Looks like the cramdown provisions will be taken out of the stimulus bill, but this is frankly puzzling to me. Because Americans need to have mechanisms to renegotiate the values of their homes, and thus their mortgages. And every single person I’ve read on this subject has said that this will result in fewer foreclosures which means fewer toxic mortgages and banks will be able to stabilize their balance sheets.
Why would Republicans be against that?
As I noted below, anonymous House Dem staffers told Politico that Nancy Pelosi and the House Dem leadership were dropping from the bill the so-called â€œcram downs,â€ which give judges the power to renegotiate mortgages on terms that are better suited to homeowners who are in trouble. House liberals wanted this, and it was unclear why the leadership had done this.
Iâ€™ve just confirmed from a senior House Dem aide that the House leadership did this at the behest of Obama aides, who asked the leadership to chuck the provision. This is the second such move: It comes after the news this morning that Obama had personally appealed to Pelosi to drop family planning funds for low-income people from stim package â€” also to placate Republicans.
Do know that the speculators who bought multiple homes with internest only loans hoping to flip them for profit can do currently do cram downs on their multiple properties.
Again, a curious request by Republicans, but another move by the Obama administration to build consensus for the bill.
More as it develops…