Citigroup and Senate Dems reach a deal on mortgage modification by bankruptcy judges…

housinginyourhands

WOW!!! This will send shock waves through the Mortgage Bankers Association which successfully lobbied against this provision in legislation passed last year….

From MarketWatch:

Senate Democrats have reached an agreement with Citigroup Inc. on a key bill to give bankruptcy judges the authority to eliminate some mortgage debt and help reduce foreclosures, lawmakers announced Thursday afternoon. (MiM here-Bolded by the news report HA! Yeah you betcha they’re wiggin out over this one!)

-snip-

“I hope other institutions will follow suit,” said Durbin, who’s been working since 2007 on legislation to authorize bankruptcy court judges to modify mortgages. “If others join, I think we can enact this as part of [President-elect Barack] Obama’s stimulus package.”

The provision that would allow existing mortgages to be modified was a key part of legislation introduced by Rep. Brad Miller, D-N.C., on Tuesday. Senate Judiciary Committee Chairman John Conyers, D-Mich., also introduced similar legislation on Tuesday.

The National Association of Home Builders also has dropped its opposition to the bankruptcy-judge bill, according to Durbin spokesman Max Gleischman. (MiM again-I am bolding this one, BETCHA there was a quid pro quo, homebuilder stimulus in package in exchange for them dropping their opposition to the amendment, yeah where is my special prosecutor and panel to question them, yeah exactly!!)

Financial institutions have complained that allowing judges the ability to modify mortgages would result in banks absorbing huge losses as a result of the alterations. They also complain that modification by judges would result in higher mortgage rates, which could hurt the housing recovery. A spokesman for the American Bankers Association declined to comment.

Try to catch Kudlow on CNBC Reports tonight, he should be on fire over this, poor Larry…elections have consequences my friend….

January 8, 2009. Tags: , , , , , , , , , , , , , , , , , , , , , . CITI, citigroup, Economy, FDIC, Finance, Foreclosures, Housing, Obama Administration, Politics, TARP, Wall St.

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  1. » Citigroup and Senate Dems reach a deal on mortgage modification by bankruptcy judges… replied:

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