SILVER SPRING – Challenger Donna Edwards blasted Rep. Albert Wynn for signing a bankruptcy bill that she said has dragged Americans into a mortgage foreclosure mess, at a debate among Democratic primary candidates in Silver Spring Thursday night.
Bankruptcy law misconceptions have run rampant, countered Wynn, D-Mitchellville, including Edwards’ claim that linked the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 to the foreclosure crisis.
Edwards and Wynn, candidates for the 4th Congressional District seat, were joined by opponents Jason Jennings, George Mitchell and George McDermott at Montgomery Blair High School for the debate, sponsored by the Greater Silver Spring Democratic Club.
Wynn and Edwards dominated the discussions. The two are locked in a rematch of the 2006 primary, when Wynn narrowly beat Edwards.
Several audience questions submitted to moderator Bruce DePuyt host of News Channel 8’s “News Talk,” centered on Wynn signing the bankruptcy bill.
“I would submit that this bill has been misconstrued . . . it doesn’t have anything to do with mortgage foreclosure,” Wynn said, “They are two completely separate issues.”
But, 70 percent of customers who are at least three months late on their mortgage payments are on top of credit card payments, said Richard Fairbank, chief executive officer of Capital One Financial Corp., according to published accounts of his speech earlier this month in New York.
That may be because the bankruptcy bill made it more difficult for people to qualify to file bankruptcy under Chapter 7, which allows consumers to turn over liquidated assets to creditors, wipe out their remaining debt and get a fresh start.
Instead, more people have to file under Chapter 13, which puts consumers on a debt-repayment plan lasting up to five years. Any remaining debt is then wiped clean.
“There have been some serious arguments that the 2005 amendments may have made the foreclosure issues worse because it made consumers think they had to pay off credit card bill,” said Mark Scarberry, resident scholar at the American Bankruptcy Institute, in a later interview.
“The argument is that instead of blowing off their credit card debt, they’re now blowing off their mortgage payment,” said Scarberry, a professor at Pepperdine University School of Law.
Although the law has no provision for mortgage refinancing assistance for people claiming bankruptcy, Edwards said several civil rights and labor organizations wrote to Congress asking that the legislation include that kind of help.
“(They) pleaded with you to please ensure that consumers and homeowners would be able to renegotiate their mortgages in the context of the bankruptcy court, and you and Republican members of Congress said no,” she said to Wynn.
“So, as a result you’re facing foreclosures due to the sub-prime market and the credit crisis around the country and especially in Prince George’s and in Montgomery County,” Edwards said.
The bill became law in 2005, well before analysts knew a foreclosure crisis would hit the nation in 2007. Wynn is co-sponsoring separate legislation that addresses the foreclosure issue, he said.
“I don’t recall any serious consideration in the course of the 2005 bankruptcy amendment of allowing home mortgages to be modified in the way that the current bills are proposing to do,” Scarberry said. “I don’t think it’s necessarily fair to criticize someone on the basis that they did not include mortgage issues,” in the bill.
Wynn’s voting history came into play again during the debate when an audience member submitted a question asking why he chose to run as a Democrat when he has often sided with Republicans and his “corporate donors.”
“I vote against my contributors when it’s the right thing to do,” Wynn said. “That’s a classic example of what’s been going on in the course of this race, these flying allegations.”
His backing by Democrats, too, is clear, he said, citing the fact that Speaker of the House Nancy Pelosi, came to Silver Spring last week to raise funds for Wynn.
“I don’t really care what Nancy Pelosi wants,” Jennings said. “I think what matters is what the people of this district want. It’s the job of the speaker of the House to raise money for every Democratic candidate.”
Mitchell shared Jennings’ opinion.
“No congressman, Pelosi or anyone else is going to talk against another congressman,” Mitchell said. “What (Wynn) has done over the last 14 years is almost criminal.
“And do you know who I blame? I blame you,” he said. “You’re the ones who voted him in.”