August 16, 2009

Sen. Sheldon Whitehouse (D-RI) is holding a field hearing in Providence on Thursday continuing his push for legislation to allow bankruptcy judges to rewrite mortgage contracts, often called "cramdown" because it could force mortgage lenders to reduce principal and interest rates: "Mortgage Modifications during the Foreclosure Crisis: Is there a Role for Bankruptcy Courts?" It's a reprise for the hometown crowd of a July 23 hearing, "The Worsening Foreclosure Crisis: Is It Time to Reconsider Bankruptcy Reform?"

Rep. Barney Frank (D-MA) got a cramdown bill through the House in March (H.R. 1106) but the Obama Administration and key Senators were unenthusiastic, with concern for the sanctity of contracts playing some role, perhaps. He's vowing to try again if the mortgage lenders do not bend to his will.

Sen. Dick Durbin (D-IL) said earlier this month "that if the financial industry is not able to complete 500,000 mortgage modifications by November he would pursue legislation ratcheting up the pressure on the industry." (From The Hill.) His amendment to a Senate bill failed in April.