Obama’s Biggest Income Redistribution Day: 1 Loss; 1 Jury Still Out

The Senate handed a victory to the banking industry on Thursday, defeating a Democratic proposal that would have given homeowners in financial trouble greater flexibility to renegotiate the terms of their mortgages, the New York Times reported.

The House bill contains the bankruptcy provision. But the Senate’s defeat of the so-called bankruptcy cramdown measure all but makes certain it will disappear from the final bill.

Thursday, the President’s plan to “cramdown,” which would have allowed bankruptcy judges to force lenders to adjust downward the principal owed on mortgages, died in the U.S. Senate.

“Cramdown” would have rewarded people that no longer had the means to pay their mortgages with new, government “gift” mortgages with lower principal owed.

Across town yesterday, President Obama attacked the “senior secured creditors” who normally get paid first, by law, in a business failure.  Obama said  “I do not stand for them,”

The Obama plan will pay the United Auto Workers union, which is an unsecured creditor, for the $10.6bn Chrysler owes to its retiree healthcare fund.

“What’s happening is the senior secured creditors are going to get 29 cents on the dollar and the unsecured creditors are going to get $10bn,” said Mr Tom Lauria, a bankruptcy attorney at White & Case, representing a group of secured lenders.
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Negotiations aimed at preventing a bankruptcy filing fell apart when the funds refused to agree to the Obama administration’s deal and the adminsitration refused to offer them a bigger return.

Administration officials called the senior creditors “un-American.”  But at Peace and Freedom it seems to us that it is the president here who is un-American. ,  For decades there have been leagal protections for the American investors who take high risks and then see their invested corporation fail.  The senior lenders have always been paid first….

Related:
http://hotair.com/archives/2009/05/01
/cramdown-gets-crammed-down-in-senate/

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Obama-Chrysler-Fiat-GMAC-Canada: If This Works; Pigs Can Fly

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One Response to “Obama’s Biggest Income Redistribution Day: 1 Loss; 1 Jury Still Out”

  1. jonolan Says:

    The only creatures I see that are un-American are Obama and his Liberals.

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