Friday, March 6, 2009

The House passed a bill today to allow bankruptcy judges to rewrite mortgages. The judges would have the authority not only to change the interest rates of the mortgages (questionably semi-reasonable) but also to change the principal (shockingly unbelievable). You can read more about it here

This bill frightens me to no end. The rule of law is out the door and the rule by the will of power has arrived if the Senate confirms this mess (read Neitzsche for more info).

{Caveat: in terms of the rule of law, this bill is not entirely distinguishable from everything else being passed by Congress.}

However, as one who has witnessed the arbitrary power of bankruptcy judges -- (not that I've had a problem with it previously -- sometimes people need to be told that they cannot purchase a car with a 24% interest rate while in a Chapter 13 bankruptcy -- and yes, people in bankruptcy have tried), but those who are debtors who have filed for bankruptcy voluntarily availed themselves to the mercies of the court. Sellers and lenders contracting with buyers did not avail themselves to the bankruptcy court.  Furthermore, it's not like I have all kinds of respect for all lenders these days. But, the principles of contract law will be thrown out the courtroom door and trampled on if judges can singlehandedly change terms of contract -- and that is something for which I have no respect and can't believe the American people will tolerate.

America is on a slippery, slippery slope. 

Which is why ......

I'm thinking of immigrating to Andorra. Who doesn't want to live on the border of France and Spain and pay no income taxes???

1 comment:

Lisa said...

Always so fascinating to read your blog. I just had to chime in on this one. Please check out this link for more info. on the lending issue.

The Center for Responsible Lending is such an important organization.

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