Call With Hillary Clinton: Discussing HOLC And The Campaign

Bumped from yesterday afternoon. See also Taylor Marah - BTD.

Like Josh Orton, I was on a call with Hillary Clinton late this afternoon. I asked Hillary 2 questions - one was the announced topic of the call (the campaign) - I asked her about down ticket races (she has been all over the country camapigning (or will be going) for various candidates - Lunsford (KY), Shaheen (NH), Noriega (TX) and a host of others.) But then I asked her about the new HOLC, the proposal Senator Clinton has made regarding the creation of a new federal entity to help struggling homeowners keep their homes. I was not sure Senator Clinton would want to discuss it at this time - after all we are less than 3 weeks from an election and Senator Obama has not exactly embraced the idea while Senator McCain at least mouthed the words last night. [More...]

In a pleasant surprise to me, Senator Clinton embraced the subject, reassuring that she was still strongly in favor of the proposal (while making the point that McCain's HOLC bears little resemblance to her own proposal) and has developed legislation for it (obviously no one is in Washington right now so this is a proposal for after the election or for next January.)

Senator Clinton discussed her thinking on the subject in depth and promised to have her staff send me the proposed legislation. As soon as I get it, I will be writng about it. It's good to see that I am not the only one with HOLC on the brain.

By Big Tent Democrat, speaking for me only

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    Hillary did Bruce Lunsford a world of good (5.00 / 3) (#1)
    by andgarden on Thu Oct 16, 2008 at 07:24:53 PM EST
    when she campaigned with him a couple of weeks ago. I believe she is almost single-handedly responsible for making that a close race. Chuck Schumer's idea, perhaps?

    Meanwhile, on HOLC. . . Jeez, that needs a new name. The current acronym makes me think of Ted Stevens and his Hulk tie.  

    Home Owner's Mortgage Enterprise (HOME) (5.00 / 2) (#7)
    by jerry on Thu Oct 16, 2008 at 08:33:41 PM EST
    is Nouriel Roubini's name for it.

    But it comes with some catches that make it very very different from McCain's of course, and even most likely different from Clinton's.


    Doesn't Hillary use HOME now? n/t (none / 0) (#18)
    by jawbone on Fri Oct 17, 2008 at 11:55:23 AM EST
    HOLC SMASH! (none / 0) (#5)
    by dws3665 on Thu Oct 16, 2008 at 08:21:08 PM EST
    It could work.

    A wonky multitasker (5.00 / 1) (#2)
    by nycstray on Thu Oct 16, 2008 at 07:24:55 PM EST
    She also seems to be keeping up with the food safety issues (my issue) and has proposed legislation to get dairy included on COOL and closeup some of the loopholes.

    Look forward to seeing your comments on her proposed HOLC legislation. Hopefully it will be sooner than later that they get to it in the senate.

    Do you have any thoughts about (5.00 / 1) (#9)
    by gyrfalcon on Thu Oct 16, 2008 at 09:21:17 PM EST
    how a proposed tracing system can be kept from essentially destroying the locally grown, primarily small farmer food programs that are just now getting a big push as a result of high food costs?

    Are there exemptions built in for small producers and/or for produce, dairy, meats, etc., sold within a certain radius of where they're produced?

    Supermarket chains are finally beginning to get serious about building supplier relationships between individual stores and local farmers, which is a hugely good thing for all of us.  But pretty much all of these small farmers live on a razor-thin margin financially, and requiring them to label every piece of produce and the like would put them out of business-- unnecessarily because as a group, they have an incredibly good record on food safety.


    Well, since many are selling direct single (5.00 / 1) (#12)
    by nycstray on Thu Oct 16, 2008 at 10:46:44 PM EST
    ingredient items, it's not that hard. I noticed a PA mushroom farm has already started with an additional "Product of the USA" on their package. It was the same type of sticker label that the stores use for pricing. It was great as the type on those is big enough to read at a glance. Most should be tracking where their food is already going. I would imagine there will be money available to help the small farmers upgrade etc. Also, with the big producers working out solutions, it saves the small farmer time and money. You know they want to do it on the cheap. I know the cattlemen are looking at a type of electronic tag system where the tag gets attached at birth. Kinda like a micro chip or easy pass. they would require some sort of electronic thingy on gates etc, but they sounded close to a solution.

    I think in the end, the growers associations are finding it easier to have tracking systems in place. (the processors are another story) If you noticed during the tomato mess this past spring, many states could be declared safe because they had trackback systems in place (CA comes to mind). Their crops could still bring in money. Can't remember which state it was, but they solved the problem, not the FDA.

    My farmers sell direct to restaurants, farm stands, CSAs and a few select retailers here in Brooklyn and up by their farms. It saves them a ton on packaging etc, so if they had to start labeling origin, they could do it pretty cheap. Simple black and white stickers don't cost much bought bulk. The legislation Hillary and Russ just put forward on the dairy was also framed as a way for people to support their local resources. She's big on the small farms. If my farmer is there Sat, I'll ask him how it effects our group of farmers. I also don't see why a store who buys from local farmers can't just use signs and those price gun labels. The fish market in my local store identifies their fish that way if it's not packaged. And I'm sure they have a computerized system that says where they got everything.

    I think there is also a myth out there that this is extremely costly etc. That came from the big producers/processors who have faux outrage down pat. That whole thing about a candy label being a mile long was pure BS. And they have enough time built-in to change their packaging (using up the old) and generally putting in country ID can be done easily and not as expensive as they claim. I've changed enough packaging to know this, lol!~ Small farmers can also raise their price a few pennies, because it could literally come down to that. I haven't checked label pricing lately, but the more you buy, the cheaper it is. I think in the long run, small farms may win. USA grown and produced is going to be more popular than ever soon. China has effectively contaminated the global food chain along with some of the multi national corps.

    Hopefully CSAs will grow. My main farmer had to talk the orchard into to doing it. What happens is, they get the money upfront for a portion of their crops so they can afford a bit more until they are in full harvest and can sell to the other places. They plan how many shares they want to sell and can be guaranteed that money. Then the rest of their crops are sold throughout the season. I think that was one reason the poultry farmers could start up. My CSA has gone from one location to 3 (in 5 yrs, my location is over 100 shares), and 2 other growers have signed on . I missed the mtg last Sunday, but it was about what we would offer next year, growth wise, from the farmers.


    Nycstray.. (none / 0) (#15)
    by vml68 on Fri Oct 17, 2008 at 10:26:42 AM EST
    Have a question for you on the open thread.

    Here in California, Lucky Stores which was (none / 0) (#24)
    by hairspray on Fri Oct 17, 2008 at 06:15:24 PM EST
    largely bought out by Albertsons about 12 years ago, has resurfaced since Albertsons went out of business recently.  They are now promoting the idea that they are buying locally and forming relationships with local farmers.  It may be self preservation in terms of costs, but who cares if it gets the ball rolling?

    Good job, Big Tent! (5.00 / 9) (#3)
    by oldpro on Thu Oct 16, 2008 at 07:44:31 PM EST

    Seeing the legislation (5.00 / 1) (#4)
    by Maryb2004 on Thu Oct 16, 2008 at 07:44:59 PM EST
    would be useful. I've been waiting to see how complicated it has to be to works around the securitization issues.

    good for you (5.00 / 6) (#6)
    by coigue on Thu Oct 16, 2008 at 08:24:57 PM EST
    good for her

    good for us.

    Thanks BTD (5.00 / 3) (#8)
    by progressiveinvolvement on Thu Oct 16, 2008 at 09:05:55 PM EST
    Please post when you receive info.  I know you will.

    First class (5.00 / 4) (#10)
    by cal1942 on Thu Oct 16, 2008 at 09:26:15 PM EST

    thanks BTD (5.00 / 3) (#11)
    by ruffian on Thu Oct 16, 2008 at 09:26:55 PM EST
    Glad she is openly enthusiastic about it, and now she knows blogs are talking about it, if she didn't already know that.

    Great (5.00 / 2) (#16)
    by lilburro on Fri Oct 17, 2008 at 11:12:50 AM EST
    Shakesville on the call

    Melissa McEwan covered the call too and has some more quotes ...her focus is on women's health though.

    I look forward to reading more on this issue from you BTD.

    Hey BTD, can we have an open thread please? (none / 0) (#13)
    by andgarden on Fri Oct 17, 2008 at 10:08:13 AM EST

    The problem with HOLC (none / 0) (#14)
    by Don in Seattle on Fri Oct 17, 2008 at 10:15:56 AM EST
    is that it is geared to a 1930s world, where it is possible to identify the owner of a particular mortgage.

    Once mortgages get bundled and carved up into CMO's, they are nearly impossible to put back together again. Any given mortgage, as I understand it, could be chopped up into as many pieces as there are payments to be made.

    The process of bundling and re-slicing CMOs by credit rating, or some other characteristic, makes the exercise of identifying the owner of a particular mortgage nearly impossible.

    It's like trying to determining exactly which cows went into your hamburger; or worse yet, trying to un-grind the hamburger back into living, breathing cattle.

    Maybe Hillary has addressed this problem, but if she has, I am not aware of it.

    While the derivatives sales make current holder (none / 0) (#19)
    by jawbone on Fri Oct 17, 2008 at 11:58:31 AM EST
    of the mortgage more difficult to trace, obviously it can be done since houses are actually still being bought and sold. Which requires a title search and pinning down how the existing mortgage is paid off.


    Not as easy, but seems to be done.

    And, it makes a great jobs program!


    I'm not an expert in this, but certainly (none / 0) (#20)
    by Don in Seattle on Fri Oct 17, 2008 at 03:26:05 PM EST
    mechanisms exist for "normal" mortgage-related business to occur. Mortgage payments are made, and the labyrinthine computer-driven system is able to sort out who gets paid. A mortgage can be paid off early, in case the home is sold or refinanced; or a mortgage can go into default.

    The trouble seems to be that the system breaks down when it becomes desirable to negotiate "special" treatment for a mortgage in trouble. In order to renegotiate the mortgage, someone has to speak for the mortgage holder. When the mortgage has been split up among various noteholders, often it isn't clear who that should be.

    The result is a kind of stalemate.


    My belief (none / 0) (#21)
    by Steve M on Fri Oct 17, 2008 at 04:45:31 PM EST
    is that even though the problem you identify is a real one, the government has the power to solve it through legislation, in much the same way as Alexander solved the Gordian Knot.  In other words, the government can say "look, we realize no one knows who owns this loan, but we're going to renegotiate it on their behalf anyway."

    That would be interesting, especially if the (none / 0) (#23)
    by Don in Seattle on Fri Oct 17, 2008 at 06:09:11 PM EST
    government were buying the mortgage at some reduced rate.

    And not interesting in the good way. If, as you say, the government were to be the buyer AND negotiate on behalf of the seller, the conflict of interest would be pretty glaring.


    Appreciate the above input. However, if the (none / 0) (#25)
    by jawbone on Fri Oct 17, 2008 at 09:18:56 PM EST
    mortgage redo is being done to assist the homewowner and without it many of the homeowners would default, whoever hold the slices or atoms of those mortgages would have been financially hurt anyway, right?

    I guess the government can treat this sort of like eminent domain--to prevent more damage to the general society. All guessing and I am an econ dummie.


    instruments for each payment. But many mortgages are bundled together, and then (I guess to make them seem more "bond-like") they are chopped into tranches based mostly on term. That each payment would end up in a different CMO is I think a reasonable theoretical limit.