Murrican
Oct 28th, 2008, 09:57 PM
http://www.kypost.com/content/middleblue1/story.aspx?content_id=c2a58374-cf7c-42e2-901a-194805ff2918
I highly recommend also reading the last 7 paragraphs in this article...
Judge: Blame Falls To Credit Industry
Last Update: 10/08 9:37 am
By Al Smith
Agreeing with House Financial Services Committee Chair Barney Frank that the current financial turmoil “ was brought on by mortgage foreclosures,” Kentucky’s senior federal bankruptcy judge, Joe Lee of Lexington, also blames a greedy credit industry for selling Congress “a bill of goods” three years ago.
The lenders’ lobby is now using the same “scare tactics,” pressuring Treasury Secretary Henry Paulson not to allow bankruptcy judges to adjust mortgages to avoid foreclosures , Judge Lee said this week.
While Paulson and the Federal Reserve rain financial get-out-of-jail cards on Wall Street, one group catching little forgiveness are Main Street consumers piled up under credit card debt, bad luck and wrong choices about borrowing for subprime mortgages in an easy credit market. Their fault? Some of it, sure. But don’t they deserve a better break?
While the Wall Street Journal, unsurprisingly, says “no,” the New York Times says, “yes,” that much of the pain was created by unregulated credit, giving mortgages to less than creditworthy people (meaning “subprime”), and by harsh amendments to the bankruptcy code in 2005. Those amendments have now backfired on banks as foreclosures offset gains.
Over 1,200 new home foreclosures were filed in Kentucky in July, the state climbing to 35th in a distressed national economy producing an estimated three million vacated homes on the market for 2007 and 2008. Bankruptcy court lacks the theatrics of an O.J. Simpson trial, but it can be heartbreaking, and Judge Lee probably knows more about it than almost any living American. Author of a standard textbook and 40 articles on bankruptcy, at 83 he is among the five most senior of the country’s 363 bankruptcy judges, and perhaps the most respected. We have been friends for 20 years, so I called him for perspective.
He has four recommendations for Congress . They begin with a role of judges which Paulson and the financial industry oppose---that is, permitting them to adjust mortgages to stave off evictions and keep owners in their homes, paying taxes and insurance and managing until the properties regain a realistic value. The lenders’ lobby says that every bankruptcy filing costs each American family a “hidden tax” of $400. Lee says the claim is as “phony this month as when it was advanced in 2005.” But first, more background:
Spending some $25 million on campaign donations, including $8 million in the 2004 election that gave President Bush a second term, a coalition of lenders won an eight-year struggle to make it more difficult for borrowers to discharge their debts in bankruptcy.
I highly recommend also reading the last 7 paragraphs in this article...
Judge: Blame Falls To Credit Industry
Last Update: 10/08 9:37 am
By Al Smith
Agreeing with House Financial Services Committee Chair Barney Frank that the current financial turmoil “ was brought on by mortgage foreclosures,” Kentucky’s senior federal bankruptcy judge, Joe Lee of Lexington, also blames a greedy credit industry for selling Congress “a bill of goods” three years ago.
The lenders’ lobby is now using the same “scare tactics,” pressuring Treasury Secretary Henry Paulson not to allow bankruptcy judges to adjust mortgages to avoid foreclosures , Judge Lee said this week.
While Paulson and the Federal Reserve rain financial get-out-of-jail cards on Wall Street, one group catching little forgiveness are Main Street consumers piled up under credit card debt, bad luck and wrong choices about borrowing for subprime mortgages in an easy credit market. Their fault? Some of it, sure. But don’t they deserve a better break?
While the Wall Street Journal, unsurprisingly, says “no,” the New York Times says, “yes,” that much of the pain was created by unregulated credit, giving mortgages to less than creditworthy people (meaning “subprime”), and by harsh amendments to the bankruptcy code in 2005. Those amendments have now backfired on banks as foreclosures offset gains.
Over 1,200 new home foreclosures were filed in Kentucky in July, the state climbing to 35th in a distressed national economy producing an estimated three million vacated homes on the market for 2007 and 2008. Bankruptcy court lacks the theatrics of an O.J. Simpson trial, but it can be heartbreaking, and Judge Lee probably knows more about it than almost any living American. Author of a standard textbook and 40 articles on bankruptcy, at 83 he is among the five most senior of the country’s 363 bankruptcy judges, and perhaps the most respected. We have been friends for 20 years, so I called him for perspective.
He has four recommendations for Congress . They begin with a role of judges which Paulson and the financial industry oppose---that is, permitting them to adjust mortgages to stave off evictions and keep owners in their homes, paying taxes and insurance and managing until the properties regain a realistic value. The lenders’ lobby says that every bankruptcy filing costs each American family a “hidden tax” of $400. Lee says the claim is as “phony this month as when it was advanced in 2005.” But first, more background:
Spending some $25 million on campaign donations, including $8 million in the 2004 election that gave President Bush a second term, a coalition of lenders won an eight-year struggle to make it more difficult for borrowers to discharge their debts in bankruptcy.