborhood (looters, squatters).
No, I don’t agree with this. I don’t LIKE it, but if i’m expected to bail out the people who caused the problem to begin with, I want to bail out ordinary people too.
March 2nd, 2009 at 3:20 pm
The next generation of homebuyers. Try taking a 30 year mortgage at 12% interest. Can’t afford as much house any more.
So what? didn’t you just say that was because too many people bought houses they couldn’t afford? if anything higher rates would weed out those who can’t afford to buy.
Besides, no one actually knows who the creditors even ARE anymore. That’s why so mnay people are using “produce the note” to stall/stop foreclosure proceedings.
March 3rd, 2009 at 1:00 am
Brendan-
What is it that you want? To punish the banks for their loose loans? To prevent decreasing property values? To prevent current homeowners from losing their homes?
To prevent homelessness?
Cram-down only works for one of these but has expensive consequences.
1. Bank punishment. I get this. Really. I’m furious that every decision maker in this business seemed to make worse decisions than Hunter Thompson and John Belushi with a case of bourbon and a few 8-balls of coke. Unfortunately, these bad loans got processed like ground beef and sold to everyone looking for a safe bet. Pension funds and insurers bought them up, because they were historically safe. The fund managers bought instruments they didn’t understand, which was stupid as well.
Where does that leave us? Every pension fund and insurer is finding their investments losing principal, let alone interest. They have less money to pay their beneficiaries. If they go insolvent, the bill falls to the states, which means the U.S. government.
Cram-down will further reduce the value and increase the risk attached to these instruments. You’re not punishing the banks, you’re punishing, well, everyone else.
2. Property values. I’m not even sure foreclosures reduce values or merely show the current market value of the property. If you remove qualified buyers from the pool, property values drop as well.
3. Cram-down will prevent homeowners who can’t afford their current mortgages, unless their finances change. We’re still not sure how it’s going to work then.
4. Preventing homelessness? Anyone who can afford (reduced) payments can afford rent. Heck- Fannie Mae and Freddie Mac are going to offer rentals of foreclosed properties to previous owners.
By allowing cram-down, you’re privileging one group of people (current insolvent homeowners) to the detriment of, well, everybody else.