A review of lobbying reports filed indicates that finance, insurance and real estate (FIRE) interests paid over $42 million to lobbyists who worked to defeat mortgage write-down in bankruptcy (cramdown) in the first quarter of 2009, as well as other anti-consumer legislation such as capping credit card interest rates.
Sixty organizations filed lobbying reports for the first quarter of 2009 indicating that they had paid lobbyists to work on the issue (see chart). Because lobbying reports don’t break down how much money was devoted to lobbying on a specific issue it’s not possible to break down a total spent on cramdown alone, but lobbying against H.R. 1106, H.R. 200 and S. 61, the Helping Families Save Their Homes Act was a priority for those organizations and lobbyists listed.
Organizations that lobbyied on the issue, but whose lobbying efforts in 1Q were significantly devoted to non-banking issues (The Chamber of Commerce, John Deere, General Electric) were not included in the total.
The legislation, which would have allowed judges to write down mortgage principle to current market values, could have played a significant role in stemming the foreclosure crisis. It is estimated that it would have prevented 20% of foreclosures at no cost to the taxpayers. Recently, Senator Richard Durbin gave a speech on the floor of the Senate where he indicated the banks "own us." He also indicated that between now and 2012, some 8 million homeowners may lose their houses in foreclosure.