Cramdowns are coming your way
Below is an interview with an expert on the issue of mortgage cramdowns. Basically, this issue is all about debt forgiveness for borrowers and writedowns for lenders. Lenders do not like cramdowns for that reason. See below for a view on cramdowns from Paul Van Valkenburg of the Mortgage Industry Advisory Corp.
Warning: you should expect him to have a negative bias given who he works for. I actually like cramdowns. Van Valkenburg is looking at this from an investor’s perspective and wants senior creditors not to be negatively impacted by the coming cramdown legislation. Nevertheless, I am posting this video because it is informative as to the impacts on mortgage-backed securities, mortgage servicing and housing.
Cram down – Wikipedia