Did everybody miss Hillary Clinton inserting TORT REFORM into her speech on the housing crisis?

[Tatiana]

In her speech yesterday on the housing crisis (which started off pretty decent), Hillary had the following to say:

Right now, many mortgage companies are reluctant to help families restructure their mortgages because they’re afraid of being sued by the investment banks, the private equity firms and others who actually own the mortgage papers. Because remember, all of these mortgages were bundled up in these huge packages and sold around the world. So you can’t just go down to see your mortgage broker or your bank or your other lender to work out a deal because they no longer own the paper. This is the case even though writing down the value of a mortgage is often more profitable than foreclosing - both for mortgage companies and for most of those who own the mortgages.

That’s why I will be proposing legislation when Congress returns to provide mortgage companies with protection against the threat of such lawsuits. I know this kind of policy isn’t particularly glamorous and it probably won’t make headlines. But it will make a critical difference in helping families save their homes and getting our economy back on track.

http://www.hillaryclinton.com/news/speech/view/?id=6695

If these mortage companies and lending institutions were following the law and other regulations, why would we need to protect them from lawsuits? This sounds just like the argument for retroactive immunity for the telecoms.

WHY IS A DEMOCRAT INTRODUCING TORT REFORM LEGISLATION?

[panader0]

1. Tort reform is a repuke plank.

[ClassWarrior]

2. Yup.

Scary.

NGU.

[Tatiana]

3. So why is a DEMOCRAT pushing legislation in favor of it?

What would John Edwards have to say about this?

[designforce]

12. Damm Straignt Man!

What the hell is she doing?

It is obvious she is a NEOCON RETHUGLICAN!

Wake up Clinton supporters! You are supporting a traitor to the party and our values!

Can you tell I have had enough of the Clinton smear machine?

Haven't you?

[Maven]

25. Ask BARACK. He supported actual tort reform which Clinton voted AGAINST.

This, however, is NOT tort reform. The lawsuits themselves that are at issue here aren't even actions in TORT. Either you don't know what you're talking about, or you came here to willfully deceive people.

[stillcool]

28. here's the bill that he supported...

http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=109&session=1&vote=00009

[Maven]

30. Yup. "Tort reform" advocates basically wrote the bill and Bush pushed it aggressively

and Barack was happy to vote for it.

[Medusa]

16. Consider the source.

Hillary is turning into a bigger Repug than Lieberman.

[Maven]

21. Then why did Obama support class action tort reform alongside Republicans in 2005?

Please read below. OP is completely FALSE.

[stillcool]

29. Here is the bill that Obama voted Yea

http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=109&session=1&vote=00009

[Maven]

38. And here's the wikipedia entry on it

http://en.wikipedia.org/wiki/Class_Action_Fairness_Act_of_2005

The bill was the first major legislation in the second term for the Bush Administration. Business groups and "tort reform" supporters had lobbied for the legislation, arguing that it was needed to prevent class-action lawsuit abuse. <1> President George W. Bush had vowed to support this legislation.

...

Critics charged that the legislation would deprive Americans of legal recourse when they were wronged by powerful corporations. Congressman Ed Markey (D-Mass.) called the bill "the final payback to the tobacco industry, to the asbestos industry, to the oil industry, to the chemical industry at the expense of ordinary families who need to be able go to court to protect their loved ones when their health has been compromised."<2>

Critics charge that this bill will make it far more difficult to bring class action suits, and may prolong such litigation, clogging the federal courts' dockets. The act also gives the Federal government the ability to somewhat control, through judicial appointments, outcomes that were previously under state control. No Republican legislators voted against the bill.

Why did Obama vote to make it harder for Americans to seek redress for corporate wrongs?

[stillcool]

42. yeah I saw that...

it was pretty interesting the D's that voted for it. I haven't read his explanation for that vote, but I haven't looked either. Strange seeing some of those names. Jim Jeffords..what ever happened to him?

[tularetom]

4. Why doesn't she just end the charade right fuckin now

Maybe it's not too late to get the VP slot on McCain's ticket.

You'd think she'd at least wait until she was nominated before coming completely out of the closet as a repuke.

[rucky]

5. Not only is that awful, but she made a false statement...

you CAN go to your mortgage servicer and renegotiate your terms. In, fact, it's one of the first things that HUD suggests you do if you're facing foreclosure:

http://www.hud.gov/foreclosure/index.cfm

All lenders have a settlement department, or settlement agent you can talk to. The investors may not lose anything, but the servicers will - and they don't want your home unless it's the only thing they can collect.

[Tatiana]

6. Good point. I know someone who saved their home this way.

It usually involves having to pony up quite a bit in upfront cash, but you can re-negotiate your terms.

This is just so egregious.

[Maven]

24. If the mortgages are owned by equity firms, they often CANNOT renegotiate beyond certain limits

prescribed by contract.

That is what Clinton's measure is meant to circumvent. It's meant to give mortgage administrators the freedom to do exactly that which you describe.

[anigbrowl]

44. Wouldn't her proposed legislation essentially void large chunks of contract law?

To me it's like her proposal for an interest-rate freeze - neither practical nor financially sound.

[rucky]

45. That's not the way it came off at all.

But cool that's what she's planning - the ability to settle without going to court.

[Vinca]

7. Tort reform - a very Republican thing to do. nt

[City Lights]

8. Hilliary is a DINO. eom

[Celebration]

9. here is what I think she is saying

She wants mortgage companies to be able to restructure loans with homeowners, without getting sued by the investment banks that now hold the mortgages.

I'm a huge Obama supporter, but let's not mischaracterize this.

However, I am not sure how this legislation is going to pass muster, anyway.

[Tatiana]

11. But they already restructure loans with homeowners who are in foreclosure.

And the investment banks holding the mortgages don't sue.

Chase is one such bank that I know of that encourages lenders to work with homeowners.

[Maven]

22. No, they DON'T

It's in the article that YOU POSTED.

And investment banks HAVE SUED to enforce the covenants in their indentures. Have you done any research on this issue at at all?

Why don't you read before you mislead people?

[Tatiana]

26. ***Sigh*** I give you good points for trying. From HUD's own website:

Contact Your Lender As Soon As You Have A Problem
Many people avoid calling their lenders when they have money troubles. Most of us are embarrassed to discuss our money problems with others or believe that if lenders know we are in trouble, they will rush to collection or foreclosure.

Lenders want to help borrowers keep their homes. Foreclosure is expensive for lenders, mortgage insurers and investors. HUD/FHA, as well as private mortgage insurance companies and investors like Freddie Mac and Fannie Mae, require lenders to work aggressively with borrowers who are facing money problems.

Lenders have workout options to help you keep your home. However, these options work best when your loan is only one or two payments behind. The farther behind you are on your payments, the fewer options are available.

Do not assume that your problems will quickly correct themselves. Don't lose valuable time by being overly optimistic. Contact your mortgage lender to discuss your circumstances as soon as you realize that you are unable to make your payments. While there is no guarantee that any particular relief will be given, most lenders are willing to explore every possible option.

http://www.hud.gov/offices/hsg/sfh/econ/econ.cfm#1

There really isn't a point to proposing legislation barring potential lawsuits.

[Maven]

27. I give you no points for lying to people.

This has nothing to do with fucking HUD. In fact, Clinton's measure is meant to accomplish EXACTLY WHAT HUD ADVISES.

I've dealt with people in these situations, pro bono. When investment banks and other private entities own the mortgages and have repackaged them into securities, they DON'T ALLOW mortgage administrators much leeway at all to renegotiate. These are fully private investment banks and individual bond holders, not Fannie Mae and Freddie Mac. That is one of the reasons why privately held mortgage securities have led to such high foreclosure rates. They take case-by-case decision-making out of the hands of administrators.

And administrators are under threat of suit if they violate the indenture attached to the mortgage securities by adjusting rates or repayment schedules. And those lawsuits aren't even TORT lawsuits, they're suits in CONTRACT.

Are you now ready to apologize for completely distorting the truth to make a cheap attack?

[Tatiana]

37. I'm sorry. I think it's in response to a wave of lawsuits that are coming down the pike.

Mortgage crisis spawns lawsuits
While borrowers file class actions, those who lost money investing in credit companies also suing

By CHRIS CHURCHILL, Business writer
Click byline for more stories by writer.
First published: Thursday, January 10, 2008

The latest byproduct of the subprime mortgage crisis? Lawsuits against mortgage companies.
In the last year, many mortgage businesses have been rocked by rising foreclosure rates, sinking profits, job losses and waves of negative publicity over the adjustable-rate loans often given to borrowers with dicey credit histories.

That has made the companies an appealing target for attorneys and their clients, just as cigarette companies were several years ago.

Locally, Glenville lawyer and consumer activist Richard DiMaggio has filed two lawsuits against mortgage companies since Dec. 31, including a class-action suit that protests "excessive fees and costs" charged by CitiMortgage Inc. to homeowners facing foreclosure.

Advocacy groups are pushing similar lawsuits filed nationally: The NAACP, for example, filed a class-action suit over the summer against 14 of the nation's larger mortgage companies, claiming the concentration of subprime loans in minority neighborhoods amounted to racism.

And in a report released last week, Stanford Law School in Palo Alto, Calif., said the number of companies sued in securities fraud class-action litigation jumped 43 percent in 2007, to 166, and said the subprime crisis was the primary reason for the rise.

The lawsuits cited by Stanford don't represent the homeowners who may have been harmed by adjustable loans. Instead, they represent investors who lost money on the loans and now claim the mortgage companies and others didn't fully disclose the risks involved in the subprime market.

Such class-action suits -- filed on behalf of a large number of people -- are far more common than consumer-driven mortgage lawsuits, said Raymond Brescia, a visiting assistant professor at Albany Law School.

That's because every mortgage is individual-specific, with terms that meet a particular borrower's needs, he said. So establishing a pattern of widespread abuse is difficult.

(more...)

http://timesunion.com/AspStories/storyprint.asp?StoryID=653898

Cleveland sues 21 banks over subprime mess
Posted by Henry J. Gomez and Thomas Ott January 11, 2008 05:01AM

Cleveland Mayor Frank Jackson took aim at Wall Street on Thursday with a lawsuit against 21 major investment banks that he said have enabled the subprime lending and foreclosure crisis here.

The one-of-a-kind suit, filed in Cuyahoga County Common Pleas Court, accuses venerable institutions such as Deutsche Bank, Goldman Sachs, Merrill Lynch and Wells Fargo of creating a public nuisance.

Jackson contends the companies irresponsibly bought and sold high-interest home loans. The result: widespread defaults that depleted the city's tax base and left entire neighborhoods in ruins.

City officials hope to recover hundreds of millions of dollars in damages, including lost taxes from devalued property and money spent demolishing and boarding up thousands of abandoned houses.

"To me, this is no different than organized crime or drugs," Jackson said in an interview with Plain Dealer reporters and editors. "It has the same effect as drug activity in neighborhoods. It's a form of organized crime that happens to be legal in many respects."

http://blog.cleveland.com/metro/2008/01/cleveland_sues_21_investment_b.html

January 22, 2008
If Everyone’s Finger-Pointing, Who’s to Blame?
By VIKAS BAJAJ
Everyone wants to know who is to blame for the losses paining Wall Street and homeowners.

The answer, it seems, is someone else.

A wave of lawsuits is beginning to wash over the troubled mortgage market and the rest of the financial world. Homeowners are suing mortgage lenders. Mortgage lenders are suing Wall Street banks. Wall Street banks are suing loan specialists. And investors are suing everyone.

The legal and regulatory wrangles could dwarf the ones that followed the technology stock bust and the Enron and WorldCom debacles. But the size and complexity of the modern mortgage market will make untangling the latest mess even trickier. Some cases stretch across continents. Others are likely to involve state and federal regulators.

“It will be a multiring circus,” said Joseph A. Grundfest, a professor of law and business and co-director of the Rock Center for Corporate Governance at Stanford. “This particular species of litigation will be manifest in many different types of lawsuits in many different jurisdictions.”

<snip>

Two questions lie at the heart of many of the cases. The first is whether lenders and investment banks alerted borrowers and investors to the risks posed by subprime loans or securities backed by them. The second is how much they were legally obliged to disclose. “Those are the two issues that are frequently raised,” said Jayant W. Tambe, a partner at the law firm Jones Day.

As defaults and foreclosures rise, the various players in the housing market are all pointing fingers at each other. State prosecutors like Andrew M. Cuomo, the attorney general of New York, are investigating whether investment banks that packaged mortgages into securities disclosed the risks to investors and credit ratings agencies. Investment banks, in turn, are accusing lenders and mortgage brokers of shoddy business practices.

“What strikes me here is that this a tainted system from A to Z,” said Tamar Frankel, a law professor at Boston University. “Everybody blames everybody else. If you look at what is being said, there isn’t one who doesn’t blame another and there is half-truth in everything.”

Wall Street banks that sold mortgage investments around the world face legal complaints from as far away as Australia and Norway. Lehman Brothers, the Wall Street bank with the biggest mortgage business, is being sued by towns in Australia that say a division of the firm improperly sold them risky mortgage-linked investments. Lehman has denied the charges and has said the unit, formerly known as Grange Securities, acted properly.

Closer to home, members of a New Jersey family have sued Lehman for $4.14 billion, saying the firm steered them into complex securities that have become difficult to sell, Bloomberg News reported Friday. Lehman denied the accusations.

In the United States, Lehman is suing at least six mortgage lenders and brokers like Fremont Investment and Loan and the Fieldstone Investment Corporation, claiming they sold Lehman dubious loans. Lehman claims that borrowers’ incomes were overstated, appraisals were inflated and the homes were in poor condition. In most cases, the lenders are fighting the allegations and Lehman’s demand that they buy back defaulted or otherwise problematic loans

(more...)

http://www.nytimes.com/2008/01/22/business/22legal.html?_r=1&pagewanted=print&oref=slogin

And these lawsuits need to be allowed to move forward so that we can get to the bottom of this crisis and enact regulations that prevent a nightmare like this from happening again.

[Maven]

39. NO. YOU'RE DELIBERATELY MISLEADING PEOPLE. Again!

Unbelievable.

NOWHERE in the OP you posted from Clinton's site is there ANY MENTION of curbing lawsuits by individuals or the government against banks or investment firms for predatory lending, fraudulent inducement, breach, etc. NOWHERE.

In fact, the class actions in those articles might just be set back by the little reform bill that OBAMA voted for! What irony!

Stop making things up and just admit you were wrong. My God, even a fellow Obama supporter explained in two seconds why you were full of it and you just brushed her aside!

[Tatiana]

40. In my OP I asked "why would we need to protect them from lawsuits?"

It is my contention that there is no need to protect mortgage companies from lawsuits. Period.

That still stands and I think she is framing the issue in a way that provides mortgage companies relief from the upcoming wave of lawsuits from not only individuals, but class-actions and other entities. The NY Times article I linked to provides some detail about who is suing who.

If the lawsuits are invalid, defendants will be given summary judgment.

We need to be making sure HUD is doing its job in the midst of this crisis and working through the FHA to help homeowners. The http://dodd.senate.gov/index.php?q=node/4324">"Hope for Homeowners Act" proposed by Sen. Dodd and Rep. Frank is a better start, IMO, where new loans will be based on a family’s ability to repay the loan, and there will be no investor or lender bailout.

You may disagree. It is your right.

Thanks for voicing your opinion.

[Maven]

41. OMG.

You clearly don't understand the basics of mortgage securities.

You don't even seem to have much background on the general issue.

The lawsuits that are relevant to her proposal have NOTHING TO DO with the NYTimes article or any lawsuit by an individual for wrongdoing. They have to do with ENFORCEMENT OF CONTRACTS that make it impossible to renegotiate mortgages. That is all. It's a measure to HELP homeowners work with mortgage administrators without interference from investment banks. It's a GOOD THING.

Please stop distorting the truth until you understand what you're talking about.

[Ysabel]

10. k and r (n/t)...

[Alexander]

13. Hmm, I wonder if this could be related to John Edwards staying neutral.

[powergirl]

14. That will piss off most of the lawyers in this country

I'm an attorney (divorce attorney) and the majority of actual practicing attorneys in the ABA and in this country are opposed to Tort Reform. I saw that I didn't know what Obama has said about this? I support Obama and he better not support this one!

Why does Clinton support cutting off ordinary Americans from the justice system? That is just not Democratic. I am so pissed off about this!!!! :wow:

[Tatiana]

15. .

:kick:

[anonymous171]

17. She is a corporate dem. after all.

Remember BC's "media deregulation" plans that gave us Fox and Limbaugh?

[boppers]

18. OMG. Protect the poor mega-corporations!

Make sure they can't be held liable for willfully writing shameful, misleading, and fraudulent contracts!

Yeah, Hillary, you're sure in this party for the little guy only making, oh, 1-5 million dollar a year.

[Maven]

19. *** WRONG. OP IS COMPLETELY FALSE. You're distorting the issue. ***

This is not "tort reform" in the traditional sense, i.e., legislation that makes it harder for individuals to sue corporations. You know, like the kind Barack Obama supported when he joined Senate Republicans to vote for the Class Action Fairness Act in 2005.

This is a measure to keep investment banks from tying the hands of mortgage administrators to prevent them from renegotiating with homeowners. Investment banks that repackaged mortgages into securities applied strict covenants to ensure that the debts were repaid at certain rates and on a regular schedule, to ensure their rate of return. This in turn restricted the mortgage administrators--the entities that actually collect payments from homeowners--from renegotiating or taking other remedial measures when the debtors got into trouble. This is why so many of these repackaged mortgages ended in swift foreclosure.

It's right in the article which you quoted and then seemingly IGNORED:

Right now, many mortgage companies are reluctant to help families restructure their mortgages because they’re afraid of being sued by the investment banks, the private equity firms and others who actually own the mortgage papers.

Clinton's proposal would prevent investment banks from enjoining mortgage administrators from renegotiating mortgages to save homes. This is a pro-consumer measure.

But whatever, shriek and swarm. That's what you came here to do, truth be damned.

[stillcool]

32. what does this do...

for the solvency of these mortgage companies or the banks?

[Maven]

36. That's a good question.

It could certainly make mortgage securities lose further value but at this point, people aren't sympathetic to the investment banks.

[Liberal In Texas]

20. Good grief. Just what we need. n/t

[tabasco]

23. The Clinton wing of the Democratic Party = Republicans.

Many are too ignorant to know it but Hillary is a republican.

If it walks like a duck and talks like a duck, it's a duck already!

Bill and Hillary have been corrupted by wealth and power and they will move the Democratic party even farther to the right than it is right now!

There will be no opposition party! WAKE UP PEOPLE!

[Armstead]

31. How about fucking regulating the financial industry instead?

Here's a novel concept. You take out a mortgage with a financial institution, and the responsibility for that mortgage stays with that financial institution.

What a unique concept.

[Cha]

33. I missed it..thanks, Tatiana!

Wonder if the citizens of PA and WV would be interested in this history of clinton?

[mckeown1128]

34. kick and rec...

good catch... I can't believe this.

[Maven]

35. You shouldn't believe it

OP is false.

[SunsetDreams]

43. I really don't understand

for the life of me how a democrat could do this, sorry.

Americans are drowning here, they need to be able to find a remedy in fraudulent mortgage schemes!

GRRRR!