Bankruptcy Cramdown Legislation To Force Home Mortgage Modifications Fails In Senate

The Wall Street Journal reports:

• A measure to allow bankruptcy judges to rework mortgages of strapped homeowners failed in the U.S. Senate Thursday, clouding its chances of becoming law. The defeat is a setback for the Obama administration, which had championed the measure as a central plank of its plan to right the housing market.

***

• The measure would allow bankruptcy judges to reduce the principal amount of mortgage loans for struggling borrowers - a process dubbed "cramdown." Currently, mortgages on vacation properties, but not primary residences, can be reworked by bankruptcy judges.

For more, see Bill To Let Judges Rework Mortgages Fails In US Senate (subscription required; if no subscription, go here, then click link for story).