Of Course He Did

by digby

From Congressional Daily:

Senate Majority Leader Reid said today he would drop a cram-down provision from a House-passed banking bill if the language threatened to keep the Senate from passing the overall bill. The provision would allow a bankruptcy judge to reduce a homeowner's mortgage principal. "If we can't get the votes for that, and I am hopeful we can -- I am semiconfident we can -- then what I'll do is take that off [the bill] and do the other banking provisions," Reid said at a Christian Science Monitor breakfast. Reid said he would work to keep the package intact, but raising the prospect of pulling the provision seemed to acknowledge assertions by Sen. Evan Bayh, D-Ind., and others that the cram-down bill cannot pass due to opposition from Republicans and some Democratic moderates.

Apparently, the "compromise" is to only apply cramdown to subprime mortgages, which sounds terrific, right? Except, as Kagro points out here, most of the subprime mortgages have already defaulted. So that's all over. The big money boyz don't want regular qualified borrowers who are caught up in the recessionary blowback of unemployment and soaring uncovered health care costs to be able to renegotiate mortgages through bankruptcy. Moral hazard, dontcha know. Because, gawd knows, these lending institutions are all about morality.