Micah Green, a partner in the firm’s Washington office, was quoted by the Wall Street Journal on February 9, 2010, in an article about how the mortgage crisis has brought activists and investors together to avert home foreclosures.
Activists and investors have formed a loose coalition to prod banks into sharply cutting the amounts owed by borrowers whose loans far exceed the depressed values of their homes, the Wall Street Journal reported. The newspaper quoted activists and investors saying that principal reductions are the best incentive for borrowers to keep making monthly mortgage payments.
The newspaper reported that BlackRock Inc., a major mortgage-bond investor, is “pushing the controversial idea of letting bankruptcy judges restructure shaky mortgages.” Black Rock proposes that judges eliminate credit-card debt and second liens, mostly held by banks, before touching the first liens often held by investors.
Mr. Green, who represents some large investors in mortgages, told the Wall Street Journal that BlackRock`s idea is good in principle but may not be politically feasible given bank lobbying. Banks, which have been offered Treasury incentives for easing the terms on second liens, should work with investors to help put consumers into "new, properly sized'' loans, Mr. Green told the newspaper. "Everybody's going to have to give a little for it to work," he says.