Posted on 10/02/2008 9:46:27 PM PDT by Dems_R_Losers
Barack Obama called Maryland Rep. Elijah Cummings on Tuesday with a promise: As president, he would revisit bankruptcy laws to give judges more leeway to prevent foreclosures.
Obama didn't need to lay out a quid pro quo because the message was clear.
Cummings, who voted against the financial-markets bailout on Monday, told Obama he was “open” to changing his vote but wasn’t there yet.
"I have to look beyond [the bailout] to a rainbow called Obama," he said. "When you bring in the Obama factor, that's very very important."
As the final high stakes vote on the bailout bill approaches Friday, Cummings is not alone among lawmakers who have found solid reasons to reconsider their vote. Whether it's the "Obama factor," or the fact that billions in new tax incentives have been added to the bailout bill, it's becoming clear that opposition is wilting to the $700 billion financial rescue plan just in time for a second House vote on Friday.
(Excerpt) Read more at politico.com ...
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She couldn't. That same provision is already in the 'rescue' bill that her boss endorsed.
If McCain loses election, his unwillingness to turn this issue back on rats will be a primary cause. Suppose he opposed the bailout because of pork and deficit spending?, Suppose he asked Obama why he supports bailing out investors that make risky decisions and make money during the boom and expect taxpayers to pay during the bust? Suppose he asked if Obama NOW supports ‘trickle down’? Suppose he asked Obama why an invester bailout helps the economy when he is claiming ‘trickle up’ on his website(I link to it) , claiming tax increases and ‘tax rebates’ =welfare checks will revive the economy? Suppose he made Obama debate the bailout bill? NO , McCain caved, voted for the bill and HID like a coward during the senate debate where Obama attacked republicans for ‘trickle down’ . Pathetic, makes me sick.
‘Why Republicans supporting democrat’s investor bailout bill is political suicide’ link
http://www.freerepublic.com/focus/f-news/2094884/posts
"Reduction in the interest rate
Reduction of Loan Principal
Other similar modifications" (of loans)
McCain signed it. Bush will sign it. We will end up buying homes for deadbeats.
What I want to know is what Biden meant last night when he said something about “adjusting principle.” Do they actually plan to tell banks they can’t recoup all the money they’ve loaned? Scary stuff.
In the rescue bill, the government is given the authority to negotiate modifications of the loans with the servicer on behalf of the borrower. Servicers are already doing this directly and voluntarily with millions of distressed homeowners (check out www.hopenow.org for details). A voluntary loan modfication, even a reduction in principal, can be a good deal for the servicer if the alternative is a foreclosure and a sale at 10 cents on the dollar. Many of the mortgages underlying the securites that Treasury will buy under the bailout are in default and will need to be modified to get those borrowers paying, so that investors will want to buy the securities and they can be accurately priced.
The difference between this and a bankruptcy proceeding is huge. First of all, bankruptcy is adversarial and once the borrower files the servicer cannot contact them directly, they must go through their attorney and the court for everything. This is very tedious and expensive for the servicer. Second, the judge has almost unlimited authority to decide what is best for the creditor and the debtor. Judges have no understanding of mortgages. Lawyers will be bringing in lowball appraisals to demand huge cramdowns of principal, they will claim "predatory lending" and ask for the mortgage to be rescinded altogether, they will demand that "teaser rates" on ARM loans be made permanent, etc.
This will be a nightmare, and could lead to over a million new bankruptcy filings within days. Anyone who is on the edge of being able to afford their mortgage or is already in default would be crazy to not file bankruptcy immediately.
I will openly admit I have no patience to read the bill other than excerpts.
So, I ask those of you have have. Are these adjustments ONLY to gov’t owned loans? Or are they for loans owned by financial institutions?
I ask because if they are on gov’t owned loans, it makes a little more sense. In this case the gov’t rightfully has the ability to change the terms to benefit the lendee.
OTH, if this affects notes owned by financial institutions, the idea of a secured loan is null and void.
“We will end up buying homes for deadbeats. “
We were doing THAT already ... in the Housing bailout bill of a few months back.
“This is unbelievable. If you think the mortgage situation is a mess now, wait until every mortgage in America can be rewritten arbitrarily by a bankruptcy judge”
This was a dangerous provision that is NOT in the current bill, but WAS in the Dodd Democrat version floated last week.
Effectively, this is a sign of what the Democrats WOULD do if they had keys to all power.
It’s sickening beyond belief. That would screw investors and responsible homseowners alike on behalf of the irresponsible.
I guess that is what “bailout” means: Screw the productive and help the irresponsible.
Thanks for that important clarification. Everyone should read #45.
The nightmare bankruptcy-rewrite-cramdown provision scenario is not in the current bailout bill, but could well become law if Obama is President.
“His support for this bill makes him agree with Obama that contracts mean nothing. “
Wrong. Obama is making promises of adding this provision in a FUTURE bill its not in the current bill. See #45 to get corrected.
I agree with you. The law was revised in favor of the corporate thieves.
“Giving lenders and other funding providers protection helps us all, by increasing competition and lowering the cost of borrowing. It is a major difference between us and undeveloped economies. “
HEAR HEAR!!!
Allowing contracts to get torn up more easily screws investors and responsible borrowers alike. Having assurances and trust in the contract is what makes the economy work.
IF YOU CANT TRUST A CONTRACT, YOU CANT MAKE A CONTRACT.
I was all for seperating bankruptcy into categories all of which you had to pay according to your ability.
One would be medical bankruptcy. But at least 80 percent of your debt had to be medical. No claiming it was all medical when you have 20,000 in credit card debt and 10,000 in medical bills.
But on the flip side I work at a company with a lot of young people who make 40,000 plus and don’t take the company health insurance that only is 52 a month but they have all the latest electronic stuff.
One of those guys got very sick and now has 100,000 in bills. Sorry to me it’s his fault he has that much debt. He had a 40,000 car all the latest designer clothes all the latest electronics and made 53,000 a year and didn’t want 52 a month taken out of his check for insurance that would have covered almost the entire bill.
I am talking about ‘this’ bill. The contract here is that these type of high yield risky investments (subprimes )are NOT insured or guaranteed by the taxpayers like FDIC accounts are. Now McCain and Obama are ,after the fact , after the loss, guaranteeing these with tax payer money. So those of us that put our money in safe FDIC investments will now pay income tax on that interest to pay the investors for their losses for risky high yield investments.
Worse : Given this McCain has no basis for opposing any other bailout, takeover, power grab, or tax increase without looking like he favors the investor over the average guy. In fact, why would we believe anything he says??
“Now McCain and Obama are ,after the fact , after the loss, guaranteeing these with tax payer money. So those of us that put our money in safe FDIC investments will now pay income tax on that interest to pay the investors for their losses for risky high yield investments.”
That’s not quite how the bill works. It directs the Treasury to buy distressed assets keeping in mind the taxpayers interest. In other words, to buy distressed assets in a way that its as good an investment as possible. (Actually the GOP House was proposing an insurance mechanism which would be that.) The Govt gets warrants for some upside benefit to firms.
In short, the bill is not guaranteeing any particular loss nor does that operation impair any contract. It is, like the Resolution Trust Corp in the wake of the S&L crisis a ‘mop up operation’ of distressed mortgage assets.
“Given this McCain has no basis for opposing any other bailout, takeover, power grab, or tax increase” McCain has been consistent in the need to regulate wall st better AND to cap spending AND to oppose tax increases. This bill costs money but the argument is that the harm to economy would cost us more so its worth it (we can disagree with that argument but that is the thought process).
I dont see any change or lack of consistency there. McCain is not a hard-core free-market type so if your point is that he will support other govt interventions down the road, point taken. It’s clear that there is a big differences with obama on taxes, spending and regulation.
Banking becomes politicized.
Revelation 13:17 so that no one could buy or sell unless he had the mark, which is the name of the beast or the number of his name.
McCain ought to put this on the airwaves. But he won’t, and he’ll get a choice seat at Obama’s inauguration. I keep wondering if the economy is going to recover on its own during Obama’s first term so that he can claim credit for it (no doubt that he would). I begin to doubt that will happen. American voters are happily walking into the concentration camps.
Actually, secured loans have always been included in bankruptcy proceedings, how they are dealt with depends on which chapter one files and in a chapter 7 the debtor has the option of re-affirming secured loans in order to retain the collateral. Should they decide to discharge a secured debt then the collateral is returned to the lien holder.
There is a homestead exemption built in to the code that allows a debtor to have a set and small amount of equity in their home if they are current or can become current on their mortgage. Many who file are not behind on their mortgage to begin with. Otherwise they lose the home.
All that is being suggested here is that the individual judge who is hearing the case be given the discretion to size up the debtor in front of them and make what we hope to be a sound judgment based on the fact that he is the authority figure closest to the situation. Judicial discretion is one of the cornerstones of our republic and has been diminished far too often in the last 30 years, taking the final judgment away from the hands closest to the situation and placing in the capricious hands of congressmen hundreds or thousands of miles away.
And remember, not everyone who files bankruptcy is a deadbeat. The historic purpose of the bankruptcy is to provide relief for people based on the understanding of the universal truth that sometimes bad things happen to good people. These are such times and I would rather our government be focused on helping people stay in their homes than increasing the alarming number of homeless people who already inhabit the street of my city, and probably yours too, who in the long run will cost us more than any readjustment of interest payments or principle owed.
Tough times lie ahead my friend and their may come a day when you too feel entitled to a little mercy from the system you’ve helped propped up most of your life.
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