3/05/2009

Judges Given Power To Set Interest Rate AND Cost of Home

WASHINGTON (Reuters) -- Bankruptcy judges could cut the mortgage debt of homeowners in bankruptcy court as a last resort to avert foreclosure, under a bill approved by a 234-191 vote Thursday in the U.S. House of Representatives.
Seen by Democratic supporters as vital to stabilizing the crumbling U.S. real estate market, the so-called "cramdown" bill has been opposed by bankers, despite amendments to limit its scope, including one restricting it to existing mortgages.
The Senate was expected to consider its own version of the House bill soon, but chances of passage are uncertain.
The House bill has additional provisions meant to help homeowners in the worst housing market in decades, a slump that has helped pull the U.S. economy into a deepening recession.
Under present law, bankruptcy courts may reduce many forms of debt for struggling borrowers -- including a boat, car, vacation home or family farm -- but not a primary residence.
Changing bankruptcy law to allow this, say bankers and Republican opponents of the bill, would raise costs for everyone by diverting capital from the mortgage debt market.



Why are we allowing judges to decide not only what interest a house should be cut to but also to decide how much of the cost the owner should be responsible for? Pick the right judge and your $230,000 house may now only cost you $15,000 at 3% interest. That is IF YOU DIDN'T PAY YOUR BILLS IN THE FIRST PLACE. Sorry responsible person (read conservative) you are out of luck once again. By the way, make sure to leave your money at the door when you leave. We'll be redistributing that for you now.

11 comments:

Z said...

Pops..people are waking up...not sure what we can do, but even libs are furious...stay tuned. I haven't felt optimistic for months..
something's up...

Ducky's here said...

Good idea, it's about time. Bankruptcy judges deal with contract revisions all the time, that's essentially what a bankruptcy judge's function is.

Stabilization of the foreclosure process is mandatory if we are to enter any recovery and bankruptcy court is the best place to do it. This is the best chance to insure that relief is only given to those likely to retain their homes and not become recidivist.

This limits losses to both banks and homeowners.

Frankly, my hope is that someone like z has to sell her home when there is a foreclosure on the street and she learns that prices quickly drop to the foreclosure level. This process can protect peoples equity.

I don't expect the right wing to understand that but look to the left for guidance.

FJ said...

Time for the ants to pony up for the grasshopper's maintenance and support again.

It won't be long, perhaps a mere few years, before the pretty grasshopper's become a swarm of locusts...

Chuck said...

I agree with Z

I ignore Duck, I just ate breakfast

Good post PF. We could sum it up as saying the poeple that went out and irresponsibly bought a house they couldn't afford therefore causing the largest economic spiral down of our lifetime are now being excused for their transgression by rewarding them with a $400,000 house for $50,000? Did I understand it correctly?

Oops, breakfast just settled. Duck:

Frankly, my hope is that someone like z has to sell her home when there is a foreclosure on the street

This is the summation of what you have to offer. Statements that are full of ill wishes for anyone that disagrees with you and plain ignorance. I would think a more appropriate wish would be that the house values go up and she can make money and therefore help grow the economy. You are such a good representation of retarded left thinking though in that if we can just keep the economy in the toilet than the public will swallow your socialization of the US easier.

Ducky's here said...

Yes Chuck, the right finds reasoning difficult and can only learn the hard way every time.

The object lessons are necessary. It's unfortunate but true.

Ducky's here said...

... and we have a situation which game theory maps very well. We can all guarantee ourselves a positive payout if we co-operate.

Now why isn't the right capable of that cooperation? Because they are envious to start. It really galls them that someone they consider unworthy might benefit even though they also gain with the correct strategy.

They assume that by simply slamming anyone who has a mortgage problem they will clear the system and escape without any detriment to their own equity position.

Of course that isn't going to happen which is why the left is in charge and doing the cooperating for you. The right is so frightened and envious that they are not capable of the reasoning to resolve this situation in the most efficient fashion.

The Hermit said...

Well, I guess if we have 900 million to fork out to the Palestinians, I'd just as soon see some of the tax money stay in the country.

Ducky's here said...

Bush spent a trillion dollars to kill 4200 American soldiers.

Obama is spending a trillion dollars to save 10 million homes from foreclosure.

That might focus things a little better.

Papa Frank said...

Ducky -- not 1 single home has been saved and Obama has dumped 3 trillion compared with the 600 billion that Bush spent to give a country freedom and democracy.

Chuck said...

Duck, I have assumed all along that you could read, was this presumptous of me? I am completely at a loss as to what the connection is between what I said and what your repsonse was.

Z said...

Chuck, Ducky thinks up nasty things to say and it doesn't really matter if it fits a comment or the post. Maybe it's cut/paste from moveon.org, I don't know for sure.
Belittling, demeaning insults are his lock and trade lately.

Don't forget, the BIG OPEN MINDED LIBERAL has to slam anybody with different opinions...!