Blue Dog Democrats And New Democrat Coalition Delay Homeowners Protection Vote

In her article “House Vote on Help for Homeowners Delayed”, South Carolina consumer bankruptcy lawyer  Däna Wilkinson reports that a scheduled vote on a bill that would give bankruptcy judges the ability to restructure home mortgages was delayed after a group of so-called moderate Democrats expressed concerns about how the bill would affect homeowners who are not facing bankruptcy but are still struggling to make their mortgage payments.

These Democrats, known as Blue Dog Democrats and the New Democrat Coalition, describe themselves as conservative or moderate Democrats.  Their arguments, on the surface, are appealing ones: 

• Why should we bail out people who knew they couldn’t afford a home? 
• How is this fair to the next door neighbor who makes his or her monthly payments?
• Won’t this law encourage people to file for bankruptcy?

The flaw in these arguments is:

•  In many, if not most cases, the lenders knew that these borrowers could not afford these home loans and lent the money anyway, issuing sub-prime loans!
• A next door neighbor is not helped, but is in fact harmed, by a house that is empty and in foreclosure, since such houses tend to bring down the overall value of a neighborhood!
• Many of these same people would end up in bankruptcy anyway, either surrendering their house in a Chapter 7 bankruptcy or trying to repay the debt in a Chapter 13 bankruptcy!

The delay is not for further reflection and discussion, but is an attempt to buy time to kill these amendments.

If your Congress member is a Blue Dog or a New Democrat you may want to contact them.  The links in this article list Members of Congress that belong to these groups along with their contact information.

The issue of mortgage restructuring by bankruptcy judges is not a conservative or liberal issue, it is an economic one.  It is time that Congress gave individual debtors in Chapter 13 the same rights given to major businesses in Chapter 11: 

The Right To Restructure Their Consumer Debt!

Related posts:

1. Will The “Blue Dog” Democrats Prevent Your Neighborhood From Recovering From The Foreclosure Crisis?
2. House Vote on Help for Homeowners Delayed
3. Vote On Modification Bill May Be This Week