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Ellen Tauscher introduces anti-foreclosure bill

Rep. Ellen Tauscher, D-Alamo, introduced a bill Wednesday that would let the California Housing Finance Agency issue an estimated $10 billion in new bonds to help refinance “underwater” mortgages and jump-start growth in neighborhoods devastated by home foreclosures.

The bill also would grant CalHFA the power to use Troubled Assets Relief Program (TARP) money to help families refinance their homes at a price they can afford in order to avoid foreclosure.

“Foreclosures are decimating neighborhoods from Fairfield to Antioch and Oakley,” Tauscher said in her news release. “This legislation will help families in the hardest hit areas get the additional resources they need to stay in their homes and keep these vibrant communities from disappearing.”

Tauscher’s co-authors on the bill are Zoe Lofgren, D-San Jose; Dennis Cardoza, D-Atwater; Shelley Berkley, D-Nev.; and Maurice Hinchey, D-N.Y.

Cardoza’s Central Valley district includes more than half of the city of Stockton, which has been rocked by one of the nation’s highest foreclosure rates. “As I have continued to say, the foreclosure crisis remains at the heart of our nation’s economic crisis. It is imperative that we pursue all means to address this problem and ensure that taxpayer funds are being used in the most responsible way,” he said.

UPDATE @ 8:36 A.M. THURSDAY: Click here for a copy of the bill.

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Barbara Lee: We’re not getting enough HUD help

The U.S. Department of Housing and Urban Development (HUD) has released a formula that determines funding levels for communities decimated by the foreclosure crisis, with an estimated $10.3 million directed to Alameda County and $8.2 million of that reserved for Oakland.

And Rep. Barbara Lee, D-Oakland, isn’t happy.

“Though I am pleased we were able to secure this much needed funding for our communities being devastated by the foreclosure crisis, I remain concerned about the overall California allocation,” she said in a release issued this afternoon. “Several of my colleagues and I have written a letter to HUD Secretary Steve Preston calling for a review of the formula and asking that it be adjusted to recognize the devastating impact of the foreclosure crisis in the state of California.”

Under H.R. 3221, the Foreclosure Prevention Act signed into law July 30, HUD will disperse $3.92 billion in CDBG funding nationwide with $145 million in funding going to California; the money is to be used to buy and rehabilitate foreclosed properties that have been vacant for more than 90 days, as a means of restoring home values and reducing blight and crime in hard-hit neighborhoods.

Yet, Lee notes, California is slated to receive $12 million less of this CDBG funding than Florida.

Oakland Mayor Ron Dellums, Assemblymember Sandré Swanson and Alameda County Supervisor Keith Carson are on board with Lee’s call for a re-examination of the funding formula. (It’s not surprising to see all of them on the same page, as Lee, Swanson and Carson all worked for Dellums when he held the 9th Congressional District seat Lee now occupies.)

“With regards to the issue of foreclosures, anyone familiar with this crisis knows that the city of Oakland and the county of Alameda have been hit extremely hard,” Dellums said in Lee’s release. “Many of Oakland’s neighborhoods have been devastated by this crisis, and I join my colleagues in expressing our disappointment in what appears to be a fundamentally flawed and unfair formula.”

Said Carson: “California has the second highest foreclosure rate in the country, second only to Nevada. The HUD allocation of $2 million does not adequately address the needs of working families in our communities who are struggling to hold onto their property.”

And Swanson agreed time is of the essence “in dealing with long-vacant foreclosed properties. Increasing blight attracts crime, bringing down property values, and straining local police services that are often stretched too thin already. Given the incredibly high rate of foreclosures in the State, it is imperative that HUD reexamines its funding formula to ensure that California receives the funds it needs to properly address this crisis.”

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The Rick Davis/Freddie Mac lie, compounded

Remember, I’ve resolved here to call a lie a lie, not a “spin” or an “exaggeration.” And this case, readers, sounds to me like a lie told to cover up a lie.

Republican Presidential nominee John McCain, responding to concern that his campaign manager and longtime political aide/confidante Rick Davis was paid for advocacy work on behalf of the now-wrecked Freddie Mac and Fannie Mae government-sponsored mortgage giants, told the New York Times a few days ago that Davis had no such involvement since 2005 — yet the Times found Freddie Mac had made payments to Davis’ lobbying firm through last month.

The McCain campaign posted a statement to its Web site yesterday attacking the Times’ reporting:

As has been previously reported, Mr. Davis separated from his consulting firm, Davis Manafort, in 2006. As has been previously reported, Mr. Davis has seen no income from Davis Manafort since 2006. Zero. Mr. Davis has received no salary or compensation since 2006. Mr. Davis has received no profit or partner distributions from that firm on any basis — weekly, bi-weekly, monthly, bi-monthly, quarterly, semi-annual or annual — since 2006. Again, zero. Neither has Mr. Davis received any equity in the firm based on profits derived since his financial separation from Davis Manafort in 2006.

Further, and missing from the Times’ reporting, Mr. Davis has never — never — been a lobbyist for either Fannie Mae or Freddie Mac. Mr. Davis has not served as a registered lobbyist since 2005.

Yet Newsweek reports Davis “has remained the treasurer and a corporate director of his lobbying firm this year, despite repeated statements by campaign officials that he had ended his relationship with the firm in 2006, according to corporate records.” Here’s one of those records, the firm’s 2008 annual report to the Virgina State Corporation Commission, listing Davis as an officer and director.

All of which is talking around the main point: These out-of-control mortgage lenders were shelling out paychecks to Davis and/or Davis’ firm for years merely because Davis is McCain’s top adviser. The Times’ sources “said they did not recall Mr. Davis’s doing much substantive work for the company in return for the money, other than speak to a political action committee of high-ranking employees in October 2006 on the approaching midterm Congressional elections. They said Mr. Davis’s firm, Davis & Manafort, had been kept on the payroll because of Mr. Davis’s close ties to Mr. McCain, the Republican presidential nominee, who by 2006 was widely expected to run again for the White House.”

And whether Davis has drawn a paycheck from his firm since 2006 isn’t the point. Does Davis contend he’ll never return to his firm after this campaign is done, a firm enriched in the interim by Freddie Mac? Certainly not. The fact is, the firm Davis helped found, of which he’s still apparently an officer and director, made about $500,000 from the failed mortgage giant based on Davis’ access to McCain and during the same time Davis has been working to put McCain in the White House (and all this after Davis undisputedly made about $2 million working on the mortgage lenders’ behalf from 2000 through 2005).

Having a top aide and/or his firm taking money from troubled mortgage lenders sounds not unlike the sort of “poor judgment” McCain showed in a scandal at the heart of the last big government bailout. And this series of lies to cover it up sounds like anything but “straight talk.”

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McCain confidante fought mortgage regulations

According to the New York Times today, Rick Davis — longtime adviser and campaign manager to Republican presidential nominee John McCain — pulled down somewhere in the vicinity of $1.8 million over several years heading up a group that fought against increased regulation of the now-tanked mortgage giants Fannie Mae and Freddie Mac:

“The value that he brought to the relationship was the closeness to Senator McCain and the possibility that Senator McCain was going to run for president again,” said Robert McCarson, a former spokesman for Fannie Mae, who said that while he worked there from 2000 to 2002, Fannie Mae and Freddie Mac together paid Mr. Davis’s firm $35,000 a month. Mr. Davis “didn’t really do anything,” Mr. McCarson, a Democrat, said.

[snip]

Mr. McCain was never a leading critic or defender of the mortgage giants, although several former executives of the companies said Mr. Davis did draw Mr. McCain to a 2004 awards banquet that the companies’ Homeownership Alliance held in a Senate office building. The organization printed a photograph of Mr. McCain at the event in its 2004 annual report, bolstering its clout and credibility.

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Congressional triumvirate helps avert foreclosures

Alexis has two young children, a husband injured on the job and a mortgage payment her family’s reduced income no longer covers.

“We’re about $1,000 a month short and with the economy the way it’s going, we’re in trouble,” said the Martinez mother who asked that we use only her first name. “I’m hoping I can get our lender to work with us for about six months.’

Alexis was one of several hundred people who attended a day-long mortgage foreclosure prevention workshop today jointly sponsored by three members of Congress, U.S. Reps. Ellen Tauscher, D-Alamo, George Miller, D-Martinez and Jerry McNerney, D-Pleasanton.

Area homeowners met with HUD-certified housing counselors, lenders and community resource organizations. They also heard from experts how to avoid scams and illegal loans, options to foreclosure, tax implications and bankruptcy.

CLICK HERE TO DOWNLOAD A COPY OF THE PACKET HANDED OUT AT THE WORKSHOP. IT INCLUDES RESOURCE PHONE NUMBERS AND INTERNET ADDRESSES, TIPS TO AVOID SCAMS AND MORE.

“You have taken a huge step by coming here today,” said Miller from the podium at the United Association Plumbers and Steamfitters union hall in Concord. “Forget the embarrassment. Many people are in trouble, many of them through no fault of their own. You must reach out to lenders and admit you have a problem. Don’t wait until it’s too late.”

The congressional triumvirate convened the foreclosure prevention forum to help stem the rising foreclosure tide sweeping across the nation and California.

The East Bay has been hit hard as people on the economic edge stretched into risky loans or borrowed on home equity that no longer exists.

As people lose their homes and banks dump the properties on the market at discounted prices, everyone’s home values decline, Tauscher said. That leads to even greater numbers of homeowners whose houses are no longer worth what they paid for them.

Tauscher and her two East Bay colleagues support legislation that would allow banks to voluntarily reduce loans up to 30 percent and negotiate new mortgages with homeowners. Similar versions of the bill passed in the House and the Senate and await the outcome of a conference committee.

To help restore faith in homeownership as an investment and reduce the number of foreclosed homes for sale, the legislation also includes a tax credit for nervous but qualified first-time homebuyers who need a push to persuade them to enter the fragile market.

Are you behind on your house payments? Don’t wait until it’s too late to save your home and your credit. Call and get help or look on-line for assistance:
— HUD housing counselors: 800-569-4287 or www.hud.gov/counseling
— Hope Now, industry alliance: 1-888-995-4673 or www.hopenow.com

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Quips and outtakes from Harry Reid

U.S. Senate Majority Leader Harry Reid was at the Commonwealth Club of California in San Francisco today, and said he, House Speaker Nancy Pelosi and Democratic National Committee Chairman Howard Dean intend to ensure that the race for the Democratic presidential nomination will be over by the end of next week.

Here are some odds and ends for which I didn’t have room in the story:

Asked whether his own “The Good Fight” or former White House Press Secretary Scott McClellan’s “What Happened: Inside the Bush White House and Washington’s Culture of Deception” should be the single must-buy, must-read political memoir of the year, Reid replied he’s donating all proceeds from his book to charity, but “Scott probably needs the money more.”

Asked who’s most to blame for the subprime mortgage loan crisis, Reid said it’s former Federal Reserve Chairman Alan Greenspan, whom he called “the J. Edgar Hoover of the financial world: He did everything he could to get in good with the next president.” Greenspan must’ve known the subprime loans were a disaster in the making, Reid said, and “if he didn’t know, he should’ve known,” as the U.S. Treasury secretaries under the George W. Bush and Bill Clinton administrations should’ve as well.

On gas prices, Reid said the United States doesn’t have the oil reserves to produce its way out of the crisis, nor can it remain so dependent on oil imported from hostile or potentially hostile “tyrannical” regimes. Reid said he favors granting an eight-year tax credit to spur venture capital investment in solar, wind and geothermal energy production; he said he’d like to see the vast tracts of Nevada desert once used to test nuclear weapons be carpeted with solar panels to generate electricity for the nation.

On healthcare, Reid said if we had Hillary Clinton’s healthcare plan — the one she pitched in 1993, while her husband was president — in place today, “there would be very few complaints.” Parts of that plan must be adopted into the next administration’s policy, he said, especially the ability of small business owners to pool their employees together so that they collectively can subscribe to better health-insurance plans.

“Congress should have pretty low (approval) ratings, because we have not produced things,” he said — but he quickly said he’s not willing to take much blame for that. Republicans have filibustered 77 times in this Congress so far, he noted. “They broke a two-year record in 10 months. They’re like Mark McGuire, they’re on steroids. I guess I shouldn’t say Barry Bonds while I’m in San Francisco.”