This morning the Senate approved the Merkley-Klobuchar amendment to the Restoring American Financial Stability Act of 2010. The amendment is pretty common sense and very consumer friendly, which is why 36 Republicans opposed it.
Senator Merkley explained the intent of his amendment on his website:
The Merkley amendment will ban mortgage lenders and loan originators from accepting payments based on the interest rate or other terms of the loans. It would also prohibit a loan originator from receiving compensation from any party other than the borrower if they have already been compensated by the consumer. In addition, it will require lenders to verify borrowers’ ability to repay their loans from income and assets other than the home’s value. To help homeowners better afford the up-front costs of their mortgage, the legislation will still allow homebuyers to finance their closing costs as part of their loan…
…Under the current rules, mortgage lenders and loan originators are allowed to steer families into high-cost and riskier loans, even when they qualify for affordable loans. A Wall Street Journal study found that 61 percent of the subprime loans that originated in 2006 went to families who qualified for prime loans. This practice was a key driver of the housing bubble and, ultimately, the foreclosure crisis that has devastated communities across the nation.
Although the amendment was co-sponsored by Republican Sens. Olympia Snowe of Maine and Scott Brown of Massachusetts, it was only able to attract three additional votes (Collins, Lugar, and Grassley) from the GOP. I don’t know if there can be any clearer indication of where the Republicans stand. They voted against banning no-doc mortgages, and they voted against prohibiting loan originators from ripping consumers off by giving them higher interest loans than what they should get based on their credit risk. Incredible. Whose bidding do you think the Republicans were doing this morning?
Well since I’ve been told that the Fundamentalist Tea Party members are so much better educated than us I’m sure the ‘facts’ will be sorted out for us simpler folk to understand that indeed it’s all part of keeping the rich richest so that we can stand in awe as we are trickled down upon.
Whose bidding does the GOP always do? Whoever finances those trips to strip clubs.
word.
ya know, this is the kind of legislation that I consider to be at the heart of progressivism. You wake up in the morning and there’s a cottage industry for ripping off poor people (mostly of color). You go to bed at night, and the bill has eliminated that cottage industry.
Well done Jeff Merkley (who I predicted would be our strongest freshman) and Amy Klobuchar, and the other co-sponsors: Senators Chuck Schumer (D-NY), Olympia Snowe (R-ME), Scott Brown (R-MA), Mark Begich (D-AK), Barbara Boxer (D-CA), Chris Dodd (D-CT), Carl Levin (D-MI), Al Franken (D-MN) and John Kerry (D-MA).
Note the presence of Begich, too, who is dominating considering the state he represents. I had a good feeling about him, too.
Agree, if persons of color includes Filipinos. A co-worker who lost his home because of variable rate interest going up to 11% is an example. They have two incomes totaling around $100K and should have qualified for a fixed rate prime loan on a house that cost $400K-450K.
heh.
Good choice, though. Very smart.
They are pretty sure in the fact that voters will not figure this out.
SOCIALISM!!!
The most generous way to see the republican opposition to amendments like these is that they haven’t understood yet how stupid their ideology of minimal regulation is. It’s too painful to contemplate that they deliberately screw up their constituents. I prefer to think that they’re completely blinded by ideology.
The most important question is: HOW HOW HOW can the democrats get their message THROUGH? How can they make the voters understand that voting for more conservative candidates out of frustration and fear is NOT the solution, FAR FROM IT .
I hope democrat strategists and politicians come up with some imaginative solutions. Because there’s a wave of irrationality blowing in the USA and countering this is not easy.
It’s an ongoing question as to how much of GOP behavior is driven by simple bribe-taking and how much results from stubborn belief in stupid dogmas. Crooks always find ways to mask their greed and indifference with some excuse or other, and religious and economic ideology fit the bill perfectly.
As to Dems, the problem as I see it is that they’re not willing to stand up for reform of American capitalism’s worst failings. They’re willing to tinker at the edges as long as they’re not openly challenging any basic assumptions and cliches about “free markets”, the “merit society”, and so on. Hate to say it, but much of the problem with getting their message through is that they don’t have much of a message. That’s why a lot of folks who should be in our base are Reagan Dems or teabaggers.
Many people can’t get a mortgage unless it’s no-doc (e.g., small business owners).
Further, people who take out subprime mortgages when they qualify for prime are essentially too dumb to shop around. It’s like paying $4.00/gallon when a gas station down the street charges $3.50. Should the law protect people from their own stupidity? Maybe, but then aren’t the drug laws designed to do that?
Sort of. They’re supposed to, but they don’t succeed. Better to regulate and have state control over them than a black market.
Even more still, over the counter drugs are super idiot proof and it’s damned near impossible to OD on them.
A basic tenet of progressivism is that a significant percentage of any population is vulnerable because of lack of education, desperation, or just limited intelligence (or all three). That is why we need consumer protection not just against poisoned foodstuffs and lead in our toys, but against predators that figure out how to make a quick buck on the backs of the vulnerable.
As for no-doc loans, I don’t know what you’re talking about with small businesses. But the purpose of the loans is for the carpenter or electrician who does their business under-the-table. In a normal situation where the loan originator is a member of the community, he or she knows that the electrician is blowing off the IRS, but they also know that they’re good for the money. So, no-doc is a way to give a loan to someone who is ripping off the government (and the rest of us). Not sure I give a shit if they can’t get their mortgages anymore, but the problem was that the practice of no-doc loans got extended to everyone because the loan originator no longer retained any risk of default.
Not necessarily ripping off the IRS. If you are a full time electrician, or handy man, you have historical income proof, but no proof of future income.
Standards vary, too. My overtime income wasn’t counted toward qualifying me for my mortgage, but my Chevrolet dealer was eager to use it to qualify me for my car loan.
Come to think about it, I didn’t show them any pay stubs, so it was a no-docs loan. I just showed my photo id badge as proof of employment.
If you’ve followed the stories at places like Pro Publica you know that this wasn’t all about ignorance or stupidity. Banks and brokers were lying outright about the adjustable rates, promising to change them when the time came, and on and on. You seem to think it’s OK to blame the victims if they didn’t do a thorough study of finance. There was a time when most people thought they could pretty much trust the promises of bankers, that the banks accepted some responsibility for making viable loans, and that there was some protection by government. Now we know better, but that doesn’t make Monday morning quarterbacking prettier.
Good point. There was rampant fraud, and I suspect there is rampant fraud in many of the ensuing foreclosures, as the foreclosing banks do not in fact have the necessary documentation for the loans.
I totally agree with you that our society is currently saddled with “free-market” ideology as the default position on political-economy. And as with the default view of “national security”, democrats are typically left looking like namby-pampy republicans, since they get to say that tax-cuts are always good, regulations are always bad, government spending is always socialism (except the pentagon!) etc. The problem is that right-wing ideology is simplistic and so comforting. Alternative ideologies run the risk of being equally simplistic…
Well woot, Amy Klobucher actually did something other than just be a face in the caucus.
They are being who we knew they were. when have they EVER
and I mean EVER
sided with the little guy?
According to them, they always side with the little guy against the big mean government bureaucracy. According to them.
Lugar is not bad for a Republican. He’s more like the old conservatives before the word became a synonym for bat shit crazy.