One year ago Obama sent a letter to Bernanke and Paulson regarding housing foreclosures

[Life Long Dem]

Obama's Year Old Letter to Bernanke and Paulson Regarding Housing Crisis

March 22, 2007

The Honorable Ben Bernanke
Chairman
Board of Governors of the Federal Reserve System
20th Street and Constitution Avenue, NW
Washington, D.C. 20551

The Honorable Henry Paulson
Secretary
U.S. Department of Treasury
1500 Pennsylvania Ave, NW
Washington, D.C. 20220


Dear Chairman Bernanke and Secretary Paulson,

There is grave concern in low-income communities about a potential coming wave of foreclosures. Because regulators are partly responsible for creating the environment that is leading to rising rates of home foreclosure in the subprime mortgage market, I urge you immediately to convene a homeownership preservation summit with leading mortgage lenders, investors, loan servicing organizations, consumer advocates, federal regulators and housing-related agencies to assess options for private sector responses to the challenge.

We cannot sit on the sidelines while increasing numbers of American families face the risk of losing their homes. And while neither the government nor the private sector acting alone is capable of quickly balancing the important interests in widespread access to credit and responsible lending, both must act and act quickly.

Working together, the relevant private sector entities and regulators may be best positioned for quick and targeted responses to mitigate the danger. Rampant foreclosures are in nobody's interest, and I believe this is a case where all responsible industry players can share the objective of eliminating deceptive or abusive practices, preserving homeownership, and stabilizing housing markets.

The summit should consider best practice loan marketing, underwriting, and origination practices consistent with the recent (and overdue) regulators' Proposed Statement on Subprime Mortgage Lending. The summit participants should also evaluate options for independent loan counseling, voluntary loan restructuring, limited forbearance, and other possible workout strategies. I would also urge you to facilitate a serious conversation about the following:

* What standards investors should require of lenders, particularly with regard to verification of income and assets and the underwriting of borrowers based on fully indexed and fully amortized rates.

* How to facilitate and encourage appropriate intervention by loan servicing companies at the earliest signs of borrower difficulty.

* How to support independent community-based-organizations to provide counseling and work-out services to prevent foreclosure and preserve homeownership where practical.

* How to provide more effective information disclosure and financial education to ensure that borrowers are treated fairly and that deception is never a source of competitive advantage.

* How to adopt principles of fair competition that promote affordability, transparency, non-discrimination, genuine consumer value, and competitive returns.

* How to ensure adequate liquidity across all mortgage markets without exacerbating consumer and housing market vulnerability.

Of course, the adoption of voluntary industry reforms will not preempt government action to crack down on predatory lending practices, or to style new restrictions on subprime lending or short-term post-purchase interventions in certain cases. My colleagues on the Senate Committee on Banking, Housing and Urban Affairs have held important hearings on mortgage market turmoil and I expect the Committee will develop legislation.

Nevertheless, a consortium of industry-related service providers and public interest advocates may be able to bring quick and efficient relief to millions of at-risk homeowners and neighborhoods, even before Congress has had an opportunity to act. There is an opportunity here to bring different interests together in the best interests of American homeowners and the American economy. Please don't let this opportunity pass us by.


Sincerely,


Barack Obama
United States Senator

http://tpmcafe.talkingpointsmemo.com/talk/2008/03/obamas-year-old-letter-to-bern.php

[Norrin Radd]

1. kr

[FrenchieCat]

2. In other words, he did a year ago, what Hillary is just now doing.....

[Life Long Dem]

4. It's the experience thing.

It was odd, while I'm reading this Hillary came on talking about experience.

[WDIM]

12. Yep, but to fair Hillary is very tired....

[Life Long Dem]

3. I found it on DailyKos.

The OP said it was sitting at TPMCafé for a couple of days but no one else, it seems, has picked up on it.

[SunsetDreams]

5. more here:

Protect Homeownership and Crack Down on Mortgage Fraud

Obama will crack down on fraudulent brokers and lenders. He will also make sure homebuyers have honest and complete information about their mortgage options, and he will give a tax credit to all middle-class homeowners.

Create a Universal Mortgage Credit: Obama will create a 10 percent universal mortgage credit to provide homeowners who do not itemize tax relief. This credit will provide an average of $500 to 10 million homeowners, the majority of whom earn less than $50,000 per year.

Ensure More Accountability in the Subprime Mortgage Industry: Obama has been closely monitoring the subprime mortgage situation for years, and introduced comprehensive legislation over a year ago to fight mortgage fraud and protect consumers against abusive lending practices. Obama's STOP FRAUD Act provides the first federal definition of mortgage fraud, increases funding for federal and state law enforcement programs, creates new criminal penalties for mortgage professionals found guilty of fraud, and requires industry insiders to report suspicious activity.

Mandate Accurate Loan Disclosure: Obama will create a Homeowner Obligation Made Explicit (HOME) score, which will provide potential borrowers with a simplified, standardized borrower metric (similar to APR) for home mortgages. The HOME score will allow individuals to easily compare various mortgage products and understand the full cost of the loan.

Create Fund to Help Homeowners Avoid Foreclosures: Obama will create a fund to help people refinance their mortgages and provide comprehensive supports to innocent homeowners. The fund will be partially paid for by Obama's increased penalties on lenders who act irresponsibly and commit fraud.

Close Bankruptcy Loophole for Mortgage Companies: Obama will work to eliminate the provision that prevents bankruptcy courts from modifying an individual's mortgage payments. Obama believes that the subprime mortgage industry, which has engaged in dangerous and sometimes unscrupulous business practices, should not be shielded by outdated federal law.

http://www.barackobama.com/issues/economy/#home-ownership

_______________________________________________________________________

PROTECTING HOMEOWNERSHIP & CRACKING DOWN
ON MORTGAGE FRAUD

The implosion of the subprime lending industry threatens to bring foreclosure to over two million households
nationwide, and is spreading devastating impacts to the economy as a whole. Over the past several years, while
predatory lenders were driving low-income families into financial ruin, ten of the country’s largest mortgage
lenders were spending more than $185 million lobbying Washington to let them get away with it.
Barack Obama recognizes that the real victims in the subprime mortgage crisis are not the lenders, but the
millions of borrowers who followed the rules and whose only crime was taking out mortgages that lenders told
them they could afford. Normally, these borrowers could avoid foreclosure by refinancing their mortgages or
selling their homes. Today’s borrowers lack the refinancing and selling protections that used to help out
families during a tough period. Too many families are unable to refinance because no one will lend to them,
and they are unable to sell their homes because the housing market has fallen. As president, Obama will fight to
ensure more Americans can achieve and protect the dream of home ownership.

more here:
http://www.barackobama.com/pdf/MortgageFactSheet.pdf

[Window]

6. K/R.

:kick:

[mucifer]

7. Thanks for the post! It's more than a campaign promise.

It's something he's been working on for a year. This is good.

[vi5]

8. But he voted present....derheherherheher

Yet another example of him being on record as addressing a problem and it's potential pitfalls before it actually gets to the point of pulling the country down.

Yeah, I can see why someone wouldn't want a person who thought that way and had that kind of foresight to lead the country.

[formercia]

9. Foresight is a lot better than hindsight.

This is good stuff.

[mattclearing]

10. Judgment and foresight matter.

[bigtree]

11. Fact Check: Hillary's Emergency Housing Proposal

Fact Check: Hillary's Emergency Housing Proposal

3/24/2008 6:17:33 PM

The Obama campaign claims that the Emergency Working Group proposed by Hillary today is the same as a proposal introduced by Sen. Obama a year ago. It is not.

If Barack Obama can’t understand the difference between the specific Emergency Working Group on Foreclosures Senator Clinton proposed today and the amorphous proposal he put forward over a year ago, then he clearly doesn’t understand what is needed to solve the housing crisis. The Emergency Working Group Senator Clinton is calling for would zero in on the best and fastest way to facilitate the bulk restructuring of mortgages and is specifically tasked with determining how to implement new legislation by Representative Frank and Senator Dodd.

Yesterday, Hillary urged President Bush to immediately convene a working group that would lay out a plan to achieve broad-scale restructuring of at-risk mortgages within three weeks:

“I am writing to urge you to immediately convene an Emergency Working Group on Foreclosures to investigate how to most effectively achieve broad-scale restructuring of at-risk mortgages. As you know, Rep. Frank and Sen. Dodd have proposed legislation to expand the Federal Housing Administration’s capacity to guarantee restructured mortgages, and to facilitate an auction for mortgage pools among private sector actors. This legislation responds to the fact that the existing FHA Secure program is inadequate in addressing the scale of restructuring needed, and is not working to unfreeze the mortgage markets.

…You can get ahead of these issues by immediately calling for an Emergency Working Group to report back to Congress and the Administration within three weeks on how to solve this crisis while focusing first and foremost on keeping families in their homes.

The Working Group should be headed by a non-partisan group of eminent leaders like Alan Greenspan, Paul Volcker, and Bob Rubin – each of whom supports one of the remaining candidates in the Presidential race. The Working Group should focus on key questions about whether and how we can use an expanded FHA guarantee to facilitate a private sector auction as proposed in the Frank/Dodd legislation.

Last year, Sen. Obama suggested convening a group to talk about how the private sector might act to address at-risk mortgages:

On March 22, 2007, Senator Obama asked President Bush to “convene a homeownership preservation summit with leading mortgage lenders, investors, loan servicing organizations, consumer advocates, federal regulators and housing-related agencies to assess options for private sector responses to the challenge.”

http://facts.hillaryhub.com/archive/?id=6728

[Smelting Pot]

14. Fact Check: President Obama Will Take This Under Advisement

I'm sure President Obama will find a way to work in some of Senator Clinton's ideas into his plan for the housing crisis.

Thank you for your support.

[bigtree]

15. if he's elected

hope so.

[stevenleser]

18. What a POTUS capable person should do is recognize there is a problem

and get a team working on it. Obama recognized this and urged action long before most people were aware there was an issue. That is what is known as leadership.

[bigtree]

20. great, but he was still BEHIND Hillary Clinton on this.

[stevenleser]

24. Only if you are talking about bending time and space.

Since this isnt a discussion about Quantum mechanics and relativity, Obama coming out and saying something needs to be done about this a year before Hillary did means she was behind him.

[Life Long Dem]

21. Typical of Clinton to try to take credit for something Obama introduced a year ago.

Was the paper for the letter Obama used the wrong weight paper as well?

[chocome]

13. Obama is a copycat: One year ago Clinton Reintroduces the 21st Century Housing Act

This is the telling difference between a junior senator like Obama with no in depth experience on the political arena and Hillary. Obama is known for his speeches and letters he wrote, Hillary has 30 years of experience. All her records from her time in Senate are out in the open, there is no record from Obama state Senate years...he had only one assistant he says...

Well, the day BEFORE Obama wrote his letter...Hillary Clinton actually addressed the issue, arguing for legislation would Modernize the Federal Housing Administration and Provide a Strong Alternative to Subprime and Risky Mortgages.



And here is her remarks on subprime lending to the National Community Reinvestment Coalition dated March 15th...before Obamas letters

http://clinton.senate.gov/news/statements/details.cfm?id=270820&&

And a youtube video

http://www.youtube.com/watch?v=O8lIxuame_E

[Life Long Dem]

22. And this addresses foreclosures in what way? The homeowners foreclosed on already have a mortgage.

That's the issue Obama deals with.

[JTFrog]

16. Fact Check: Hillary proposes Greenspan lead foreclosure group.

http://www.reuters.com/article/vcCandidateFeed1/idUSN2430663920080324

http://www.nytimes.com/2008/03/24/us/politics/24text-clinton.html?_r=2&adxnnl=1&oref=slogin&pagewanted=all&adxnnlx=1206381777-tBSVqfF5U8DuVXDCQSw6bQ&oref=slogin

'Nuff said.

*added link to her speech to quiet the storm of no she didn't, yes she did crap

[stevenleser]

17. Greenspan is one of the people who got us into this mess. How is he the right choice?

Mr. Laissez Faire Capitalism isnt the person for this.

[JTFrog]

19. Clinton doesn't believe in Change. n/t

[PerpetuallyDazed]

23. ...and what was McCain doing around this time?

probably nothing, but I'm looking for specifics.