President Obama says that allowing bankruptcy judges to write down mortgages to reflect fair market housing values is an important part of his plan to arrest the downward spiral of the mortgage crisis. So why is Ellen Tauscher, head of the New Democrat Coalition, working so hard on behalf of bank and mortgage industry lobbyists to stop it from happening?
That's a good question. When Chris Bowers told readers to write and urge her to stop watering down HR 200, her communications director contacted him to point out "that she voted in favor of the rule on HR 1106, which implies support." Not only is the vote not reflective of support for the bill, but numerous House sources indicate that former Wall Street investment banker Tauscher is the one who recruited Blue Dogs and New Dems to join with the Republicans to render it meaningless. She's the undisputed leader of the opposition, speaking boldly in the caucus meeting and negotiating with Zoe Lofgren on behalf of the banks. Fer chrissakes, even Fox News is reporting she's taking the lead on this. It's downright insulting that her office tried to pass off something this outlandish and easily disputed.
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. Contrary to what you might hear on Morning Joe, it was national civil rights leaders who joined together to fight the Coalition's predatory lenders as they tried to pass the Ney-Kanjorski bill, which would have enabled banks to get around predatory lending laws and make more bad loans. This they justified based on the oh-so-high-minded need to provide loans to low income and minority borrowers. It was true scumbaggery.
Pase was also the senior policy adviser for Dennis Moore when Moore organized Blue Dogs to oppose mortgage write-downs on behalf of the banking industry in 2007, and he is evidently the one driving policy on this one for the New Dems. But one has to wonder -- what is Tauscher thinking? Her district is one of the hardest hit by the mortgage crisis, as you can see from the map. Why is she trying to limit mortgage write-downs to subprime loans only, on behalf of banks, when every foreclosure brings down the value of all houses in a neighborhood? Her claim to care so very much about people still struggling to pay their mortgages rings hollow.
Credit Suisse says that this bill would cut the rate of foreclosure by 20% and it wouldn't cost the taxpayers a dime. Why? Because it would force banks to write down the value of the loans on their books to their true value -- which would quickly show that they are probably insolvent. They're also hoping that the taxpayer will pick up the tab and they'll be able to escape taking responsibility for their own bad business decisions. Taushcer's own bill would provide mortgage relief from TARP funds.
Tauscher and others are hiding behind the mantle of "fiscal conservativism," but it's little more than self-interest on behalf of banks that are incomprehensibly still writing our legislation again.
Jane Hamsher blogs at firedoglake.com