"The American people did not support ttheir out-and-out robbery.
And thanks to the Senate, who stood with their constituents, the
American people have finally won a small victory against the bailout
barons."-ALG President Bill Wilson.
May 1st, 2009, Fairfax, VA-Americans for Limited Government President Bill Wilson today strongly praised the Senate for voting against H.R. 1106, a bill that would have given bankruptcy judges the power to reduce mortgage principals and rates.
In a statement, Wilson said, "Americans for Limited Government thanks the Senate for voting against the radical fringe of the Democrat party and for rejecting the idea of forcing those who pay their bills to also pay for those who won't."
"H.R. 1106 would have forced responsible U.S. taxpayers and homeowners to compensate delinquent borrowers and irresponsible lenders that took out and made the bad loans in the first place," Wilson added.
The legislation had passed the House of Representatives 234-191, but failed by 15 votes in the Senate when the Democrat Senate majority failed to kill a Republican filibuster. The vote was 45-51, and effectively kills the legislation.
"The American people did not support this out-and-out robbery," he added. "And thanks to the Senate, who stood with their constituents, the American people have finally won a small victory against the bailout barons."
Wilson, in a letter to Congress in February, warned that the legislation would have further weakened and distorted the housing market.
"The Senate's constituents are the ones who would have ultimately paid for these mortgage cram-downs," Wilson said.
"It would have forced banks to eat the costs when the principal owed on the mortgage is reduced, and then the banks facing insolvency would have had to then turn to the government for more bailout funds," Wilson explained.
"The taxpayers then would have wound up paying twice: first to bail out the borrower who couldn't afford their house, and then the bank that was forced by government to make the bad loans in the first place," Wilson added.
Wilson also warned in detail that the bankruptcy courts would have become overwhelmed, "There were about 2.3 million foreclosures in 2008, and fortunately most of the Senate realized that 368 bankruptcy judges could not handle that sort of caseload."
"It would have been an unmitigated disaster," Wilson said.
Wilson believes that most Americans do not support President Obama's plans for mortgages.
"It's very simple: the American people do not want to reward those who made bad decisions in the first place. It is Barack Obama who now stands for paying off those who took out loans they could not afford and wants to continue to force banks to make loans that cannot be paid back," Wilson said.
"Fortunately, Obama's upside-down worldview is starting to unravel," Wilson concluded.