From Bloomberg today:
Cram-Down Mortgage Bill Compromise Likely, Hoyer Says (read article here)
The compromise version of the bill so far contains these key provisions, according to the report:
1. Borrowers must make a good faith effort to seek a loan modification from the lender before they are eligible for the cram-down
2. Borrowers must certify that they have provided their income, expenses and debts to the lender
3. The collateral for the loan must be worth less than the amount owed
4. The unmodified loan must be unaffordable to the borrower
The key provision is that the bankruptcy judge will have the discretion to break through whatever is holding up an agreed solution and to make a reasonable modification that factors the interests of both parties. The existence of a strong-arm power like this will drive the parties to negotiate and also eliminate the situation where a mortgage servicer lacks the actual authority to modify the terms sufficiently to accomplish a result where the borrower avoids foreclosure.
This bill appears to deserve support across the board.
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