Will Senate Allow Banksters To Reap More Rewards?
The provision giving judges the power to reduce mortgage principals and interest rates for homeowners in bankruptcy may be stripped from H.R. 1106 by the Senate. The provision, referred to as “cramdown”, would not give more taxpayer money to the banks. Instead, the Banksters may be offered “incentive payments” for “voluntarily” lowering interest rates.
So far, all the foreclosure prevention plans that rely on voluntary participation from the banks have failed. If cramdown is removed from the current bill, we will be left with another voluntary plan plus some cash bonuses for banks. Homeowners who owe much more than the current value of their house will still not be helped.