Politics

Bankers Defeated Bankruptcy Bill Today-But Started Celebrating Last Night *VIDEO*

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You would think this year’s Mortgage Bankers Association annual meeting would be a rather solemn affair — given the criticism the industry has endured in recent months. But while filming at the meeting I found the bankers in a celebratory mood. The reason? A massive lobbying campaign against bankruptcy reform legislation known as “cram-down” was working.

  • http://stubbornfacts.us Simon

    I don’t see a “celebratory mood” in this video – polite applause and nodding, restrained and sober interviewees and speakers. Is this video representative of what you saw, or did you exclude (or were you unable to capture) footage that supports your description?

  • drs

    What do you expect, Simon? Do you think this is like winning a high-school football championship or something? Should they be dancing drunk on their tables and throwing confetti around?

    Celebratory does not equate to “PARTY! WOOO!” even if partying is a way of celebrating. This is a mild celebration, but all that’s required to celebrate(by definition) is to observe an occasion with a ceremony or festivity. And that’s pretty much what they’re doing.

  • kranky kritter

    If I was a banker, I’d be pretty happy that the government didn’t give itself the unilateral power to tell me that some of my borrowers only had to pay back part of what they had borrowed from my bank.

    I do think that underwater mortgages should be renegotiated for the sake of both banks and borrowers. But I think there should be some sort of debt-for-equity swap that allows banks to recoup something when and if the market bounces back.

    In other words, suppose I take a loan for 300k to but a house, and now I own 297k on a house now worth 250. If the government-enforced renegotiation drops the amount owed down to 250, then the bank should have some claim on any gains if the owner later sells for more than 250.

    Credit does not work unless both lender and borrower incur some risk.

  • rob

    Asset write downs are going to happen regardless of whether or not the banks want it to occur.

    Mortgages, being a tremendously overvalued based on the asset against which they are secured, is probably the most obvious candidate.