So. Very. Important. This is the current law that allows judges to adjust second homes mortgages (hmm, now who the hell can afford a second home?) but not first (and only homes) where all the pain is centered.
House Democrats this week are expected to add to wide-ranging financial overhaul legislation a controversial amendment allowing bankruptcy judges to alter home mortgages.
The House already passed a bankruptcy measure this year, but the effort died in the Senate, with backers falling 15 votes shy. Senate Majority Whip Dick Durbin (D-Ill.) was unable to round up enough Democrat votes behind the effort.
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The provision is derided as “cramdown” by the financial industry and the Republicans who oppose the effort. The measure would empower bankruptcy judges to rewrite loan terms and lower rates on primary home mortgages. Supporters say it is necessary to force mortgage lenders and servicers to modify loans as the housing market continues to show weakness.
Consumer advocacy groups have argued all year that banks and mortgage servicers are not doing enough to alter home loans in ways that would avoid foreclosures.
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