news

The House Financial Services Committee approved an amendment offered by Congressman Bill Posey (R-Rockledge) which calls on the Committee to conduct oversight into the impact of any cram-down legislation should it become law. Posey offered his amendment to the Financial Services Committee’s Oversight Plan, which maps out the guidelines for how the Committee conducts oversight.

“It’s a small victory, but a good one,” said Congressman Posey. “It’s about being responsible for the policies that we enact here in Congress. All too often in government, the left hand doesn’t know what the right hand is doing and the American people end up footing the bill. Congress regularly creates laws and programs without following up to study the effects of those decisions until it’s too late. My amendment will direct my committee to evaluate legislation approved by another committee that may have unintended adverse consequences for banks and ultimately the taxpayers.”

Posey’s amendment applies to legislation that would allow bankruptcy judges broad authority to modify, after the fact, the terms of principle residence mortgages. Such imposed modifications would bring additional risk and uncertainty to an already volatile mortgage market and would make home loans more expensive for responsible borrowers and less available for all Americans. Last week, Congressman Posey joined a bipartisan majority in Committee to approve an alternate bill that encourages lenders to make loan modifications on a voluntary basis and offers lenders important liability protections when they alter loans. This should make it more likely that lenders will modify troubled loans.