Battle For Bankuptcy Cramdown Legislation - Round 2 Begins In U.S. Senate

The Washington Independent reports:

• Roughly three months after Senate lawmakers killed legislation empowering homeowners to escape foreclosure through bankruptcy, some upper-chamber Democrats are looking to revive the corpse. They hope to pressure the White House into spending valuable political capital on a cause fallen by the wayside. Up to now, policymakers have relied on programs that subsidize lenders and mortgage servicers who volunteer to alter loans to keep homeowners afloat. Yet those voluntary modifications lag far behind the rising tide of foreclosures. Indeed, only 160,000 homes have been propped up this year under the largest such program — a figure dwarfed by the more than 1.5 million foreclosure filings since January.

For more, see Band of Senate Dems Pressures Obama on Cramdown (Durbin Hearing Makes Case for Addressing Foreclosure Crisis in Bankruptcy Court).

See also:

• Rethinking Cramdowns as Foreclosures Roll On,
• Mortgage Cramdown Redux (Among other things, this story reminds us that judges already hold this "cramdown" power for pretty much any type of secured debt, like auto loans or vacation homes, but not for most borrowers’ primary residences),
• One Is the Loneliest Number (A Senate Judiciary subcommittee hearing on a proposal to allow bankruptcy judges to modify the mortgages of troubled borrowers kicked off Thursday with just one senator in attendance - the subcommittee chairman, Sen. Sheldon Whitehouse, D-R.I., who was leading the hearing).