MBA Weighs In On Federal Asset-Purchase Plan

John A. Courson, chief operating officer of the Mortgage Bankers Association (MBA), has criticized portions of the draft legislative language that is circulating on the federal plan to purchase distressed mortgage assets. Specifically, he objects to the introduction of a bankruptcy cram-down provision.

‘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,’ Courson says. ‘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 bipartisan efforts to restore liquidity to the global capital markets. In fact, it is really irrelevant to the current discussion,’ he states.

‘Once the fund purchases the distressed mortgages, it doesn't need a bankruptcy judge to rewrite the loan balance,’ Courson continues. ‘It can write down the loan balance itself, without Congress giving bankruptcy judges that authority.’

Source: Mortgage Bankers Association


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