Citigroup Endorses Cramdown Legislation

Posted by Orb Staff on January 09, 2009 No Comments
Categories : Mortgage Servicing

Citigroup has thrown its support behind bankruptcy cramdown legislation introduced in Congress this week, signifying a big win for Democratic lawmakers pushing the bill, the Wall Street Journal reports.

In letters sent to members of the House and Senate, Citi's CEO, Vikram Pandit, wrote, ‘If enacted, this legislation would represent an important step forward. Given today's exceptional economic environment, we support its swift passage."

Two top officials with the Mortgage Bankers Association – President and CEO John Courson and Chairman David G. Kittle – have jointly released a statement reiterating their opposition to cramdown legislation.

"We were surprised by the suddenness of the announcement and are still evaluating the proposed deal, but we believe there remain a number of crucial issues that need to be addressed," the statement says. Courson and Kittle add that the legislation should be limited to subprime loans and should include a sunset date "that limits how long judges would be granted this extraordinary power."

SOURCES: Wall Street Journal, MBA

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