Friday, November 14, 2008

Cramdowns

Here’s a thought for the day, courtesy of the recent Congressional hearings on the revised plans for spending the bailout money. Some folks are recommending that bankruptcy courts be allowed to renegotiate home mortgage terms. Chris Dodd, in particular, all but said "We'll make this happen, even if we have to wait until the new Congress is in session."


Bankruptcy courts can currently renegotiate the terms of a mortgage loan on a vacation home and on a boat. They cannot renegotiate the terms of a mortgage loan on a home that is the homeowner’s primary residence.


How is it OK to work out new loan terms on a person's boat or second home but not their main residence? Doesn't that seem just a little slanted in favor of the wealthy? Hmmmm?


I actually wish someone would come here and comment, and give me a reasonable explanation why this isn't just a benefit for only people wealthy enough to own a second home or boat. In the spirit of the 52 to 48 folks, I'm ready to listen. Seriously.