Senate To Debate Senator Dodd's Bank Of America Bail Out Bill
Saturday, 21. June 2008, 17:02:28
Current news on HR 5831 documents how the Congressional Payola system is flourishing and how its operation exasperates the credit and housing crisis so as to privatize profits to the accounts of the wealthy and elite, and socialize losses to the taxpayers.
The Dogwood Report relates that the Senate is going to debate Senator Dodd's Bank Of America mortgage industry bail out legislation and which eases the way for Bank of America's, BAC, purchase of Countrywide Financial, CFC: debate is scheduled in the Senate on Monday June 23, 2008.
The bill whose Senate version has been brought to the floor this week by Sen. Chris Dodd, D-CN, and Sen. Richard Shelby, R-AL. Dodd-Shelby would let mortgage lenders off the hook for bad loans, shifting the burden ultimately to taxpayers.
Ben Keele writes that Dodd, chairman of the Senate Banking, Housing and Urban Affairs Committee, has received approximately $70,000 in campaign contributions from Bank of America in the last year-and-a-half.
And Michael Winship writing in Truthout Let Me Call You Sweetheart ... Loans writes that according to the Center for Responsive Politics, Countrywide's political action committee gave Conrad $6,000 in 2005 and 2006, and over the last decade has donated $21,000 to Senator Dodd.
The Dodd-Shelby bill, The FHA Housing Stabilization and Homeownership Retention Act of 2008, hit the Senate floor this week amid controversy over sweetheart loan deals Dodd and other powerful politicians received from Countrywide Financial, the lender with the most exposure to subprime mortgages at risk of default.
The bill about to be voted on by the Senate would allow banks like Bank of America to pick their riskiest loans and dump them on the Federal Housing Administration. In exchange for taking just a 10% cut on the value of the loan, the banks would receive cold hard cash from U.S. taxpayers. Their risk would be eliminated, entirely shifted to the FHA and the U.S. government. Passage of the bill would make Bank of America’s acquisition of Countrywide much more profitable.
The Bank of America-Countrywide merger would also help solve a huge political embarrassment for neoliberals and Democrats in Congress. Rep. Barney Frank, D-MA, explained when asked about the discount loans Dodd received from Countrywide’s CEO: “The best thing for all of us is for Countrywide to just disappear. If Countrywide were a continuing entity we’d have to look at it, but they’re going out of business.”
The Provocateur relates Dodd/Frank is a boondoggle and bailout for irresponsible and well connected banks masquerading as a compassionate piece of legislation supposed to help the most vulnerable and unfortunate among us. It is also the centerpiece of Barack Obama's plan to reinvigorate the mortgage market. Lost among the shocking details of what we have learned about the cozy relationship between Chris Dodd, Countrywide and Bank of America is the fact that Barack Obama gave this bill his seal of approval.
In his defense of the bill, Barack Obama makes two misleading statements. First, he proclaims that this isn't a bailout of borrowers because they would now share in "any capital gain". While this is true, it is also beside the point. Right now, most of these borrowers have no capital gain. They currently owe more than their properties are worth. This bill would artificially lower their mortgage below the value of the property. In my opinion half of say $25k is better than zero. Furthermore, the banks would in fact take losses but far smaller than they would without the bailout. These banks need to sell these loans and they need cash. That's exactly what this bill provides. Furthermore, the only other option for these banks vis a vis these loans is foreclosure. In that case, not only would they get less than they would with this bill but only after months of legal haggling and headaches. Of course, this bill is a bailout for all involved, and it is obvious to anyone that analyzed the bill from the beginning.
Dodd/Frank would provide roughly $300 billion in funds to bail out troubled borrowers. Many times this would include not only giving these borrowers rates they would never qualify for on the open market, but it would include artificially lowering their loan amounts as well. For banks, the federal government, through FHA, would buy up many of their most troubled mortgages.
Banks are facing a "liquidity crisis" because they are holding onto mortgages they intended on selling to other parties. Since the open market is unwilling to buy them, it is quite a boon to get the government to do what the open market wouldn't.
The Washington Examiner story found one other interesting piece of information.
Only Barack Obama and Hillary Clinton have received more Bank of America money than Dodd during the current election cycle. Republican nominee John McCain slightly trails Dodd, with $64,000 in reported Bank of America contributions.
From the beginning this bill was nothing more than packaging. It was billed as help for struggling homeowners. Of course, it turns out it is much more than that. This bill is really a bailout to irresponsible and greedy lenders. What it really is is a bill to make the buyout of Countrywide by Bank of America a financial boon. Of course, this is the bill that Barack Obama vouched for.
There is of course nothing more than rumor and innuendo that Obama was directly involved in any corruption. That is frankly besides the point. What he did was vouch for a corrupt bill. If someone vouched for Ishtar their movie recommendations would no longer be trusted. The same would be true if someone recommended an incompetent or corrupt lawyer, doctor, or mechanic. So, what do we make of a politician that vouches for a bill that later turns out to be corrupt? In fact, they probably didn't realize that the bill was corrupt, however all corrupt bills are bad bills. If a politician recommends a corrupt bill, no matter the reason, their judgement must come into question.
That's what this bill always was. That's how I described it from the beginning. I don't see that it was corrupt, however I did know right away that it was a bad bill. Why didn't Barack Obama make the same judgement? If he didn't what are we to make of his famous judgement? He has made judgement the centerpiece of his election theme. Yet, he vouched for a bill that has now been exposed as corrupt in the worst sort of a way. That is the message that I would be hammering if I am John McCain. If Barack Obama is going to make judgement an issue, then he needs to account for his support for this corrupt bill.
Definitely, as OCRENTER relates, Dodd is one of the Subprime Six; and BitsBlog has it right: Bank of America bought Chris Dogg. It’s time for the Senate ethics committee to investigate the corrupt Dodd and time for Dodd to resign from the Senate.
The Resourceful Bear reminds that our country is like a fish, it rots from the head down.
The Dogwood Report relates that the Senate is going to debate Senator Dodd's Bank Of America mortgage industry bail out legislation and which eases the way for Bank of America's, BAC, purchase of Countrywide Financial, CFC: debate is scheduled in the Senate on Monday June 23, 2008.
The bill whose Senate version has been brought to the floor this week by Sen. Chris Dodd, D-CN, and Sen. Richard Shelby, R-AL. Dodd-Shelby would let mortgage lenders off the hook for bad loans, shifting the burden ultimately to taxpayers.
Ben Keele writes that Dodd, chairman of the Senate Banking, Housing and Urban Affairs Committee, has received approximately $70,000 in campaign contributions from Bank of America in the last year-and-a-half.
And Michael Winship writing in Truthout Let Me Call You Sweetheart ... Loans writes that according to the Center for Responsive Politics, Countrywide's political action committee gave Conrad $6,000 in 2005 and 2006, and over the last decade has donated $21,000 to Senator Dodd.
The Dodd-Shelby bill, The FHA Housing Stabilization and Homeownership Retention Act of 2008, hit the Senate floor this week amid controversy over sweetheart loan deals Dodd and other powerful politicians received from Countrywide Financial, the lender with the most exposure to subprime mortgages at risk of default.
The bill about to be voted on by the Senate would allow banks like Bank of America to pick their riskiest loans and dump them on the Federal Housing Administration. In exchange for taking just a 10% cut on the value of the loan, the banks would receive cold hard cash from U.S. taxpayers. Their risk would be eliminated, entirely shifted to the FHA and the U.S. government. Passage of the bill would make Bank of America’s acquisition of Countrywide much more profitable.
The Bank of America-Countrywide merger would also help solve a huge political embarrassment for neoliberals and Democrats in Congress. Rep. Barney Frank, D-MA, explained when asked about the discount loans Dodd received from Countrywide’s CEO: “The best thing for all of us is for Countrywide to just disappear. If Countrywide were a continuing entity we’d have to look at it, but they’re going out of business.”
The Provocateur relates Dodd/Frank is a boondoggle and bailout for irresponsible and well connected banks masquerading as a compassionate piece of legislation supposed to help the most vulnerable and unfortunate among us. It is also the centerpiece of Barack Obama's plan to reinvigorate the mortgage market. Lost among the shocking details of what we have learned about the cozy relationship between Chris Dodd, Countrywide and Bank of America is the fact that Barack Obama gave this bill his seal of approval.
In his defense of the bill, Barack Obama makes two misleading statements. First, he proclaims that this isn't a bailout of borrowers because they would now share in "any capital gain". While this is true, it is also beside the point. Right now, most of these borrowers have no capital gain. They currently owe more than their properties are worth. This bill would artificially lower their mortgage below the value of the property. In my opinion half of say $25k is better than zero. Furthermore, the banks would in fact take losses but far smaller than they would without the bailout. These banks need to sell these loans and they need cash. That's exactly what this bill provides. Furthermore, the only other option for these banks vis a vis these loans is foreclosure. In that case, not only would they get less than they would with this bill but only after months of legal haggling and headaches. Of course, this bill is a bailout for all involved, and it is obvious to anyone that analyzed the bill from the beginning.
Dodd/Frank would provide roughly $300 billion in funds to bail out troubled borrowers. Many times this would include not only giving these borrowers rates they would never qualify for on the open market, but it would include artificially lowering their loan amounts as well. For banks, the federal government, through FHA, would buy up many of their most troubled mortgages.
Banks are facing a "liquidity crisis" because they are holding onto mortgages they intended on selling to other parties. Since the open market is unwilling to buy them, it is quite a boon to get the government to do what the open market wouldn't.
The Washington Examiner story found one other interesting piece of information.
Only Barack Obama and Hillary Clinton have received more Bank of America money than Dodd during the current election cycle. Republican nominee John McCain slightly trails Dodd, with $64,000 in reported Bank of America contributions.
From the beginning this bill was nothing more than packaging. It was billed as help for struggling homeowners. Of course, it turns out it is much more than that. This bill is really a bailout to irresponsible and greedy lenders. What it really is is a bill to make the buyout of Countrywide by Bank of America a financial boon. Of course, this is the bill that Barack Obama vouched for.
There is of course nothing more than rumor and innuendo that Obama was directly involved in any corruption. That is frankly besides the point. What he did was vouch for a corrupt bill. If someone vouched for Ishtar their movie recommendations would no longer be trusted. The same would be true if someone recommended an incompetent or corrupt lawyer, doctor, or mechanic. So, what do we make of a politician that vouches for a bill that later turns out to be corrupt? In fact, they probably didn't realize that the bill was corrupt, however all corrupt bills are bad bills. If a politician recommends a corrupt bill, no matter the reason, their judgement must come into question.
That's what this bill always was. That's how I described it from the beginning. I don't see that it was corrupt, however I did know right away that it was a bad bill. Why didn't Barack Obama make the same judgement? If he didn't what are we to make of his famous judgement? He has made judgement the centerpiece of his election theme. Yet, he vouched for a bill that has now been exposed as corrupt in the worst sort of a way. That is the message that I would be hammering if I am John McCain. If Barack Obama is going to make judgement an issue, then he needs to account for his support for this corrupt bill.
Definitely, as OCRENTER relates, Dodd is one of the Subprime Six; and BitsBlog has it right: Bank of America bought Chris Dogg. It’s time for the Senate ethics committee to investigate the corrupt Dodd and time for Dodd to resign from the Senate.
The Resourceful Bear reminds that our country is like a fish, it rots from the head down.
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