Mortgage Bill Fails in Senate
Legislation that would have allowed bankruptcy judges to modify mortgages died in the Senate yesterday, handing the Obama administration a significant defeat in its plans to mitigate the foreclosure crisis.
Supporters argued that the measure would have kept 1.7 million borrowers in their homes. It foundered in the face of fierce opposition from the financial industry and Republicans. The legislation, offered as an amendment to a broader housing bill, failed by a vote of 45 to 51.
The measure would have allowed bankruptcy judges to modify troubled mortgages, lowering the interest rate or principal balance through a process known as a cramdown.
Senate Majority Whip Richard J. Durbin (D-Ill.) had negotiated with Bank of America, J.P. Morgan Chase and Wells Fargo for weeks, hoping their support would bridge the gap. However, even after the proposal was weakened significantly, the financial services industry refused to support it.
-- Renae Merle
Consumer Spending Fell in March
Consumer spending dropped 0.2 percent last month, the first decline of the year, according to government data released by the Commerce Department. As spending slowed in March, the savings rate rose to 4.2 percent from 4.0 percent, the data showed. The government also reported that once inflation was factored in, consumers saw little change in their disposable income. Meanwhile, wage growth between December and March, as measured by the Labor Department's Employment Cost Index, grew at its slowest rate since 2001, according to new data.
-- Annys Shin