Citi Gets it Crammed Down

You can just bet it's bad if Citigroup allows the mortgages to get crammed down it's throat. In a desperate attempt to keep the ponzi stream open Citi agreed to to have court ordered regurgitated mortgages for dinner and they even prented to like it.

Citigroup Inc., one of nine U.S. banks to get government aid, agreed to support legislation that would let bankruptcy judges cut mortgage rates for at-risk borrowers, three U.S. senators said today as financial industry lobbyists said the compromise was flawed.

Citigroup endorsed the bill after Senate Banking Committee Chairman Christopher Dodd, and Senators Charles Schumer of New York and Richard Durbin of Illinois, agreed to limit the legislation to existing mortgages, rather than future loans.

Flawed it may be and telling it definitely is, that Citi would stoop to this that even the Mortgage bankers won't touch.

The Mortgage Bankers Association objected to the Citigroup agreement and said modifications are needed before the measure helps stem housing declines.

“We remain opposed to bankruptcy cram-down legislation because of the destabilizing effect it will have on an already turbulent mortgage market,” said John Courson, president of the Mortgage Bankers Association, in an e-mailed statement.

Well that's quite a statement from the organization that made the " already turbulent mortgage market" You have to wonder what John is really worried about, maybe Citi wandered off the range, it is unlikely that the fine Senators Twiddle Dee, Twiddle Dumb and Twiddle Dumber brought the measure up on their own, but poof out of the blue there it is and here we are talking about it, ain't representative government great, for those it represents that is. So you can sleep soundly, secure in the knowledge that neither Congress, Citigroup or the Mortgage Bankers Association is trying to stem home foreclosures, rather to bring the dammed up ponzi credit stream to a trickle.

“This legislation would represent an important step forward,” Citigroup Chief Executive Officer Vikram Pandit said in a letter to the Senate released by Durbin. “It will serve as an additional tool to the extensive home retention programs currently in place to help at-risk borrowers.”

Oh my, Oh no, I was sooo wrong, see there Vikram Pandit does care about those at risk, he said
so himself. So where are we, for the consumer the Citigroup agreement may actually help stem the pace of foreclosures as some consumer groups are saying, but the Mortgage Bankers are out for themselves as is the bank, it's just that Citi is by far more desperate, than the Mortgage Bankers Association or even consumers.

You get the idea now, that a hiccup can wipe out the banks entire equity. For a massive bank like Citigroup to have it's equity a breath away from oblivion is to be on the death watch list and the talk of that in polite circles is getting louder as it's share price dips into single digits.

What gets crammed down wont taste nearly as bad as it does coming back up, and you can already tell that this one is going to leave a bad taste in somebodies mouth.