May 26, 2011
The FASB should never have been manipulated into carrying mortgages at face value rather than market value. This has caused a great deal of resistance to modifying loans and, of course, was motivated by increasing CEO bonuses. Now, buried in the Attorneys General agreement, they are proposing the mark down worthless second liens proportionately to the primary liens, instead of writing them off. This overturns 500 years of English common law and should be stricken form the agreement. Again, carrying those worthless second mortgages impedes loan modification and makes the banks mistakes look less bad. Tell them it's time for them to swallow their share of the losses and to reflect this in CEO pay.
I’m writing because my family and I were affected by the economic collapse of 2008, and we don’t want it to happen again.
One way to change the incentives so Wall Street doesn’t collapse our economy again would be for regulators to set up a way for shareholders to grab back ill-gotten gains.
If it turns out that the profits in a given year were built on shoddy practices that become clear in the out-years, those bonus payments should be forfeited.
Thank you for considering my comment,
Sarajane Siegfriedt
Seattle, WA