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Doesn’t exist in the same world where we are going to get our energy from Unicorn crap, and pixie dust. They don’t understand that interest rates or the nothing more than the price of borrowing money, and the more risk you put on the bankers side to loan the money the more the price is going to go up.

If you introduce cramdown and the lenders respond by raising rates and tightening lending standards – which they will need to do if they want to survive as a business – then the Democratic politicians will demonize them as colluding against the people and will use this as an excuse to expropriate their business and nationalize the banking business.

This is the same tactic they are bringing out against oil companies with their taxation proposals as a prelude to expropriation.

And once the government owns all the means of production that our daily lives depend upon, then they will have a permanent majority to complete their creation of a socialist udystopia.

If the borrower files for bankruptcy they are most likely going to lose the house anyway putting yet another unsalable home on the market. So, depending upon the filing 7 or 13, the lender, especially in today’s real estate environment may be willing to take the write down in order to assure continued, although lower, revenue income.

Now, I do not agree with the cramdown policy, however this reinforces the idea that the neighborhood will have a paying homeowner, not an empty house which are crime magnet these days. And since those of use who can pay our bills would prefer to not have crime magnets around us will be forced to accept higher costs (on new credit purchases) in the future.

If we say no to the cramdowns, it is possible that the costs of mortgage capital in the future will be even higher due to the even bigger hit the companies take. That would exacerbate the return to acceptable mortgage rates for a longer period of time.

Unfortunately, I have come to the conclusion that any housing solution will result in penalizing every person trying to get mortgage financing for the foreseeable future.

More are in the planning – this is your chance, Americans who did it by the rules. Plan to participate!

I have no problem with the govt temporarily helping those who bought homes they could afford but were laid off. But NO sympathy for those who bought more than they could afford and used their homes as ATMs. I have yet to see how or that the Obama administration will distinguish between the two (his cheap rhetoric notwithstanding).

This while the Dow is tanking again and our investments/retirements are going further into the toilet. Great “change.”

more than the rest of the mortgage bailout. Yes interest rates may go up as lenders factor in the risk, but maybe the lenders will be a little more careful about who they lend to in the future, and there are definite consequences. Its not just free money for the borrower, its declaring bankruptcy! That will stick with the borrower for many years.

On the other hand, a lot of the refinancing options and incentives being introduced today don’t seem to have any borrower consequences at all as far as I can tell. People really are just getting free money in the form of reduced interest rates that I don’t get access to. Now that p*sses me off.

The balance sheets of banks are based on projected income. That projected income is based on the amount of money loaned out. So, if in the end, only half of the money is going to be paid back, plus interest on that half, instead of the entire thing plus interest, the balance sheet is out of whack.

Bad balance sheets undermine the bank’s bottom line which leads to failure. More bank failures will prolong the recession, not help end it.

So, oh big surprise here, instead of helping the situation, this idea makes it worse.

I also agree with the person who said it is prelude to nationalization. If the banks keep failing, the government keeps buying them “to protect people’s money.”

Off to start stuffing the mattress. It is still legal for individuals to own gold right?

in 2005, that started it; that had a hand in what we have today. When you let the credit card companies, banks and auto lenders draft that bill.

Cram-down has been a part of Chapter 13 on auto loans for a long time. Then you let them come in and (in-artfully) attempt to write that out or restrict it’s use.

And people used to could file 7; get rid of that unsecured debt and still afford to re-affirm on home and auto loans. But you let the banks and credit card companies in and let them write provisions to force those people into 13–so they would still get paid for their unsecured, high-fee, high-interest paper debt. “Oh, those awful deadbeats” was the cry, “skipping out on their bills willy-nilly.” But, the filers are drowning, with only so much income, and you let the credit card companies and banks keep their thumb on them for another 3 to 5 years. You let them come as close as they could to bringing back the debtor prisons. So, the debtors made the rational choice: walked away from their house because that’s the only way to get away from their unsecured debts.

Now you want to stand up for the banks and credit card companies that had a hand in this?

And don’t tell me the banks are losing out–they wrote the loan, they approved the loan, they calculated the interest rate and fees based upon their determination of whether the debtor would default–now that they got all their fees and thousands in interest-first payments, they come crying that their gamble on whether the debtor would pay came up craps? Sorry, no. Your loss is on paper, paper you wrote, paper you made profit off of and now that it is showing a loss you want someone else to pay.

And let me make this political: Those same bankers and lenders that are whining and crying “Please don’t make us pay for our stupidity” are the same ones who just got done donating millions and millions of dollars to Obama, and come 2010 and beyond: They will drop you like a bucket of leaking radioactive waste.

Yeah, I’m probably the minority here, I understand that 98% of people pay their debts in full, I don’t buy the hue and cry that debtors are skipping out on bills left and right so we “gotta do something.”

Let them be, who laid a trap and are caught in their own snare.

bad policy, but it is hard to justify a bankruptcy code that allows it for everything but real property.

The insentive is there for everyone to press to have their mortgage principle reduced to lower price levels so they can make smaller payment…What’s the effect? Property values in their neighborhood will fall even more creating an even bigger incentive for this guy’s neighbors to file for bankruptcy so they pay less which derives down values even more!

THIS IS INSANE PEOPLE!!!

The “Big Tent” analogy isn’t the correct one…the correct one is a MAGNET…we need to be a MAGNET that draws these independents in who are sick and tired of what’s going on in Washington—Fred Thompson

A bankruptcy judge can modify any contract in bankruptcy EXCEPT the mortgage on the primary residence. The BK Judge doesn’t just change the terms – there is evidence provided in a specific hearing for the situation where the mortgage lender can make their case not to modify.

In the run up to the 2005 BARF, we were told that the old law was costing every taxpayer $400. So, now, how much did your interest rates go down after the law changed? Zero.

There will BE NO change in mortgage lending because of the cram down provision other than lenders making sure they are placing loans on properties with stable values (yea, right). There are two parties in a mortgage, when prices go down, the appropriate result is that both parties suffer the consequences. Yes, only the borrower benefits when the prices go up – the mortgage lender COUNTS on it, every day the value goes up, the more secure their mortgage is.

Listening to those that oppose the cramdown you have to wonder if they are paying any attention to consequences. Imagine if housing values behaved just like car values – and loans were priced to take into consideration that result – home prices would collapse…oh yea, THEY ARE.