Mortgage Bankers Don’t Get It

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"Pending bankruptcy legislation would allow bankruptcy judges to modify mortgages in Chapter 13 in order to slow down the foreclosure crisis in this country. Mortgage bankers oppose the bills even though it could ultimately benefit their industry.

Today, they rolled out former Republican Congressman Dick Armey in the Wall Street Journal to attack former Republican Congressman Jack Kemp’s support for the proposals. Armey’s attack boils down to the old saw that, gosh, if you allow people to pay back less than they owe on contracts then it might possibly become more expensive or more difficult to borrow that way for other people.

My friend Kent Anderson has already written eloquently about the independent experts who show that these assumptions are not true. And of course it’s not allowing them out of part of a debt that causes the loss — it’s the consumer’s inability to pay it. If Armey has a way for everyone to pay back their debts regardless of circumstance, then I have missed his name on the ballot for President for Life. He would win."

Read the full article at: Bankruptcy Law Network
Date published: Jan 29, 2008

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