As ‘Cramdown’ Fails, the Financial Industry Rejoices (With Video!)
Sen. Dick Durbin (D-Ill.) took to the Senate floor on Thursday and talked about the implications of Congress’ cave to the banks on his mortgage “cramdown” proposal, which would have allowed bankruptcy judges to reduce loan amounts and keep borrowers out of foreclosure and in their homes. Durbin eloquently summed up the way Congress has shamefully allowed the financial industry to call the shots in the debate over the measure. Here’s an excerpt:
One other argument that I think takes the cake: “Senator, you understand the moral hazard here. People have to be held responsible for their wrongdoing. If you make a mistake, darn it, you’ve gotta pay the price. That’s what America is all about.” Really, Mr. Banker on Wall Street? That’s what America is all about? What price did Wall Street pay for their miserable decisions creating rotten portfolios, destroying the credit of America and its businesses? Oh, they paid a pretty heavy price. Hundreds of billions of dollars of taxpayer’s money sent to them to bail them out, to put them back in business, even to fund executive bonuses for those guilty of mismanaging. Moral hazard, huh? How can they argue that with a straight face? [...]
And here’s the full video, which is well worth watching (after the jump):
Also, the American News Project is out with a video showing mortgage bankers in celebratory mood as the bill heads for defeat:
Bankers toasting their success in killing a measure that would have helped troubled borrowers puts a new spin on the notion of moral hazard. In the meantime, bankruptcy judges can continue as usual to renegotiate the terms of mortgages on vacation homes and investment properties, owned mostly by the wealthy.