I was wondering when this was going to happen, given that corporate discussions with the Government have not turned out too well for corporate executives. And you can bet that banks were going to get royally screwed if they decided to 'play ball' with the Government concerning 'cram-down' legislation for mortgages.
Democrats had negotiated with JPMorgan Chase & Co., Wells Fargo & Co. and Bank of America Corp. on a compromise. Durbin said the lenders objected after months of talks, and “will not even participate in a negotiation,” although the banks are “surviving today because of taxpayers’ dollars.” The three banks Durbin identified received $95 billion in U.S. aid.“It’s clear that part of the mortgage industry was never interested in meeting us half-way, as negotiations went forward, they moved the goal post back and back,” Senator Charles Schumer, a New York Democrat said. - Bloomberg
Not surprising is that the only bank to agree to the Government 'Cram-Down' legislation is CitiBank, which just so happens to be partly owned by the Government. Also nice how Senator Durbin took advantage of whacking the Industry over the head with TARP funds. Funds the Government is refusing to let banks repay.
Good for the banks for holding the line on this idiotic idea of rewarding mortgage deadbeats. Not for anything, but letting some people off on their mortgages because they bought too much house is not fair and will probably invite many more people to file for bankruptcy just to take advantage of this. Of course the banks will have to raise rates on the rest of us to pay for these bad loans.
If people can't pay their mortgage, it should be up to the bank whether to foreclose or not as well as whether or not to change the terms on the mortgage.
If the Government wants to bail out underwater homeowners, then how about offering up these houses to us at greatly reduced prices. This way, those who acted responsibly get a chance to buy a house at a good price, the underwater homeowners get rid of their houses, and the banks don't get stuck with more properties.
Just saying.
If people can't pay their mortgage, it should be up to the bank whether to foreclose or not as well as whether or not to change the terms on the mortgage.
If the Government wants to bail out underwater homeowners, then how about offering up these houses to us at greatly reduced prices. This way, those who acted responsibly get a chance to buy a house at a good price, the underwater homeowners get rid of their houses, and the banks don't get stuck with more properties.
Just saying.
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