Mortgage Bankers Association Comments On  Bailout
MBA’s Courson Comments on Draft Legislative Language on Federal Plan to Purchase Mortgage Assets
By: John Mechem

WASHINGTON, D.C. (September 22, 2008) –  John A. Courson, Chief Operating Officer of the Mortgage Bankers Association (MBA) today issued the following statement in reaction to draft legislative language that is circulating on the federal plan to purchase distressed mortgage assets.
“Recognizing that none of this is finished product and that there are important oversight issues that should be addressed, we are nonetheless disappointed that some legislators have decided this is an opportunity to tack on their favorite pet items.  The markets need this facility and they need it fast. 

“Resurrecting bankruptcy cram down during this current crisis would be wholly unproductive and, in fact, runs counter to the bi-partisan efforts to restore liquidity to the global capital markets.  In fact, it is really irrelevant to the current discussion.  Once the fund purchases the distressed mortgages, it doesn’t need a bankruptcy judge to rewrite the loan balance.  It can write down the loan balance itself, without Congress giving bankruptcy judges that authority.

“This is a time that requires strong leadership.  It is not the time to revisit ancillary proposals that have been debated and defeated, like bankruptcy cram down.  We would encourage both parties and both chambers to set aside the issues that will only bog down the process and pass a clean bill that will stabilize the markets and help keep families in their homes without permanently damaging the real estate finance system.”