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 May 04, 2009

Mortgage Modification Bill Faces Opposition in Senate
Known as the "cramdown", the bill that would allow judges to modify the home loans of owners in the midst of bankruptcy, now moves to the U.S. Senate and faces additional troubles.
Senate Majority Whip Richard J. Durbin (D) Illinois stated with some doubt that he hoped that they could garner enough votes to pass the bill- even though it will be very difficult. He continued by stating that even though it is hard to imagine, but mortgage bankers continue to have clout within the Senate chamber.

The "cramdown" bill that the Senate is being called to vote on would contain the following requirements for loan modification: Home owners would need to be at least 2 months behind on their mortgage and have an outstanding loan balance of under $729,750 to qualify. If the amount that the homeowner owes on the loan is decreased by a bankruptcy judge then the borrower would be requires to split any ultimate proceeds with the lender if they sell the property while their bankruptcy case is pending.

Senior Vice President of Government Affairs for the Financial Services Roundtable, Scott E. Talbott, has stated his prediction that the bill will not pass. He continued by stating that the bill continues on an uphill battle and that the garnering of enough votes to ensure passage is unlikely.