Update 2: Centrist Dems argue over bill changes as Durbin tries to limit cramdowns to ‘exotic subprime loans” only at banks request…..Housing: House Bankruptcy Cramdowns/judicial modification bill

UPDATE: AP and El Rushbo just reported Moderate Dems having closed door dispute with Speaker and Bill Sponsors over how this cramdown legislation will affect currently struggling homeowners..if this doesnt help anyone but  EXOTIC Subprime loans, then it is a STUPID people rescue or the Irresponsibility Act of 2009 and really if you listen to things Robert Reich said about making sure the stimulus jobs dont go to white engineers, then you start to question what social engineering they are doing here…

CALL YOUR CRITTERS FOLKS

A dispute among House Democrats stalled legislation Thursday to let bankruptcy judges reduce the principal and interest rate on mortgages for debt-strapped homeowners.

It hit a snag after a group of moderates expressed concerns in a closed-door meeting of House Democrats about how the bill would affect homeowners who are still struggling to make their mortgage payments.

The banking industry has lobbied hard against the measure, mounting a successful multimillion-dollar effort last year to kill it.

This year, mortgage industry players who are scrambling to narrow the scope of the measure to reduce its potential cost for banks have won some key concessions. House Democrats agreed to limit the measure to existing loans made before the bill is enacted and to borrowers who can show they tried other ways of modifying their home loans before resorting to bankruptcy, among other changes.

But banks want to go much further, restricting the bill only to subprime or other exotic loans.

Centrist House Democrats who have been working closely with the financial services industry to scale back the bill balked at supporting it on Thursday after a news report suggested that Sen. Dick Durbin, D-Ill., the lead sponsor of the bankruptcy measure in the Senate, was willing to limit it only to subprime mortgages. The Senate is expected to take up the legislation within two weeks.

In the House, Rep. Ellen Tauscher, D-Calif., the head of the business-minded New Democrat Coalition, raised concerns during the private session that the measure omitted help for homeowners who aren’t staring at bankruptcy but are buckling under burdensome mortgage payments.

House leaders said they had postponed a vote until Tuesday to give Democrats time to meet with Obama’s housing secretary, Shaun Donovan, about how the measure fits with his housing plan.

“There’s an equity question here,” said Rep. Ed Perlmutter, D-Colo., another member of the coalition. “The discussion has got to be, what’s the benefit to the guy next door who is struggling to pay the bills, is paying the bills and isn’t filing for bankruptcy?”

More clips from the Speaker

LIVE ON CSPAN

Expected to vote on this today

Here is what the Critters have been up to this morning:

Continues after the break

Courtesy of the Speaker herself:

Today, the House is debating the Helping Families Save their Homes Act, H.R. 1106, which begins to put part of President Obama’s Homeowner Affordability and Stability Plan into law. This plan will help up to 7 to 9 million families restructure or refinance their mortgages to avoid foreclosure—as well as their neighbors whose own house values will drop as a result of a nearby foreclosure. Learn more about the legislation at http://www.speaker.gov/newsroom/legis…

February 26, 2009. Tags: bankruptcy, bankruptcy cramdowns, Bankruptcy Judges Mortgage Modification, Congressional Leadership, Economy, Finance, Foreclosure Mitigation, Foreclosures, Harry Reid, HOLC, home foreclosures, Housing, HR 1106, Mo Mods, Obama Administration, Pelosi, Politics, recession. Economy, Finance, Foreclosures, Housing, Music, Obama Administration, Politics, Uncategorized.