Friday, March 06, 2009

Orwell watch: special cram-down edition

I was glad to see the House pass Obama's mortgage plan, and also got a chuckle from this remark by a spokesperson of the Mortgage Association:

The House yesterday passed legislation that would allow bankruptcy judges to modify the terms of troubled home mortgages, overcoming fierce opposition from the financial industry.

The bill, a package of housing-related initiatives, passed 234 to 191, largely along party lines. It now heads to the Senate, where it will face a tougher fight but has the backing of some powerful members.

Under the legislation, bankruptcy judges could cut the principal on a homeowner's mortgage as well as reduce the interest rate and extend the terms -- provisions known as cramdowns.


This year, the measure also faced opposition from moderate Democrats who forced concessions that require, among other things, a homeowner to share with the lender any profit from the eventual sale of the home if a judge lowers the principal balance. The compromise version also gives preference to reducing a homeowner's interest rate over cutting the principal balance.

"We are pleased that the House moved to limit the harm this bill will do to consumers, and we want to work with the Senate to further contain the damage," David G. Kittle, chairman of the Mortgage Bankers Association, an industry group, said in a statement.


Ah yes. We, the Mortgage Bankers Association of America are expressly concerned about the impact this bill will have for consumers. Including that provision we demanded about making sure lenders get some of any profit from the homeowners, er, "consumers".

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