Acorn: Senate Holds 1.7 Million Families' Foreclosure Fates in its Hands

Senate Holds 1.7 Million Families' Foreclosure Fates in its Hands
ACORN calls on Senate to concur with House and Obama in supporting judicial modifications

(Washington, DC) - For two years, ACORN has been fighting to change federal bankruptcy laws that are skewed toward the wealthy and riddled with Wall Street's favorite loopholes. Today, the Senate will take up an amendment from Senator Durbin that will balance the playing field for homeowners who are fighting foreclosure. According to Moody's Economy.com, adoption of this amendment will result in additional 1.725 million mortgage modifications (both voluntary and judicially imposed) to prevent foreclosure. This legislation has already passed the House by a wide margin.

"Today's vote is the ultimate test of whether a senator stands with Wall Street or with Main Street," said ACORN CEO Bertha Lewis.  "Industry lobbyists have put on the full-court press in their quest to defend bank shareholders' profits at the expense of American homeownership and the economy. 1.7 million foreclosures isn't just untold and unnecessary agony for so many families and communities, it is a prescription for a weaker economic recovery. Republicans who are hoping that President Obama fails in fixing the economy are surely hoping the Senate stands in his path today by rejecting judicial modifications."

Current federal bankruptcy law allows judges to re-write the terms of every kind of debt, from student loan debt to credit card debt, and mortgages secured by second homes, yachts, RVs, and any other kind of debt except the mortgage on a homeowner's primary residence. Senator Durbin's amendment would close this loophole and lift the ban on judicial modifications. Not only will this help homeowners who do have to enter bankruptcy, it will induce mortgage servicers and investors to approve more voluntary and more affordable modifications.

"President Obama's Making Home Affordable plan is a great first step, but now he needs the Senate to step up and do its part. And while the President is wisely spending $75 billion to prevent 3 to 4 million unnecessary foreclosures, the Senate's job is much easier, since the 1.7 million foreclosures it can prevent today come at no cost to the Treasury. This is an effective solution to fix our economy without resorting to more bailouts, so it should be a slam dunk," said Lewis. "Sadly, too many politicians are listening to Wall Street lobbyists instead of homeowners in their states, and looking forward to cashing those bailout-supported PAC checks for their re-election. The Joint Economic Committee of Congress has estimated that each foreclosure carries a cost to the economy of $78,000, so senators who reject judicial modifications will have a $134,550,000,000 economic albatross hung on their necks."

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ACORN is the nation's largest community organization of low- and moderate-income families, with over 450,000 member families organized into neighborhood chapters in 100 cities across the country. Since 1970 ACORN has taken action and won victories on issues of concern to our members.  Our priorities include: better housing for first time homebuyers and tenants, living wages for low-wage workers, more investment in our communities from banks and governments, and better public schools. ACORN is an acronym, and each letter should be capitalized. ACORN stands for the Association of Community Organizations for Reform Now. 

ACORN's website is http://www.acorn.org.