Fight building over judges redoing mortgages

[babylonsister]

Fight building over judges redoing mortgages

By LARRY MARGASAK
Associated Press Writer


WASHINGTON (AP) -- Most congressional Democrats say the quickest way to save homeowners like Troy Butler of Saginaw, Mich., is to let them declare bankruptcy and allow judges to dictate new mortgage terms.

Easy, except the lenders that would absorb the pain - and lose control of any deals to ease the terms - do not want to get dragged into bankruptcy court by millions of overextended borrowers.

Butler, 40, is a laid-off General Motors worker who has filed for bankruptcy. But the bankruptcy court has no authority to change the terms of his $90,000-plus mortgage that is more than double the value of his home.

A bill to give judges authority to alter loan terms for primary residences may be the quickest way to arrest the housing market's collapse. Most Democrats in the House and Senate support that plan. President Barack Obama told Democratic leaders Friday he also backs it, according to a Senate aide who was not authorized to be quoted by name.

But 10 groups representing the lending industry and other businesses are fighting back fiercely. Several have engaged portions of their lobbying machines to stop the legislation. The groups spent $83 million in lobbying on multiple issues in 2008, a figure that shows the power of the banking and investing industry and their business supporters.

more...

http://hosted.ap.org/dynamic/stories/B/BANKRUPTCY_FORECLOSURES?SITE=CONGRA&SECTION=HOME&TEMPLATE=DEFAULT

[mike_c]

1. those are the folks (the bankers) who would happily destroy the country...

...and anything else to protect their profits. Pigs.

[leftstreet]

2. Apparently all the bailout money is making the bankers cocky

x(

[malaise]

4. Watch Bill Moyers journal from Friday

Cocky is correct.

[leftstreet]

8. **The transcript is online for anyone who wants to read it**

Cocky is the word that comes to mind...

snip

BILL MOYERS: Well we'll find out what this means as President Obama confronts one of his first big challenges — the bankers and the bailout.

Usually it's the bandits robbing the banks. But now it's getting hard to tell the bankers from the bandits. Where have they stashed the loot — that 350 billion dollars of our money that the Bush Administration lavished on them to jump-start our failing economy?

For a story in last Sunday's "New York Times", largely overlooked in all the pre-inaugural hoopla, reporter Mike Mcintire reviewed investor presentations and conference calls to see how bankers talk when they think the rest of us aren't listening.

This from Boston Private Wealth Management, a healthy bank that was handed $154 million:

"With that capital in hand <...> we'll be in a position to take advantage of opportunities that present themselves once this recession is sorted out."

Once this recession is sorted out? Those funds are supposed to generate loans for people and small businesses in trouble — not to help banks ride out the recession on a cushion of cash.

Then there's this bit of Simon Legree mustache-twirling from the chairman of Whitney National Bank in New Orleans. They've received 300 million dollars in bailout boodle:

"Make more loans?" he asked. "We're not going to change our business model or our credit policies to accommodate the needs of the public sector as they see it to have us make more loans."

I'm not making this up — Flushing Financial crowed that it was newly flush enough to use the bailout bucks to raise the ante and buy new companies:

"We can get $70 million in capital," their CEO said. "So, I would say the price of poker, so to speak, has gone up." And, so to speak, he's playing with our chips!

http://www.pbs.org/moyers/journal/01232009/transcript4.html

[malaise]

10. We could not believe they actually made those comments

and then hubby said - why not - they're that cocky.

[malaise]

3. The key issue must be the criminal contracts

Usury should be illegal.

[GodlessBiker]

5. So, judges can void union contracts when companies go bankrupt, nut not mortgage...

contracts when people go bankrupt, or so the banks would have it.

[mrreowwr_kittty]

6. The lenders should be absorbing the pain. nt

[Rebellious Republican]

7. I have one simple question for the lenders.....

"Easy, except the lenders that would absorb the pain - and lose control of any deals to ease the terms - do not want to get dragged into bankruptcy court by millions of overextended borrowers."

Why did you lend so much to so many, and so many you knew could not pay you back in the best of times, never mind the worst of times?

Go fuck yourselves, you lured people in and keep the money machine flowing, with out giving any thought to the future!


:argh:

[flvegan]

9. The judges need to be REALLY careful here.

If they alter the terms to the point that the modification of that mortgage is considered a novation, we may see a whole new set of predators. A novation may alter the priority of the mortgage in lien status, and a secondary lienholder or judgment creditor could seek to foreclose their interest, taking title to the property and wiping out the altered mortgage.

Just something to think about.

I do agree that part of any bankruptcy proceeding should include a solid look at the terms of the mortgage. The bank should be represented in the bankruptcy after all.