Fight building over judges redoing mortgages (Banks are spending big, lobbying against it) [View All]

Source: AP

WASHINGTON (AP) — Most congressional Democrats say the quickest way to save homeowners like Troy Butler of Saginaw, Mich., is to let them declare bankruptcy and allow judges to dictate new mortgage terms.

Easy, except the lenders that would absorb the pain — and lose control of any deals to ease the terms — do not want to get dragged into bankruptcy court by millions of overextended borrowers.

Butler, 40, is a laid-off General Motors worker who has filed for bankruptcy. But the bankruptcy court has no authority to change the terms of his $90,000-plus mortgage that is more than double the value of his home.

A bill to give judges authority to alter loan terms for primary residences may be the quickest way to arrest the housing market's collapse. Most Democrats in the House and Senate support that plan. President Barack Obama told Democratic leaders Friday he also backs it, according to a Senate aide who was not authorized to be quoted by name.

But 10 groups representing the lending industry and other businesses are fighting back fiercely. Several have engaged portions of their lobbying machines to stop the legislation. The groups spent $83 million in lobbying on multiple issues in 2008, a figure that shows the power of the banking and investing industry and their business supporters.

Read more: http://www.google.com/hostednews/ap/article/ALeqM5j6hZfAW13d4RF-n9BaLN42zEuWigD95U7UJ80

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The other article today says the banks are claiming not to be spending our bailout money to lobby for more bailout money. But the article does state the banks are spending a ton of money on lobbying.

Well, this article highlights on what lobbying issue they are spending our bailout money. Turns out we are funding them in their fight against us. They are using our money to stop us in our efforts to renegotiate our mortgages.