Today’s post is from Joshua Freedman, a full time mortgage broker. He owns and operates in Pittsburgh, PA and specializes in commercial and residential loans. (By the way, I edit the posts a little bit…)

Over and over politicians have told us that they want to do what they can to mitigate the effects of the Foreclosure Crisis, but I haven’t seen anything other than bailouts and pleas.

has a clause in it that rids the Federal Housing Administration (FHA) qualification that requires brokers to have liquid assets, $60,000 in the bank, to get approved to do FHA loans. It replaces the liquid asset requirement with a $100k surety bond, which is a bond that a third party gaurantees that they will pay up to $100k to the federal government on demand if the broker does not live up to his/her commitments, aka fraud or regulatory fine).

This will allow more brokers to originate FHA loans for borrowers that have sub par credit and anytime you have more loans that translates to more borrowers and less of a seller market. Also keep in mind that, brokers will not be underwriting the files as the lenders will. The subprime crisis will be tapered as it will allow more origination options for homeowners to save their homes and will allow more buyers to buy homes. This is a simple fix to the problem, but it is getting jammed up.

The argument against is that allowing brokers to do FHA loans without liquid assetts and replacing it with the surety bond releases the broker from liability and you will have a bunch of fraudulent loans flying around. This just isn’t true. Every broker is still licensed by his or her respective state and does countless hours of continuing education for every state that they are licensed in. The reality is, most fraud is conducted by employees of brokers and not the broker and you are going to have fraud in any situation where there is lax supervision. A lack of liquidity doesn’t enter into the equation.

Today’s post comes from .

The United States Congress, like the State of South Carolina, has bills pending that address the problem of a paperless electronic voting system. We blogged about the dangers of the lack of a paper trail associated with the electronic voting system used in South Carolina, Trust But Verify

.

The lack of a paper trail has also spurred Congress to action on the issue. There are currently two pieces of Democrat-sponsored legislation still alive and proceeding toward becoming law. (A Republican-sponsored House proposal, , is dead.) The Republican legislation had the beauty of simplicity. The Democrat sponsored legislation is much more detailed and will be costly for states to implement. In addition, the Democrat bill imposes detailed federal requirements on states (unlike South Carolina) even if they already have existing systems for creating an electronic voting paper trail.

Read it all..

This post comes from Martha Sherwood, a legal researcher in a consumer law office. Martha works for a lawyer who blogs at

.

Student loan debt is a huge and growing problem for American families. As Congress rushes to patch the holes in the dike of the collapsing home mortgage industry, student loans have been shoved under the carpet. There is a widespread lack of recognition of the fact that hundreds of thousands of people are already saddled with educational loans they cannot repay, which cannot be discharged in bankruptcy, and thousands more are being added daily. Our congresspeople seem reluctant to pick up the ball. Although has already become law, it provides no relief to the mass of student debtors. (See at BLN.)

Of the three relevant bills currently pending, only one,

(“A bill to Amend Title 11, United States Code, with respect to exceptions to discharge in bankruptcy for certain qualified educations loans”) provides any meaningful relief. Introduced by Senator Richard Durbin (D-Il), this bill removes the paragraph in the 2005 bankruptcy “reform” act which included private educational loans in the non-dischargeability provisions of the code. Senator Durbin’s introductory remarks recapitulate what bankruptcy attorneys are discovering: that this one paragraph, which slipped unnoticed into the act, opened the door to irresponsible lending and predatory debt collection practices. This bill deserves the unqualified support of anyone concerned with just fiscal policy.

, Thomas Petrie’s (R-Wis.) bill, would provide direct government funding for consolidation loans subject to income contingent repayment plans (ICRPs). Under present ICRPs, unpaid interest on guaranteed educational loans accumulates and becomes a public obligation to the lender at the end of the ICRP period. In the long run, this bill would save the government and the taxpayer some money, but it does not help the student borrower.

, is the brainchild of Hilary Clinton (D-NY). This bill purports to address the inadequate truth in lending disclosure requirements on educational loans, and a long litany of loan servicer abuses. If the bill had any teeth in it, it might help curtail mushrooming fees and penalties due to questionable lender practices. Otherwise it’s just an impressive-looking conglomeration of empty platitudes. In the mortgage sector, the government relies on private attorneys to bring action for violations, usually in conjunction with a home sale, and compensates them if the prosecution is successful. Nothing in S. 511 provides a comparable mechanism for sanctioning educational lenders for violating borrower’s “rights”.

Student loan obligations, bloated with unpaid interest and penalties, hover like a raptor over the incomes of working Americans. Every month adds to the growing pool of people trapped in this cage, as college-bound young folk and their parents are lured into signing contracts whose implications they do not understand, recent graduates, working full time, find they cannot pay down the principal, large numbers of people experience personal crises during the long repayment period and find their obligations doubled by penalties and interest, and older workers are downsized or forcibly retired with substantial obligations still in place. Given the magnitude of the problem while the economy is still considered to be healthy, the prospects should a real recession occur are frightening to contemplate.

Thanks for the report, Martha!

The following submission by Mary Lou Diehl was originally posted on the website . Thanks for the submission, Mary!

This bill was introduced into Congress on January 17, 2008, by Representative Rush Holt of New Jersey.

HR 5036 provides reimbursements which can help states, counties and other jurisdictions to  improve some of the problems that have emerged from the Help America Vote Act of 2002 (HAVA). The bill emphasizes paper ballots and audits. All the improvements are to be in place for the November 2008 election.
The bill does not have mandates. Its four areas of reimbursement are optional. No state or other jurisdiction is required to participate.
Its first two offers of reimbursement are in Section 2 of the bill.  Both offers are available only to “certain jurisdictions”: namely, states or other jurisdictions which in 2006 had voting machines which did not use  paper ballots, or did not even produce a paper record that could be verified  by the voter.
OPTION NUMBER ONE: If one of these “certain jurisdictions” obtains  precinct-based equipment that tabulates paper ballots or scans paper  ballots, the costs will be reimbursed.

(The bill frequently uses the word “ballot” in two ways– to refer to a  real, voter-marked, paper ballot, and also to the paper trail inside an  electronic voting machine, which voters may view (through a plastic cover)  to verify that the machine has understood their intentions.

However the bill is clear in stating that replacement equipment which it  will pay for must be “a voting system that uses a paper ballot marked by the voter by hand or a paper ballot marked by the voter with the assistance of a non-tabulating ballot marking device…..accessible for individuals with disabilities…”)

OPTION NUMBER TWO, also in Section 2 of the bill, is intended for jurisdictions which continue to use Direct Recording Electronic voting  machines (DRE’s) that lack any paper trail. The bill offers reimbursement of  costs “to obtain, deploy, and tabulate emergency paper ballots….that may  be used in the event of the failure of a direct recording electronic voting system in the regularly scheduled general elections for federal office to be held in November 2008.” These emergency paper ballots must be counted as regular ballots. (The bill does NOT require that paper ballots be available to all voters on request, and it does not describe what constitutes a “failure” of the DRE.)

Five hundred million dollars ($500,000,000) is authorized for payments under  Section 2. (Wisconsin jurisdictions will not qualify to apply for any of the Section 2 money, because we already have some form of paper involved in our elections.

The third and fourth options for reimbursement in HR 5036 appear to be available to any state, county, or equivalent location which would choose to apply, including Wisconsin.
Reimbursement OPTION NUMBER THREE is in Section 3 of HR 5036. This offers reimbursement for the costs of manual audits of any of the regularly scheduled general elections for Federal office in November 2008.      Reimbursement may also include costs for audits of other elections, referenda, or initiatives that are held at the same time.
The bill spells out one format for conducting an audit, and also offers the choice of using an alternative sampling mechanism which would be at least as statistically effective. Plans for an alternative mechanism must be submitted to and approved by the Director of the National Institute of Standards and Technology (NIST) prior to the election.

One hundred million dollars ($100,000,000) is authorized for reimbursement  of audits under Section 3.

OPTION NUMBER FOUR, in Section 4 of HR 5036, offers to reimburse states, counties, or equivalent locations for the costs of conducting hand counts of votes cast on paper ballots for Federal office in November 2008. In this part of the bill, “paper” includes both real paper ballots marked by voters  and also paper printouts produced by Voter Verified Paper Audit Trail (VVPAT) equipment attached to DRE’s.
Procedures for the hand count, including public observation, are spelled out  in the bill.

It is not clear whether rural portions of a county which already do hand counting, or choose to do so in November 2008, can apply for the reimbursement, or whether the entire county must use that method.

Thirty million dollars ($30,000,000) is authorized for payments of hand counting costs under Section 4.

Section 5 of the bill authorizes study, testing, and development of products  to ensure accessibility of paper ballot verification for individuals with disabilities, voters whose primary language is not English, and voters with difficulties in literacy. The Director of the     National Institute of Standards and Technology (NIST) is to report to Congress by June 30, 2009, on the results of the study.
Three million dollars ($3,000,000) is authorized for this study.

Throughout the bill, the Administrator of General Services is given authority. In a couple of places, determination of whether costs are reasonable “shall be made by the Administrator in consultation with the Election Assistance Commission.”