Personal opinon…….This looks dangerous. Bernanke et al want no involvement for judges to modify mortgages. They have a point for involvement in direct lender / borrower arrangements perhaps; though judges do get involved in ordinary bankruptcies.
However if a blanket involvement of judges is a step too far, why not restrict it to past loans which have been sold by the originator: ie restrict their rulings to help those with mortgages sold though securitisation around the world. If the judges are not allowed to modify terms on these mortgages, these properties will ALL be dumped on the market because the service organizations are not authorized to renegotiate (as the banks are doing for loans still on their books).If it restricted to securitized mortgages it won’t affect the price of new mortgages Don’t throw the baby out with the bathwater Mr Bernanke.
Of course I know you patient renters out there want full melt down , so Bernanke’s stand may be convenient; but there the clear risk of extreme over-shooting on the downside which threatens the real economy (jobs and wages). Lobby your representative!
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