Mortgage crisis? Really, I hadn't noticed.
But apparently, I am advised, there may be some sort of problem:
President Obama’s proposal to address the rising tide of home foreclosures calls for legislation to allow bankruptcy judges under Chapter 13 to modify the terms of home mortgages when families run out of other options.I see some hotshot law professor from Yale thinks this is a bad idea:
The legislation stalled in the House and the Senate for the past two years because of opposition by Republicans and the lending industry. But by 2012, one in every nine homeowners will have lost a home to foreclosure, according to a Credit Suisse Securities analysis. Has the foreclosure landscape changed sufficiently to break the back of the determined opposition?
First, the proposal would swamp bankruptcy courts. There are only about 300 bankruptcy judges, and they are already busy with an increasing number of bankruptcies. Clearing millions of new mortgage cases will take a long time and thus have little immediate effect on the foreclosure crisis. In addition, the flood of new cases would delay the resolution of business bankruptcies, to the detriment of the economy.Professor -- have you been to state court recently? These cases have to be adjudicated somewhere -- why not put them in the hands of those who are expert at valuing assets and determining fair market value?
Also -- aren't there more bankruptcy judges than all federal district judges combined? It's actually 368, btw, but who's counting.....
And the "flooding" Professor Schwartz talks about is not likely to be a permanent condition, as the initial wave of cases is absorbed. Hey, this "scholar" even agrees with me:
But “a more neutral analysis of this is to think back to 2005, about the time bankruptcy law got changed,” said bankruptcy scholar Robert Lawless of the University of Illinois College of Law. “There were two million filings that year, and the system did handle those. There weren’t any reports of major problems.”Well, there will likely be major problems no matter what we do, the question is which approach gets out of this situation faster and more efficiently.