Ed Koch ( New York City ex-mayor ) to the President : "Legislation should be adopted “allowing homeowners to reduce their mortgage debt to no more than the current value of their property" - "That was done in 1986 to help family farmers"

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Congressman John Conyers (D-MI) : Conyers is the ranking member of the Judiciary Committee in the House and was not long ago its chairman. He asks for this Legislation and Ed Koch supports it.

Real Clear Politics
Mr. President, Please Read This Before Thursday
By Ed Koch
September 7, 2011


Mr. President, Please Read This Before Thursday


Some excerpts :

I propose, as many have, that the bankruptcy laws be amended immediately to empower bankruptcy judges to reduce principal as well as interest. Opponents of this proposal generally respond, “moral hazard,” meaning it would encourage future borrowers to borrow more than they could repay. If “moral hazard” were the standard, why were the banks, which made decisions that were financially devastating to this country, bailed out to the tune of billions of dollars by laws enacted by Congress and signed by you, as well as actions taken by the Federal Reserve? Remember, Mr. President, that banks were given those billions to provide liquidity to businesses, but instead used the taxpayers’ monies to buy U.S. Treasury bonds to enhance their balance sheets with the interest received.

Mr. President, you should propose a quick new foreclosure-bankruptcy proceeding that could restore full title to the homeowners and keep them in possession. Help them with the same alacrity as you did the car manufacturers. Of course, that needs the approval of Congress. You can propose, but Congress must dispose. If they won’t, the country will hold them responsible in the election of 2012.

Jobs, jobs, jobs, is the nation’s cry. I suggest, as I’m sure your advisers have, that you look to what FDR did in the depression of the 1930s. Again, you can propose, but the Congress will dispose. You should propose work programs comparable to the WPA, PWA, CCC and a host of others.

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Mr. President, after I wrote this commentary, I read the New York Times on Labor Day and saw the letter of Congressman John Conyers (D-MI) with whom I served when I was in the Congress from 1969 to 1977, before I was elected mayor of New York City. His letter serendipitously deals with the issue of mortgage foreclosures. He believes legislation should be adopted “allowing homeowners to reduce their mortgage debt to no more than the current value of their property.” He points out that that was done in 1986 to help family farmers. Conyers is the ranking member of the Judiciary Committee in the House and was not long ago its chairman, so I defer to him. In any event, please examine his proposal.

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