Well, because if they start adjusting the value of a particular loan, they have to start reducing the value of all similar loans on their books, whether they’re in trouble or not

Which reduces the value of their stock options. Oh noes.

Good work, Jane. This is pretty distressing.

What leapt out of the quote by Rick Sharga to me was “A desire to postpone…”
Yup. Once again, a refusal to face reality thats going to put us all deeper into trouble. Just like they refused to face the fact that there was a housing bubble to begin with.

I wish I thought I could get through to my elected reps, but we all know nothing any mere individual constituent says or does will change their support for banks (Texas – Rep. Lamar Smith, Cornyn, Hutchison)

I’m curious… what’s to prevent Congress from passing a law that allows and funds the municipalities to extend the power of regulatory taking (also-called eminent domain) to seize from the banks foreclosed homes (or properties occupied by renters, at risk of foreclosure or just the mortgage obligations and associated title documents) and then turn these homes over to their occupants? — effectively voiding the banks’ role in the foreclosure process. The cities can basically then declare a moratorium on financial obligations of the occupants and landlords of those properties, preventing any real consequence to occupants of the foreclosure crisis – effectively nationalizing the banks’ assets where those assets are stakes in foreclosible properties (seizing the mortgage obligations instead of the banks themselves)? Really, the banks are suffering from paralysis.. they don’t want to give up their rights under the mortgages, yet they don’t have a solution. So let’s take it out of their hands.

So, even if you are not from the states these new dems represent, tell them you are considering a switch to republican if they don’t change their stance. I have thought about this alot, and though I am a life long democratic, I am getting really tired of not knowing if my representative is going to back me up, or cave in to the repubs demands (or bank demands in this case). That would let “new democrats” know, that there chances of being in the majority are in question, and thus is a potential threat to their “power”. My personal reasoning is that at least with the repubs, I know where I stand, and can plan accordingly. With the dems, it is becoming a big question mark. Of note, I live in Oregon, and my house and senate representatives are very democratic in their voting manners, so I am lucky in that respect.

I am really sadden to have to use this kind of ploy, but as it stands, our voice seems to carry little weight, and I don’t know of any other way to approach it. Better ideas are out there, I know and I welcome those. But until they are presented, I am considering going with this.

Respectfully to all the progressives that want a voice in our policies, Angry B.

It’s all part of the macabre dance to avoid accountability by the banks and ensure the currently privileged remain so. So the assets are marked down and now these banks- and it MUST be told that ‘community banks’ are NOT in such a position as the ‘large’ lending institutions- become ‘insolvent’. what happens? They are taken over by ‘private equity investors’ because banking IS very profitable. EVEN with new regulations to prevent ’speculation’.
And now Sheila Bair says the FDIC insurance could be insolvent this year BUT “For risk-based assessments, our statute restricts us from discriminating against an institution because of size,’’ Bair wrote.”
Like Statutes can’t be re-written, uh, right.

I understand the New Dems and their PR flaks are saying that this happened because they are working on behalf of the leeettle people, to help them avoid the tragedy of bankruptcy. I’m just not sure how they’re doing it with a straight face.

Maybe we should get a standard lie detector system and hook it up to all the press flaks spouting this gibberish.

We will be looking to see how their constituents feel after an education campaign letting them know what happened on these issues, and how their representative responded. That should tell us whether they are truly acting on behalf of their districts, or just using it as a shield to give lobbyists what they want.

You know when the banksters are going to stop stealing the citizen’s money?

NEVER.

Why would they?

Who would stop them?

A desire to postpone this devastating situation helps explain lenders’ intransigence, says Rick Sharga.

I suppose it wouldn’t be an issue if the banks were federalized now would it Rick?

Fuck these people and make them stop fucking us.

“tell them you are considering a switch to republican if they don’t change their stance.” —your’re stil under the perception that there is a difference when it comes to the ‘privileged’; believe me, there isn’t.
Ask yourself this question: “Why are there the same number of Representatives now as in 1945 despite the population being 3 times larger than in 1945?”

And then ask Obama why he doesn’t direct the House to increase it’s representation since the Supreme Court has ruled he has such a power?

When ARE they going to get it? When 90% of the people in this country are homeless?
It blew me away last week listening to Bernie Sanders on Hartmann not knowing that 1 in 10 homes in the US are foreclosed. Thom had to get the stats and show him. And Sanders is one of the best up there.

Check this out, it may not be far from the reality:
Igor Panarin: U.S. Will Collapse By Next Year

These Banksters are sort of one-sided aren’t they? Now they are concerned with “accounting nuances” but when generating the “Big Shitpile” they applied quadratic equation economic principles, presumably to confuse everyone while they got rich.

New American Motto:

“Where are we going, and why am I in this handbasket?”

Bankruptcy cramdowns don’t solve the problem since you have to file bankruptcy. That’s expensive, a throwing of good money after bad by people who can least afford it. It would be better to give all foreclosure (state) judges cramdown powers especially when they find predatory lending is involved. As for cities they have financial problems of their own, not the least of which is diminished tax revenues because foreclosing banks don’t pay real estate taxes.

The problem is much larger, but it may be some time before people see it, or maybe I will eventually learn the problem was so large at all. We base our behavior on expectations and it takes a while, usually quite a while, before we realize our expectations won’t happen. I doubt Democrats, new or old, will do much, if anything, to fix the problem. If that’s the case, what then?

I really don’t see the difference between having a cramdown happen and what happens when a foreclosure occurs. What should be determining the value of their portfolio is appraisals. Mark to market

i put this in epu-land a few threads back:

the problem is that this legislation should have been done last fall as part of the TARP bill. now it’s probably too late for it to have the needed effect and we are going to have to move more quickly with more comprehensive policy.

for a while hugh has been advocating across the board cramdowns and now roubini agrees: “policy response needs to include” among other things “Across the board reduction of the face/principal value of mortgage debt and other consumer debt for insolvent households as a case-by-case debt re-stretching of debt will not work;”

my bold.

too little too late isn’t good enough.

damn. epu’ed again.

“Cramdown” has such a negative connotation. Shouldn’t it be renamed to “Bankster fines?”

I used to live in CA-10, so I’ve called Tauscher’s office many times. Her staffers lie about shit all the time. I remember it was especially bad on the telecom immunity thing, which she voted for too.

I’ll drive back over there every weekend to volunteer for anyone with a the guts to primary her.

Running adds now would be a good way of setting things up for an Accountability Now-backed primary later. Anything in the pipe?

Cram-downs are an essential part of the banking and housing crisis. They apply in bankruptcy, of course. Just as importantly, they are the floor, the walk-away position for both homeowners and banks. Only the availability of that remedy that brings reasonableness to the pre-bankruptcy workout.

The friendly banker who works on Main Street, lives down the road and would reasonably renegotiate a debt to get as much as possible but no more is as fictional as Mickey Mouse.

It may well be too late. The best we could do in the situation was make it so painful for them to act on behalf of the banks (which everyone knew they were doing, they were bragging openly about it, it’s absurd to claim otherwise) that it won’t be so easy for bank lobbyists to control future legislation. The New Dems backed WAY off from where they were last week and are now trying to pretend it was ever so, but I think most people are a too savvy to buy that. And they’ll remember when it happens again.

Hey Jane and Puppies.

Just barely not OT….

I guess we can be a little test case, since we’re gonna try to move late this spring. Our property is owned free & clear by us, so that’s a clean start on the project. But whether we can find someone who’s able to buy, I haven’t a clue.

Of course we personally think the property is perfect. We’ve loved living here for 35+ years, comfy well-built house, conservation easement ensuring peace and quiet surrounding the house and grounds without affecting full ownership rights, beautiful woods teeming with wild birds year round, plenty of room and good garden space already prepped for a victory garden, organic growing routine has been standard for all this time, so there are no hidden nasties on the property; wildlife-friendly landscaping brings in butterflies all summer, and feeds the birds in winter. But, will the banks and bailouts work so someone can buy? The house is roomy and bright, but simply built on purpose, with Andersen windows, extra insulation, whole-house attic fan, AC, full basement, screened porch, beautiful big trees plus plenty yard space for play and gardening, and a built-in super-friendly bluebird family nesting every year just 20 feet from the house. Nice nice place. Northeastern OH, within easy commuting distance of Akron, Cleveland; excellent shopping and entertainment a stone’s throw away; peace and quiet at home, if you don’t mind Baltimore Orioles and Rose-breasted Grosbeaks, Carolina Wrens, Indigo Buntings, Goldfinches and Hooded Warblers, etc. etc. singing to you all summer, and Chickadees as buddies all year.

So there it is. Messers Bankers, please don’t make me come down there and read you our rights in person.

oh, i completely support what you are doing (am making phone calls now) and understand that there are mobilizing, educating and applying pressure to congress issues that can and must be worked now. i’m on board 110%.

just wanted to interject a bit of policy discussion… i suppose it’s just trying to help move the idea of across the board cramdowns from the sphere of deviance (where i live) to the sphere of legitimate debate (where you have at least one foot).

just found this on “The Google”
Treasury launches program to prevent foreclosure

Could O be making an end run around the New Dems?

No, look at the effective date; such is ONLY for mortgages initiated AFTER Jan.1,2009.

http://www.philly.com/philly/o…..crash.html

If people rob banks, they go to jail. If bankers rob people, they should go to jail too.

New Dem Linda Sanchez on the teevee (msnbc) saying the presiden(cy) already has enough power…given him enough money. sounds really GOP.

This is incredible work, thanks to you so much.
There is just one problem, it is all moot. It will be again tomorrow, and then next week due to the collapse of the various institutions affected by the vast scheme to loot the treasury’s of the world. There simply isn’t enough “pretend” capital to resurrect the dinosaurs that can’t walk carrying their own weight. That is a major issue that we can’t predict due to our normally solid bedrock behaving like lava.
We are ignoring that there is no money being loaned to the people that need it. The banks are insolvent, but for those very few that would not purchase worthless paper “instruments” that put them at risk. The national bank of Lebanon for example. But there are few in our country that did not buy into the get rich quick scheme our former governments catered to, and accepted bribes from.
There is no foundation for making a deal at this time. We will see the end of the GOP in the coming months as their own members work to take out their leaders. We are seeing it on a small scale today with the entertainment wars. Wait until it becomes warfare as the mayors and governors call for the representatives and senators to be recalled due to their attempting to deprive their own constituents of even the basics for survival.

There are no predictions from real economists that suggest an end to what is happening. Only those making a buck like the CNBCs and Forbes are suggesting you continue to pour your life into their particular golden shithole because they will say nice things about you as they fleece you. It is noteworthy that NO ONE, will talk about what happens in even a year, based on what is happening today. That should be enough to show each and every one of us that our government, the news, the banks, the traders and the others, have no idea of what they are doing, and never did. They banked on fiction, and they are now trading in it.

comment to Kassandra @ 25: Authority for this program comes from the TARP Bill, i.e., the Emergency Economic Stabilization Act of 2008. Congress required that Treasury do this, so it was no run-around. They didn’t act fast enought, and Congress began introducing additional bills mandating that they adopt this program, or one like it, modeled on the FDIC program used at IndyMac. two weeks ago, President Obama gave Treasury 2 weeks to get their act together. so today it announced the program.

comment to ubetchaiam @ 26. Please take another look at the effective date. It affects only mortgages made BEFORE 1/1/2009. http://www.treasury.gov/press/…..ummary.pdf

finally, the motivation for not doing principal reductions first is that principle reductions incur the wrath of the investors who have securitized these loans. The loan servicers (usually not banks) who make the decisions about whether to modify are contractually obligated to do everythign short of principle reduction first. But it’s not ruled out. It is merely the last permissible thing under the pre-existing securitization contracts. These are state law creations, and so executive action (i.e., the treasury program) cannot abrograte those contracts. This is why, if you look at the treasury guidelines, you’ll see a discussion of the NPV comparison – the loan servicer has to show that the loan under modification (including principal write-downs, if necessary) is worth more than the loan if foreclosed. this satisfies the requirements of the securitization contracts and keeps the investors off the backs of the servicers.

It’s not about the banks. most of these mortgages are not held by banks at all. Writing down the principle would not affect the health of the banks much, and much less than actual foreclosure, in most cases.

As for cramdowns, we need ‘em. Dems DO seem to be willing to gut the bill that’s currently before them. Write to your congress critters because this will help those already too far gone for loan modification.

“…I’m just not sure how they’re doing it with a straight face…”

A combination of botox and the Stanislavski system, presumably.

Mark to market would be the correct approach. What they’re trying to avoid is having to apply those rules to the entire portfolio. What hasn’t gone sideways (yet) can be ignored in that sense, thus allowing them to ride the bullshit wave just a little bit longer.

Whatever happened to being proactive? Idiots.

epu’d, but-
Adie – Why are you leaving Paradise?

And if you can’t sell it, can I come live there and pay you rent?
(Of course, I probably couldn’t get a job in the area to have the rent money for you.)
But seriously, it sounds absolutely lovely.
And, actually, I thought Baltimore Orioles were extinct, or nearly so. I seem to remember reading in Baltimore (mother lives there) that none have been seen in a very long time.

Oh well, I hope you find a buyer who can get the loan and who will appreciate what you have made for him/her/them.

I respect the fact that the “New Dems backed WAY off from where they were last week”. However, I am disinclined to accept the notion that the bank lobbyists (and the industry they represent) won’t try it again. These people are incredibly greedy and without shame. Further, they are assuming that the electorate won’t remember what happened previously and that it will thus be easy for them to slide another one under the radar. And with the help of an importunate, spineless and self-serving MSM, they just might be right about that.

I apologize if I sound cynical, and I sincerely hope you’re right and I’m wrong.

If you interpreted my comments to mean I thought they’d back off, I didn’t mean to imply that. I just meant we had to try to make them pay a price.

Thanks for your question. It’s a good one for us to keep in mind.

A couple of extra things about our home: it’s in one of the best public school systems in the state, yet the conservation easement keeps the property taxes lower than they otherwise would be.

Okay. THE big reason to move:

-um-, we’re getting old(!) Relatively speaking, heh. I have 2 (decade-old) titanium knees that work perfectly, my honey has one so new, he’s just beginning to have some fun in life again, but then there’s a pesky hip that might flare up.

Both of our sets of parents insisted on staying in their homes too too long, at least, the way it worked out. They essentially were “trapped” in them and very very lonely, but became more and more miserable and withdrawn. Plans they had made to move to a smaller place with care available were forgotten, and their last years were bittersweet for all of us. My own knees were failing, so I was not able to lift my mom around, and do all the errands she wanted me to. All it came down to was being able to love her and hope she understood. She grew resentful of all outside caregivers, resentful of our attempts to take her out for interesting outings with the family, etc. Eventually she refused to be social with others at all. It was terribly sad. We don’t want to follow that path and worry our own children.

We want to move to a smaller place with fewer chores, more interactions with others, health care and transportation options “built in” to the system for when we inevitably will need them. Oberlin is our destination: a little oasis with a distinct tilt to the LEFT, in the middle of OH, with a world class college that just happens to welcome seniors to audit courses for free, offers free recitals to the whole community year ’round… The community spirit is very active and lively as well as liberal and welcoming. We’re very fortunate to have this opportunity.
(no, there’s no golf course, but there are nature trails, wetlands, nesting tree swallows and bluebirds… and endangered Indiana free-tailed bats. it’s not a Seinfeld-esque Del Boca Vista, thank dog!)

We will miss our home, the place we raised our children, the only house we ever owned, the place we milked the goats and bottle-fed their babies; where we raised our own chickens for meat and eggs, grew and ‘put by’ most of our own food; where we sat in a circle on the garage floor shucking popcorn together; where our children showed their goats in the county fair and played sports, and also grew up to be a deeply respected classical music pro and a computer whiz who can make mind-bendingly complicated electronics almost human. Did I mention, we’re best friends with our kids and many of their friends?

The memories and pictures are enough. We want to move while we can still move, ahem, because there are other things out there to see and do, and it’s time for someone else to enjoy their own version of what we did at this wonderful spot on the surface of our one fragile planet.

does that make sense? it does to us, anyway. ;->

Thanks. I’m with you on that. Embarrass them in the current political environment and sting them badly in the next election.

A loan modification is also beneficial to the lender, especially with foreclosure rates skyrocketing. Not only does it cost the lender a lot of money to go through with a foreclosure, it often results in an overall loss. Why? Because the home often sells for less than it is worth, or less then the outstanding loan amount itself. To get more information in regards to a loan modification visit consumerhopecenter.com

Something else that progressives should point out to “New Democrats” is that they got their banks’ bite of the taxpayer apple via the Obama Plan. If the plan is pragmatic for homeowners to use, they will resort to it rather than dive into the pit of bankruptcy. News reports suggest it may benefit up to four million home owners. It does that, in part by using taxpayer funds to subsidize interest costs for homeowners. That is, tax dollars go to banks to make them whole on the loss they should be taking. That’s meant to be an incentive for them to agree to renegotiate loans, though it does not address the pressing problem of fractalized ownership of debt.

For those homeowners that still find bankruptcy the only option, then so be it. Mortgage holders should take the hit that comes with a full cram down of their mortgage loan in parity with the fair market value of the underlying property. (Itself, in part, a function of each local market’s total home sales, foreclosures included.) That’s one of the consequences of being mutually unable to agree to a renegotiated loan, and it’s one of the incentives needed to encourage more the renegotiation of loans outside of bankruptcy.

What banks want, as many here have been saying, is to be immune from loss. You’d think they were telecoms companies wanting freedom from liability for cooperating with illegal domestic spying. What a hoot. What Congress would agree to that?

Really, the banks are suffering from paralysis.. they don’t want to give up their rights under the mortgages, yet they don’t have a solution. So let’s take it out of their hands.

Interesting idea and a lot more drastic than anything Congress has considered or is likely to do.

However, I agree with your sentiment completely. We can’t let homeowners suffer through this crisis and lose their homes because the banks were stupid. If anybody should bear the brunt of this it’s the fools who thought toxic asset mortgages were AAA quality investments.

New Dem Linda Sanchez on the teevee (msnbc) saying the presiden(cy) already has enough power…given him enough money. sounds really GOP.

He does have a lot of authority and money to help, but changing bankruptcy law (to help people get cram-downs) requires Congress.