It seems like the controversial bankruptcy mortgage modification bill may finally reach the house floor this week.
After many stops, starts and speed bumps, the so-called cramdown bill – which will allow bankruptcy judges to modify the terms of some mortgages – could go to a vote as early as tomorrow. The new movement comes after lawmakers agreed to compromise language that would require homeowners to show that they tried to work out a mortgage modification with the lender themselves before judicial action can be taken.
“The concern is that we want to ensure that those people who get relief have tried other avenues,” House Majority Leader Steny Hoyer, D-Md., said Tuesday, according to a report by the Associated Press.
The amendment is aimed to stem opposition from the banking and mortgage industry that unfettered modifications in bankruptcy court would lead to a flood of bankruptcy filings and would impose steep costs on lenders.
Proponents of the measure say that it will encourage homeowners to take responsibility and seek ways to pay their mortgages rather than have them fall into foreclosure.
Meanwhile President Barack Obama is set to release his housing plan today, which is designed to help millions of homeowners rework their mortgage terms.