Poor Us: The Great Depression 2.0

May 1, 2009

Banks Still Calling Shots; Senate Pulls the Trigger

Irrational Exuberance via bighplotkinartcom-It was called the “Mortgage Cramdown Law” and it was supposed to help mortgage holders–consumers, struggling families, voters– deal with banks and stay in their homes.   It was a big deal.

How big? The chair of the bailout watchdog committee, Elizabeth Warren, quoted by  Reuters on Monday, insisted that “bankruptcy judges must be allowed to reduce home mortgage debt or the Obama administration’s housing rescue efforts could fail in the areas where they are most needed.

“If this were business property, a chapter 11, or a corporate chapter 7 proceeding, there would be no restriction to write down the secured debt to the value of the collateral,” she said. “The law recognizes everywhere the importance, in a financial crisis, of recognizing losses, taking the hit and moving on,” she said.

She said she could only attribute the existence of the exception to the political clout of the mortgage banking industry. If the cramdown proposals fail in Congress, “It means that the banks are still calling the shots.”

So, of course, our elected officials in the U.S. Senate sided with their key constituency on this crucial matter, as reported today by Bloomberg:

“The U.S. Senate rejected a measure that would let bankruptcy judges cut mortgage terms to help borrowers avoid foreclosure, a victory for banks and credit unions that said the legislation would increase loan costs.

The proposed “cram-down” amendment to a housing bill was defeated today in a 51-45 vote, with 12 Democrats among the 51 opponents. The measure needed 60 votes to pass over Republican objections. The House passed its version 234-191 on March 5. via Naked Capitalism

Here are the 12 Democrats who joined the 49  Republicans as bag men for the banksters, may the swine pox befall them all:Democrats voting against the measure were: Sens. Max Baucus (Mont.), Michael Bennet (Colo.), Robert Byrd (W.Va.), Byron Dorgan (N.D.), Tim Johnson (S.D.), Mary Landrieu (La.), Blanche Lincoln (Ark.), Ben Nelson (Neb.), Mark Pryor (Ark.), Jon Tester (Mont.), Tom Carper (Del.) and Specter.

And may the acursed swineflueza stricken these grinning fools, too:

Mortgage Bankers Celebrate Victory

You would think this year’s Mortgage Bankers Association annual meeting would be a rather solemn affair — given the criticism the industry has endured in recent months. But an ANP reporter attending the meeting found the bankers in a celebratory mood. The reason? A massive lobbying campaign against bankruptcy reform legislation known as “cram-down” appeared to be working.

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