Comments on: Still the Party of No: Why Republicans Rejected Cramdown

By: BooRadley

BooRadley — Sat, 09 May 2009 23:17:37 +0000

Thanks masaccio.

By: masaccio

masaccio — Sat, 09 May 2009 22:43:09 +0000

I don’t disagree with your view of the renegade democratic senators. What I can’t figure out is why none of the Rs voted for cramdown. It is a really good idea, but that wasn’t enough to persuade any of them, including the moderates, and one or two of them who I know are smart enough to see the wisdom of the idea. I talked to a staffer for one of these guys, who told me he thought his boss would vote for cloture if needed to allow the vote, but wouldn’t vote for the bill itself.

This lemming behavior is hard to understand. Why would anyone vote for a party that is just against government? That line of thinking led to this post.

By: Bobmoon70

Bobmoon70 — Sat, 09 May 2009 22:24:32 +0000

I’m sorry folks but the headline on this is just a bit misleading. Since the election I’ve come to expect the Rethugs to be against any effort to help people in trouble due to the mess that Shrub has brought about. I do however have a real problem with the “RAT” Democrats That allowed the “CRAMDOWN” to be defeated because of their cozy relationship with the Banks.

By: PJEvans

PJEvans — Sat, 09 May 2009 20:24:12 +0000

I heard that BofA loans – formerly Countrywide – is looking to hire a large number of people (what I heard was a four-digit number). Clearly they’re expecting business to continue.

By: masaccio

masaccio — Sat, 09 May 2009 20:19:32 +0000

I generally agree with this. As I pointed out in an earlier post, the community banks were a significant factor in the defeat of the bill, because their hands weren’t dirty.

However, community bank losses on underwater mortgages are just as real as the losses faced by the national banks and the holders of residential mortgage-backed securities. What’s good for the bad guys is equally good for the good guys. The major difference is that community bankers are more likely to know their customer and work out if that is possible. The bad guys don’t.

By: masaccio

masaccio — Sat, 09 May 2009 20:14:25 +0000

Good thought. If the debtor can force a fair price, the value of the toxic waste on the books of the banks will be lower. If the banks can snag the debtor for an excessive price, even if the loan fails later, the books look better right now.

By: sad4america

sad4america — Sat, 09 May 2009 19:24:34 +0000

People should not feel that they can take a chance on a house because if they buy it too high then they can skip a couple payments, buy a new car on credit and declare bankruptcy and they will then be able to get the right house price and keep it. Responsibility and putting in the proper due diligence should be stressed. You make the money when you buy a house not when you sell. Also when you buy a house you should be comfortable making those payments for the next 15-30 years, or whatever you mortgage is for. I can pretty much assure you that you should be able to make money over that span of time.

By: earlofhuntingdon

earlofhuntingdon — Sat, 09 May 2009 19:23:04 +0000

Thanks. Can’t be said too often. This is about power and cutting the pie. The banks and their politicians want it all. We need politicians who want to share the pie.

Citi and its ilk are like John Belushi’s character in Animal House: they’d rather swallow the pie whole, the belch and take what’s on the next guy’s plate and do it again.

No amount of mannerly, polite conversation will change that. It has to done at the point of a law and credible regulations, backed by empowered bureaucrats - none of whom can be “former” Goldman Sachs employees - not paid by the banksters to enforce them.

By: sad4america

sad4america — Sat, 09 May 2009 19:20:28 +0000

I think the downside on this is promoting risky behavior. Banks were forced to provide a greater and greater share of their mortgage loans to lower income, working class families through the community reinvestment act and its beefing up through the years. This lead to ARMs among other more complex mortgage packages that people have an even harder time understanding. I say get rid of these 0% down loans to people, come up with at least 5% and with that you would also need great credit. How can we expect banks to make quality loans when they are forced into bad situations though these regulations. I think it is crazy to expect a person who has rented all their life, not worried or cared about repair and maintenance of a home be allowed to get a 0% down mortgage. They haven’t proven that they can save money for a down payment, how can they afford to uphold and increase the value of a property, much less pick out on appropriate for their needs. There is something about saving for a long time in order to put down for your house that makes you value it a bit more. You put the effort in to understand hidden expenses and what proper maintenance costs and allows you time to practice to put together a budget and save for a rainy day

By: ScentOfViolets

ScentOfViolets — Sat, 09 May 2009 19:02:57 +0000

As I understand it, cramdowns would force the banks to give a public and (more)accurate appraisal of their assets. For the time being, they can pretend that the ‘true’ price of these properties is not the market price, and so can claim that they are merely illiquid; not insolvent. Cramdown provisions would change that.