Rep. Betty Sutton just introduced a warm-and-fuzzy-sounding piece of legislation. It’s called the Foreclosure Mandatory Mediation Act of 2010:
Rep. Betty Sutton (D-OH13) joined Ohio Reps. Marcia L. Fudge (D-OH11) and Mary Jo Kilroy (D-OH15), as well as Reps. Maxine Waters (D-CA) and Kendrick Meek (D-FL) to introduce H.R. 4635–a measure to combat foreclosures. Ohio has been particularly impacted by the foreclosure crisis and projections indicate no signs of change. In Ohio’s 13th Congressional District alone, 17,555 homes are projected to be foreclosed upon over the next four years. This legislation will require lenders of Federal loans or guarantees to enter into mediation with homeowners prior to placing the property in foreclosure or a sheriff’s sale.
Notwithstanding any other provision of law, before a qualified mortgagee may initiate a foreclosure proceeding or a sheriff sale, the qualified mortgagee shall conduct, consistent with any applicable State or local requirements, a one-time mediation with the affected mortgagor and a housing counseling agency, at the expense of the qualified mortgagee.
For purposes of this section the term ‘housing counseling agency’ means a housing counseling agency certified by the Secretary under section 106(e) of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701x(e)); or a neighborhood housing services program established by the Neighborhood Reinvestment Corporation under section 606 of the Housing and Community Development Amendments of 1978 (42 U.S.C. 8105);
The parties are forced into mediation (even if it’s a slam-dunk case of delinquency by the borrower), and look who foots the entire bill for the mediator’s fees: the lender trying to foreclose on the delinquent borrower. When the government keeps forcing a company to incur new costs, the company must eventually pass on those costs to its customers. Otherwise the company will go bankrupt.
If this law passes, it will end up costing you more to get a mortgage. Care to guess which legislators will then wail and gnash their teeth about “predatory lenders screwing the poor” and “fat cat bankers jacking up fees” when those inevitable effects occur? Now, this is par for the course among politicians who have no clue how a free market works. They think the solution to every government-imposed problem is more government regulation and spending. What’s unusual is that this isn’t the worst part of the bill.
Look at the definition of “housing counseling agency.” That’s a legal term used to obliquely describe groups like ACORN. A Google search of the U.S. Department of Housing and Urban Development’s web site for the terms “housing counseling agency” and “ACORN” yields sixty hits. Most lead to contact information for local offices of ACORN Housing scattered among various states. That’s right; groups like ACORN will be eligible to act as
government-backed bullies impartial mediators in possibly any foreclosure dispute in America. That’s a pretty sweet deal if you’re a crooked agitator impartial mediator and you know that no matter how the rigged show impartial mediation ends, the lender will be paying your bribe fee.
ACORN Housing describes itself as “a non-profit organization that was established to help low-to-moderate-income people become and remain homeowners. But our Housing Counselors are trained and certified by the US dept. of Housing and Urban Development.” Is this just a happy accident? With ACORN’s favorite son in the White House, does anyone doubt that HUD will eagerly encourage ACORN (or whatever it decides to call itself this week) to get in on the foreclosure mediation gravy train?
So why would Betty Sutton try to harm your ability to get a mortgage, and why would she funnel money to groups like ACORN? Could it have something to do with ACORN’s longstanding intimate ties to the Service Employees International Union? Maybe. Both ACORN and Big Labor share hordes of workers and piles of cash for the Democrat Party’s get-out-the-vote efforts and for their own corporate shakedown schemes. If cash from ACORN’s coffers was to find its way to SEIU, where might it go next? Would anyone be surprised if a politician in the back pocket of Big Labor coincidentally wound up with generous campaign contributions from SEIU and friends? What if that politician suddenly needed money and get-out-the-vote help (*cough* surplus voters *cough*) due to a serious general election challenge (not to mention an astonishing primary challenge)? Would that politician have an incentive to start the slush fund tango?