House Fails on Cramdown in Chap 13

The outlook is bleak in terms of government providing for the common welfare and common defense. We have a coup d’etat that is a fait accomplit. The job is finished. Wall Street and the insurance companies are running the country. So it is up to us to go with the flow and have them wondering about the old saying “Be careful what you wish for.” If they want to run the country they will find they can’t just run PART of it. This is not a pick and choose situation.

If the country is being run for the benefit of the powerful financial sectors and other businesses too big to fail, they are going to find themselves in the same position that every government encounters — disatisfied people who start taking matters into their own hands. If we are going to ignore the protections contained in the constitution and the ideals stated in the Declaration of Independence, then anyone can.

Law enforcement has already shown a willingness to stop serving foreclosure papers. Everyone knows this is wrong. The Titans, who didn’t even show up at Obama’s meeting (again) believe in their arrogance that they can continue their reign of domestic terror forever.

As a student of history and in particular Mr. Jefferson, I personally am quite satisfied that government or the exercise of governmental power ONLY exists by virtue of the collective consent of the governed. The time comes (it always does) when internal and external forces converge on these newly annointed autocrats, and dislodge them from their positions.

This country was created to provide multiple vehicles to allow those transitions to occur without violence, chaos and extremism. As each one of these paths is shut down, the autocrats risk more than their power and privilege.

It seems that despite the fact that we have a Democratic controlled House and Senate, we have further proof that as Sen. Dick Durbin (D-IL) has said “the banks own the place.” The Bankruptcy courts despite not being given the “cramdown tool” in Chap 13 have continued to produce some of the better rulings by simply enforcing black letter property law, particularly with regard to an identifiable real party in interest being joined to foreclosure proceedings. Here again we have further evidence that answers to the foreclosure problem are not going to come from the Legislative or Executive branches of government. The battle will be waged in the courtroom.

Eric Holder, US Attorney General recently said before the Senate Judiciary Committee, “When I appeared before this committee in January for my confirmation hearing, I laid out several goals for my time as Attorney General: to protect the security of the American people, restore the integrity of the Department of Justice, reinvigorate the Department’s traditional mission, and most of all, to make decisions based on the facts and the law, with no regard for politics.”

Well perhaps Mr. Holder can take a sabbatical from worrying about due process for Guantanamo detainees and spend a little time addressing the absence of due process that homeowners are experiencing, paricularly in non-judicial venues like California, Arizona and Nevada. The objective of non-judicial foreclosure was judicial economy, it was not meant to be an avenue to do an “end around” due process.

There is no greater security than HOME for most people. The greatest injustice or illegal seizure of property is still occuring in states that allow non-judicial foreclosure. When combined with the shortage of competent legal representation for homeowners in both judicial and non-judicial states not to mention the cost of obtaining any kind of represenation has resulted in thousands of Pro Se litigants having to fend for themselves.

WASHINGTON (AP) — The House has rejected an effort to expand a Wall Street regulation bill with mortgage relief that would let debt-ridden homeowners reduce their payments in bankruptcy court. The vote was 241-188 to reject.

The provision would have revived a previous bill that passed the House but later failed in the Senate. Democrats hoped that by inserting the provision in the regulatory legislation they would have had another opportunity to make it law. Aiding homeowners through bankruptcy had been a key feature of President Barack Obama’s foreclosure fighting proposal, but the president did not push for it.

Banks and credit unions have lobbied against the bankruptcy measure. They say it would force a flood of bankruptcy filings and ultimately drive up mortgage rates.

12 Responses

  1. Bank Lobbyists Launch ‘Call To Action’ To Crush Financial Reform

    CEO Alert

    December 15, 2009


    Bank CEOs


    Art Johnson, ABA Chairman


    Regulatory Reform – An Update and a Call to Action

    On December 7, I sent you a “Halftime Report” in which I said ABA thought the House would pass narrowly the financial regulatory reform bill. That is what happened last Friday, when the bill passed 223-202, with all Republicans and 27 Democrats voting against it. However, there were some important developments I wanted all of you to be aware of. More important, we need all bankers to commit to contacting your Senators early and often about this legislation, which now moves to the Senate.

    The House: Where We Stand

    ABA was one of the first to support much needed reform. For example, we support the creation of a systemic oversight council and the closing of regulatory gaps, such as in the case of derivatives and hedge funds. We support a strong resolution system for failed institutions that ends too-big-to-fail. However, we have consistently opposed the House bill, and for good reason.

    As I previously reported, during the committee process we were able to block some negative amendments and add some good ones, including an exemption (although not a complete one) for banks under $10 billion from examinations by the Consumer Financial Protection Agency (CFPA) and an amendment requiring that the powerful new systemic oversight agency review FASB’s proposed rules. We were able to protect charter choice through the retention of the thrift charter, although we have clean-up work to do there.

    On the House floor, we also had some positive results. One important change adopted on the floor was the ABA-supported Melissa Bean (D-Ill.) amendment that restored, for the most part, federal preemption for national banks and federally chartered thrifts. Your state association executive will tell you that preemption is important for all banks; if it is removed, as the Administration wants, it will set off an avalanche of state and local laws and regulations that will apply to all banks.

    An amendment to add mortgage bankruptcy cramdown to the bill was defeated on the floor by a strong majority. Given that this amendment had passed the House earlier this year, our win is a strong reflection of the hard work of the state associations and grassroots bankers last week. Since the cramdown concept has now been defeated in both the House and Senate this year, hopefully it will not be brought up again.

    Also defeated was an amendment that would have removed the ABA-supported provision that exempted publicly traded firms of less that $75 million in market capitalization from the infamous Section 404 of Sarbanes-Oxley. Therefore the exemption from 404 remains in the bill.

    An ABA-supported amendment on the CFPA narrowly failed, 223-208, in the face of strong lobbying by the House Democratic Leadership and the Administration. This amendment, offered by Rep. Walt Minnick (D-Idaho), would have changed the CFPA’s structure to a council of existing regulators and removed its unprecedented powers to control bank products and the way they are offered. While we are disappointed it was defeated, the narrowness of the vote sends a strong signal to the Senate that the CFPA is a bad idea.

    Although there are positive provisions in this bill — some that will help the bottom line of community banks, at least in the short term, and some that will set up a better and fairer regulatory system — overall it is a negative bill for our industry. It will increase our regulatory costs dramatically, make it much more difficult to compete, and undermine institutions that are critical to our financial system. While we made important improvements, the CFPA is still a huge problem — an agency that seems set up to turn banks into utilities, with massive power to write regulations over our products, the manner in which we offer them, and even how we compensate our employees. As I outlined in my last report, the bill also undermines the role of the FDIC as an insurer of bank deposits, weakens the FHLB System, and runs the risk of destroying the independence of the Fed. And don’t underestimate the unintended consequences of this truly massive bill.

    Throughout this year, ABA and all the state associations have been united in our opposition to this bill and in our strategy on it. We worked night and day to improve it and to block bad amendments, with the help of grassroots bankers across the country, who we estimate have sent 300,000 letters to Congress this year. After this bruising House battle, we are ready for the Senate, where our positions seem to have stronger support, as we had thought they would.

    The Senate: What’s Ahead and What You Can Do

    To be successful in the Senate, we must have a united message. And that is why I am truly saddened by what I am about to report to you. I do this not to cast blame, but in the hope we can fix this and be united as we go to the Senate.

    Last week, I was on the daily conference call of the ABA lobbying team and the state associations when it was announced that ICBA was supporting the House bill going to the floor. I must say there was shock and disbelief because all the states had just reported that their bankers remained strongly opposed to the bill. All of ABA’s officers are community bankers, as are many members of the ABA Board, which voted unanimously to oppose the bill. Many of the states had recently had similar formal votes. A number of the state associations are jointly affiliated with ABA and ICBA, and they all oppose the bill, as apparently do some of the ICBA state associations.

    Others were surprised as well. Roll Call, the Capitol Hill newspaper, said the Republican leadership “specifically called the Independent Community Bankers of America on the rug for supporting the regulatory reform legislation.” The same newspaper then quoted a top ICBA lobbyist as saying about the bill: “It’s got the balance we’re looking for, regulating the unregulated and leaving community banks more or less alone.”

    This split message, with ICBA indicating support for the bill and ABA opposing, hurt us in the House. We had several close votes we lost, such as the one on the Minnick Amendment. Had the message been unified, we could well have had a better bill. I am hopeful we can be united in the Senate. Right now, Republicans are firm in their opposition to the Dodd draft bill, which is much worse than the House-passed bill, and contains the full CFPA. A number of Senate Democrats are also raising questions about the CFPA and other provisions. We reached out to ICBA, and we sent a joint letter opposing the single regulator concept in the Dodd draft, a concept that could eventually kill the dual banking system. We are optimistic the single regulator will be defeated. But if we have a conflicting message in the Senate — a message that says some in the industry can support a bill like the House bill — we will lose our ability to achieve much more workable regulatory reform, and we will invite the enactment of a bill that will truly hurt us badly for years to come.

    ABA will reach out to ICBA; we will work for unity. Joined by our state association colleagues who have done so much, we will work tirelessly for the future of our industry. But we will need all of you to help. So as one of your New Year’s resolutions, please vow to do everything in your power to show, and to have your colleagues in your bank show, your Senators the right path to true reform.

    Thank you for your support


  2. The only way to STOP the insanity is to STOP feeding the beast. STOP paying your mortgage. STOP paying your credit cards, car loans and student loans. Face it, they’re not worth the paper they’re written on. Starve the beast and STOP paying them !! It’s called anarchy, and it’s what it’s all come down to.


  3. MORE CROOK at WORK!!! Lehman Bankruptcy Judge Approves $50 Million Bonuses

    By Linda Sandler

    Dec. 16 (Bloomberg) — Lehman Brothers Holdings Inc.’s plan to pay $50 million in bonuses to employees handling derivatives contracts was approved by a bankruptcy court judge, who said the payments provide essential incentives.

    Lehman, which is liquidating in bankruptcy, asked Bankruptcy Judge James Peck last month for permission to pay incentives to about 230 full-time employees unwinding the contracts.

    Lehman told Peck in a Nov. 25 filing that the derivatives team had brought in more than $8 billion in cash and settled 17 percent of the contracts.

    A bonus pool “designed to motivate and reward employees” in the group will help to maximize the value of the remaining contracts, it said.

    Diana Adams, the U.S. Trustee who oversees Lehman’s bankruptcy, said in a filing on Dec. 11 that she was questioning why Lehman needs to pay bonuses to people for merely doing their job, particularly vice presidents who have “limited authority” except for signing papers.

    Lehman filed the biggest U.S. bankruptcy in September 2008 with assets of $639 billion.

    The case is In re Lehman Brothers Holdings Inc., 08-13555, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

    To contact the reporter on this story: Linda Sandler in New York at

  4. Livinglies has always told us that we don’t owe what the pretender lenders claim that we owe. I have been involved in the willful fraud of the Servicers for a decade. Here is proof in the pudding that the Servicers, Trusts, and other entities are reaping windfalls (how many of you have been told by a Judge that you were “looking for a windfall”?). MBIA has filed a complaint in NY against Credit Suisse, DLJ and Select Portfolio Service Servicing (formerly Fairbanks Capital). See the Complaint, and others, here:

  5. The government needs to be overthrown. There I said it, now come get me.

  6. This is a country run by the banks and for the banks, the literal manufacturers of money (Google Federal Reserve “Banks actually create money when they lend it”), so it’s no wonder they have all the real power–they can just create money to pay for whatever they want.

    This is the ultimate problem: that private, commercial banks –with the Federal Reserve at the head of them all–create the vast majority of our money supply at no cost to themselves and then sell it to us for pure profit. Nothing else matters as much as that one central issue. The solution to our problems is to take that power away from the banks and give it to the people, i.e., cut out the middleman in money creation.

    This is why ALL foreclosures are fraudulent–the money “lent” to borrowers was just typed into existence, but only after extracting the all important “promise to pay” from the “borrower.” Why should any of us have to pay back a “loan” to someone–i.e., a bank–who didn’t loan us anything? In fact, it is the “borrower” who makes it possible for the bank to create the amount of the “loan” in the first place! The promissory note IS the “funding check” for your mortgage “loan.”

    I know most of the posters and reader on this site already know these things, it’s just all these ripoffs by the banks AND the politicians just make me feel like my head’s gonna explode…

  7. One thing they have forgotten that the man who has nothing to lose, is the most dangerous.

    Right now , the banks have won and don’t care if anyone knows it .

    Time will tell . Pitchforks & torches anyone ?

  8. It is the very arrogance of not only the banks and lenders, but also of a corrupt government ,,, that will ultimately be their downfall.


  9. At least there is this: House Discussing Glass-Steagall Revival, Hoyer Says (Bloomberg News at )

    Call / write to your President, US Senator, Congressperson to advocate for reinstituting the Glass-Steagall Act, which barred bank holding companies from owning other financial companies.

    Most of this securitization mess flowed from that repeal.

  10. I haven’t felt this sad or angry for a LONG time! our country is going to hell, the very people that financially raped us once(well more than once) now are asking the government to give them another chance to keep on raping us all, and the government has agreed to it. What is it going to take for this administration to take positive and REAL action to start protecting the American people? are they leaving IT up to us?
    I agree with you Neil, this is how countries around the world start their downfall, by the whole government taking against “the people” thinking that we are just going to seat on our hands and let them do whatever in the hell they want, boy!! they, the rapists(government) don’t really understand how many people are getting angrier with each passing day, they truly believe that we are very stupid, and useless, and not willing to stand up for ourselves. wrong.
    I wonder how Eric Holder sleeps at night, how he feels when putting that key on his door at his home to open it knowing that many, many people don’t have that feeling anymore, that many people don’t look forward on going “home” anymore, because they don’t have one any longer.
    Our country is setting itself up for some even harsher, more troubling, and more hurting moments; it makes me very angry to think that we call ourselves a “model” to the rest of the world, are we? what are we teaching the rest of the world (some of them already know how to financially rape their own people), but really, what in the hell are teaching the world?, is like the big brother asking the little brother to get off of drugs while he himself, the big brother is high!! come on! how do these “representatives” of the American people can all sleep at night?, maybe they can’t because they must be laughing all night long about how dumb they think we are!………………are we guys and gals? ……….are they right?…………..?
    To all those Judges that are standing up to the “evil machine”, my utmost respect to you, you are the modern heroes of a decaying country!! you are the pillars that are keeping our country up, we thank you for remembering who you are here to serve and protect, your vision of justice will never die, your vision of victory will never be in complete darkness, because you keep that ray of hope shinning on it!! To victory America!!!

  11. Banks have too much power on Capitol Hill.They have some of the most powerful Lobbyists on the Hill! They would lose too much money if a “cram-down” were allowed. So they would rather “steal” your house in foreclosure. They hope most of us are so scared we vacate. Wrong..we fight back! They will lie, scare people and use what ever tactic they can. I almost ran too, I found this website at the last moment and am still in my house, 18 mos. later and no payment! I do believe in the end, the Courts will be the “battlefield” but you most have a skilled competent atty. And between Max Gardner & Neil, I do think they are turning out some real talent now. Think about it, if I am ..BOA, JPMorgan, and I just took over millions of loans for pennies on the dollar, I need to foreclose to make money. They are not in it to “help” anyone. It’s all about money period! Some will “run” & some will stay and fight back! So they foreclose on some, cash in by re-selling the house, and others..well they leave alone cause they do not want to fight a war with a few that have… well-armed Attorneys with new knowledge of how to defeat the Banks. One last thing, anyone who does a loan-mod is an idiot! They sign it, they give up all their right to sue! I was in the middle of one and they foreclosed anyway! Thank goodness, I never signed one thanks to this site! Why, cause once they see you cannot make payments they foreclose anyway. Wise up people get a good atty and fight these banks in Court! Amen!

  12. It’s about damn time to hear this sort of thing on mainstream TV.

    Dylan Ratigan Reams Ed Perlmutter on how Congress can fix the loopholes in financial reform.


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