Senate Vote: Bankruptcy Relief for Homeowners
Summary: Allows bankruptcy courts to modify loans for homeowners who are facing foreclosure
Result: Motion to Table Passed
A vote against the motion was counted as a + vote (in line with LCCR's position)
View individual member votes on this bill by state:
Bill Name: Foreclosure Prevention Act of 2008
Bill Number: S. 2636
Issue: Housing/Lending
Date: 04/03/08
Roll Call No. 88
During consideration of S. 2636, the Foreclosure Prevention Act of 2008, Senator Richard Durbin, D. Ill., offered an amendment that would change bankruptcy laws to assist many homeowners who are caught up in the ongoing mortgage foreclosure crisis.
For mortgages that were otherwise destined to end in foreclosure, bankruptcy courts would be able to reduce the loan's principal and interest payments to affordable, fair market value levels.
LCCR supported the Durbin amendment. It was a limited proposal that could save hundreds of thousands of borrowers from losing their homes, through a "Chapter 13" bankruptcy procedure that can already be used for vacation homes, yachts, farms, and investment properties.
Such relief is important because many of the millions of borrowers who are likely to face foreclosure in the next several years were victims of "predatory" lending practices, involving the use of deceptive and unsustainable loan terms.
In addition, foreclosures affect not only individual households, but also affect entire neighborhoods through reduced property values, blight, public safety hazards, and drains on local government resources. The Durbin amendment would prevent many foreclosures without imposing any cost on taxpayers, so it could not be labeled as a "bailout."
Ironically, many of the lenders responsible for the foreclosure crisis have received bankruptcy relief themselves, yet the lending industry lobbied very aggressively against letting borrowers do the same.
Opponents sought to block the Senate from moving forward with consideration of the Durbin amendment by using a filibuster – a procedural tactic that prevents further action, and which can only be overcome by a 60-vote margin.
Sensing that he did not have enough votes to defeat the filibuster, Sen. Durbin instead made a motion to table, or withdraw his amendment – a motion that he himself opposed.
Result: The Senate agreed to table the Durbin amendment (58-36).
