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Dear Senator Feinstein:
The banks are well funded and represented in their lobbying efforts. By definition, those who require bankruptcy relief do not have the resources to meet this effort "head on". Instead, we rely on real voters and organizations such as the National Association of Consumer Bankruptcy Attorneys ("NACBA") to get our message to you. We can only hope that our Congress members understand that bankers represent a miniscule percentage of the voting electorate and that the majority of voters in this Country are getting really tired of hearing about bank government bailouts which never seem to trickle down.
There is blame aplenty for the mortgage crisis. Everyone is at fault from the homeowner who lied on a loan application to the mortgage broker who encouraged or facilitated such behavior to the lenders who failed to do any due diligence because of those who were willing to bundle and purchase these loans without themselves doing any due diligence. While everyone shares some of the responsibility for these problems, only the banks have thus far received any meaningful government assistance - even as banks continue to generate obscene profits by running credit card operations at unconscionable rates.
The Durbin proposal, modified to permit some recapture by lenders from any upside appreciation in property values, makes sense and finally gives "the little guy" some relief. But here, in California, we have yet another problem. Because our property values are traditionally well above national averages, many California homeowners are simply INELIGIBLE for Chapter 13 relief. Chapter 13 is the underlying legal process used to implement the Durbin proposal. It does Californians little good to have a Durbin proposal enacted if they cannot qualify for Chapter 13 relief in the first instance.
There are consumer bankruptcy lawyer groups up and down our State. Our local organization in the Los Angeles area is the Central District Consumer Bankruptcy Attorneys Association ("CDCBAA") which boasts nearly 200 consumer bankruptcy attorneys. Subject to concerns about our tax exempt status as a trade association, we would welcome the opportunity to meet and speak with you about the Durbin proposal, about the CHEX blacklist problem, about the complete and utter failure of voluntary mortgage modification programs, about credit card collection practices, about Court decisions which preclude people from utilizing the Fair Debt Collection Practices Act remedies if they otherwise need or want bankruptcy protection, and about other related problems which your constituents experience on a daily basis. We hope that you will find the time to meet with us so that we can tell our clients that you have taken the time to hear their concerns.
David A. Tilem
Certified Bankruptcy Specialist*
Law Offices of David A. Tilem (a debt relief agency)
206 N. Jackson Street, #201, Glendale, CA 91206
Tel: 818-507-6000 Fax: 818-507-6800
* Bankruptcy specialist cert. by State Bar of CA Bd of Legal Specialization.
on
Sent: Wednesday, May 27, 2009 2:39 PM
To:
davidtilem@tilemlaw.com
Subject: U.S. Senator Dianne Feinstein responding to your message
Dear Mr. Tilem:
Thank you for writing to me to share your thoughts on legislation that would allow bankruptcy courts to modify the terms of home loans. I appreciate hearing from you on this important subject.
California is one of the states hardest hit by the foreclosure crisis. Approximately 520,000 homes received a foreclosure filing in California in 2008, and more than 2.3 million homes received a foreclosure filing nationwide.
Foreclosures are not in anyone's best interest. While they are a catastrophe for the homeowner, they also leave the lender with a property that has to be resold, frequently at a loss, and the neighborhood with an empty house that is often not being maintained. When this happens, communities can be decimated, local economies suffer, and crime often increases.
On January 6, 2009, Senator Richard Durbin (D-IL), introduced S. 61, the "Helping Families Save Their Homes in Bankruptcy Act." I am an original co-sponsor of this bill because I believe it will help to stem the current foreclosure crisis. The bill would amend the bankruptcy code to eliminate a provision that prohibits bankruptcy judges from modifying mortgage loans on primary residences. The bankruptcy court would be authorized to extend the time allowed for repayment of a mortgage loan, in order to reduce the debtor's monthly payment to a feasible amount. The bill would also allow bankruptcy judges to convert escalating adjustable rate mortgages into fixed-rate mortgages, at a reasonable rate of return for the bank.
On March 5, 2009, the House of Representatives passed a companion version of this legislation (H.R. 1106) with similar provisions by a vote of 234-191. It is expected that this legislation will come before the Senate shortly.
I believe that Congress must do everything possible to help solve the current foreclosure crisis and keep struggling homeowners in their homes. I appreciate hearing your views on this matter. Please know that I will be sure to keep your comments in mind should this bill or similar legislation come before me for consideration in the Senate.
Again, thank you for contacting me. If you have additional questions or concerns, please feel free to contact my Washington, D.C. staff at (202) 224
Sincerely yours,
Dianne Feinstein
United States Senator
Further information about my position on issues of concern to California and the Nation are available at my website
http://feinstein.senate.gov/public/. You can also receive electronic e-mail updates by subscribing to my e-mail list at
http://feinstein.senate.gov/public/inde ... nup.Signup.
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