Unsurprisingly, President Bush is threatening to veto the mortgage relief bill favored by Senate Democrats that would give more bargaining power to homeowners who face foreclosure. Essentially, banks and friends of banks are pissed because Congress wants to give bankruptcy judges the authority to rewrite the terms of mortgage loans -- as they do with other types of loans -- when a homeowner declares bankruptcy. It's interfering with the contracts, they whine. But as Dean Baker reminds us, something very similar happened three years ago. This is an interesting charge to come from the Bush administration and to be associated with the banks. Those old enough to remember may recall the bankruptcy reform of 2005. This bill altered the enforcement of loans in the opposite direction, making it easier for lenders to collect from debtors. It was applied to loans that had already been contracted not just future debt yet to be incurred, in that sense, it interfered with contracts.
Clearly, neither the Bush administration nor the banks, both of whom eagerly supported the bankruptcy reform bill, have any principled objection to interfering with contracts. Their objection seems to be based more on whom the interference is favoring. The reporters covering this issue should have provided readers with this background.
Sucks to be on the short end of the stick in Bush's America.
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Adam Doster, a contributing editor at In These Times, is a Chicago-based freelance writer and former reporter-blogger for Progress Illinois.
