Obama and the "Cram Down"
Obama Plan on Housing Said to Push on Lenders - Companies * US * News * Story - CNBC.com
"That change, sometimes described as a mortgage “cram-down,” would greatly increase the bargaining power of borrowers in negotiating new loan terms with their lenders. The banking industry has vehemently opposed it, warning that investors will stop financing mortgages if they know that a judge can unilaterally change the terms at a later date."
So Barry wants bad borrowers to be able to get a judge to just change the mortgage for them. Nice, that will encourage lending. Why would a mortgage company lend money if a judge can just change the interest rate ? Barry and his people want lending to lower income earners but this would cause lending to freeze up other than to the absolute best credit scores - which may not be a bad thing long term but it will make home lending worse than it is today.
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