Should Banks write down 2nd Mortgages?

Realty Check Story on CNBC:

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Barney Frank requested that Banks write down 2nd mortgages to help modification of primiary loans.

Weitz: I think the real story here is that the banks do not have to 'mark their assets to market', thus there is no incentive for the banks to take the write down because they can pretend the loan still has value under current accouting rules which where changed at the peak of the crisis. That said, without the fraudulent accounting, the banks would likely be out of business thus its a 'heads you win, tails I lose situation'.

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