September 9, 2009 - Posted by Tyler Lewis
A bill that will give bankruptcy judges the ability to rework defaulted mortgages on primary residences so that struggling homeowners have a greater chance of keeping their homes may come up in Congress again this year.
The banking industry has repeatedly blocked the bankruptcy bill, even as the rate of past due mortgage loans and foreclosures continues to rise.
Rep. Barney Frank, D. Mass., told The Huffington Post yesterday that he intends to include the bill – which passed in the House earlier this year before it was defeated in the Senate – as part of a larger financial regulatory reform bill. Frank said last month that he would bring the bankruptcy bill back if the mortgage industry didn't take greater advantage of a federal foreclosure prevention program that provides mortgage modifications to eligible homeowners.
UPDATE 5:45 p.m.: Sen. Christopher Dodd, D. Ct., announced that he would remain as chairman of the Senate Banking Committee. There had been some speculation that he would give up his post to replace Sen. Ted Kennedy, D. Mass., as chairman of the committee overseeing health care reform, following Sen. Kennedy's death in August. LCCR was pleased with Sen. Dodd's decision, noting that he has been a strong supporter of consumer-friendly legislation, including bills to expand bankruptcy relief and curtail predatory lending.
Categories: Housing & Lending
