Reporters covering Sen. Hillary Clinton’s speech on housing in Philadelphia last Monday described one of her proposals as “tort reform.” Here’s the AP intro:
PHILADELPHIA: Democrat Hillary Rodham Clinton proposed several remedies to the nation’s home mortgage problems Monday, including one tool more often associated with Republicans than Democrats.
The New York senator proposed greater protections for lenders from possible lawsuits by investors, a variation of so-called tort reform.
Well, the term didn’t cross her lips, but here’s the passage from the transcript.
The fourth and final part of my plan involves passing new legislation to clarify legal liability for mortgage companies that act to help more borrowers stay in their homes.
Right now, many mortgage companies are reluctant to help families restructure their mortgages because they’re afraid of being sued by the investment banks, the private equity firms, and others who actually own the mortgage papers.
Because, remember, all of these mortgages were bundled up in these huge packages and sold around the world. So you can’t just go down to see your mortgage broker or your bank or your other lender to work out a deal, because they no longer own the paper.
This is the case even though writing down the value of a mortgage is often more profitable than foreclosing, both for mortgage companies and for most of those who own the mortgages.
That’s why I will be proposing legislation, when Congress returns, to provide mortgage companies with protection against the threat of such lawsuits.
And the passage from her campaign’s policy paper on housing:
Clarifying Legal Liability for Mortgage Servicers to Help Unfreeze the Mortgage Market. Many mortgage servicers who want to work with families are deterred out of fear of litigation. Senator Clinton is introducing legislation to provide them with legal protection when they act to help struggling homeowners to modify mortgages.
Looks like tort reform to us. Very good.
And if tort reform is a good and helpful step to strengthen the housing market, then it should also be for health care, right? And the manufacturing of affordable consumer goods.
One would think.
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