I wrote the following to Senators McCaskill & Bond. I urge you to do the same, because it's not only good public policy, it's good legislation in light of our current econopocalypse. Cut & paste at will. (And a tip of the crust to the Buff Crone!)
Dear Senator __________,
If a bankruptcy judge already has the power to restructure the debt on a weathy citizen’s yacht or vacation home, it is not unreasonable to demand that a bankruptcy judge should also have the power to restructure the debt on the primary residence of a modest citizen.
Likewise, if there is merit in Congress’s weaving a safety net of taxpayer dollars to protect multinational corporations, it is not unreasonable to demand that Congress should be at least as quick to provide the same protections to individual American citizens.
I write to ask your support of S. 2136: Helping Families Save Their Homes in Bankruptcy Act of 2008. Only homeowners declaring bankruptcy who are in imminent danger of foreclosure are eligible for mortgage modifications. The benefit to bankrupt homeowners is obvious. The benefit to other homeowners is the preservation of the value of our investments.
This bill would also assist mortgage lenders. Upon foreclose, lenders generally receive only the current resale value of the home. Without the protection of this law, market values will continue to free-fall, reducing the amount lenders stand to recover.
Your support would help stabilize the central cause of community economic instability in a fiscally sound manner. Unlike other corporate bailouts and loans, or a new transfusion of funds to mortgage lenders, this law does not add to the public burden, create additional bureaucracy, or require new regulations. Bankruptcy courts are already equipped to do what the law proposes, because they currently reset valuations on non-primary residences and business property as a matter of course.
Your support would recognize that it is unfair to blithely blame the current situation on irresponsible consumer spending, and recognize that most bankruptcies arise from misfortunes like job cuts and medical bills.
Your support would correct some of the great injustices that arose from the outrageous Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 — a law plainly intended to benefit incautious creditors at the expense of the very purpose of bankruptcy law.
Your support would acknowledge that the individual homeowner cannot be blamed for the current economic downturn, and should not be asked to shoulder the entire burden while the financial experts are backstopped at the public expense.
I look forward to your response.