Barack Obama Must Go

Joseph Biden Cashes In on Citizen Home Foreclosures

As initially reported by ABC News on August 28, 2008, Joseph Biden made hundreds of thousands of dollars from MBNA bank for supporting a bankruptcy law which was ultimately responsible for displacing approximately two hundred thousand Americans from their homes.

At least two independent studies have concluded that the housing market foreclosure crisis was significantly intensified by the passing of the 2005 bankruptcy law which Biden championed. The Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) was designed by banks and credit card companies in order to make it more difficult to declare personal bankruptcy and avoid repaying credit card debt. The bill was backed in largest part by MBNA bank, headquartered in Biden's home state of Delaware. Biden has received hundreds of thousands of dollars from MBNA and other credit card companies and Biden's son, a lobbyist, has also been paid hundreds of thousands of dollars by MBNA and other backers of the bill for his 'consulting' services.

Joe Biden foreclosures

According to Travis Plunkett of the Washington D.C.-based advocacy consumer group Consumer Federation, Biden's early, active and vocal support was "essential" to the bill's passage. Biden "went out of his way to undermine criticism of the legislation," and his efforts succeeded in convincing other Democrats to support the bill. "Biden was a fairly strong proponent of that bankruptcy bill," said Philip Corwin, a consultant for the American Bankers Association, which represents banks and lenders. However, Biden was "not in our pocket in any way," he added.

The BAPCPA legislation "is directly responsible for the rising foreclosure rate since the end of 2005," concluded a 2007 study by Credit Suisse. The law "increased foreclosures and the number of homes for sale," was also reported in a July 2008 study by U.S. Treasury researcher David Bernstein. That research study estimated the law had pushed foreclosures or forced sales on 200,000 homeowners since it went into effect.

Since early 2007, the sub-prime mortgage squeeze has pushed many Americans into dire financial straits. Prior to BAPCPA, many citizens could have filed bankruptcy, relieved much of their debt, restructured their mortgages and held onto their homes. However, with Biden's backing and BAPCPAs passing, approximately two hundred thousand (and still growing) distressed Americans were instead forced to sell their homes or default on their mortgages. The flood of foreclosed homes in a depressed economy has exacerbated the economy at large. BAPCPA "increased home foreclosures, increased the dollar value of financial assets in default, and put additional downward price pressure on real estate markets," concluded the Bernstein report.


Joseph "Joe" Biden, Jr.

Barack Obama

Joe Biden is the senior Senator from Delaware. Biden sought the Democratic Presidential nomination in 1988, however, withdrew after getting caught plagiarizing campaign speeches. He currently receives his largest political donations from banking and credit card executives and lobbyists. His son is also a lobbyist which similarly receives hundreds of thousands of dollars from the same sources.

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