Breaking: New House ‘Housing’ Bill contains cramdown/judicial mortgage modification provision…

UPDATE: Reuters has it up:

U.S. bankruptcy judges would get power to modify home loans and mortgages services who alter loans would win protection from bondholder lawsuits under a bill to be considered by U.S. lawmakers later this week, sponsors of the legislation said on Monday.

The Hill:

House Democratic leaders may bring the bill to the floor for a vote on Thursday. The bill is sponsored by House Judiciary Committee chairman John Conyers (D-Mich.) and House Financial Services Committee chairman Barney Frank (D-Mass.)….

…The House bill says that a homeowner must have “attempted” to contact the lender or servicer before heading to a bankruptcy proceeding, but it does not require that the lender has received all the information. The bill also does not appear to limit the value of a mortgage that a judge can write down, which the financial services industry says opens the process up to far too many homeowners.

While most of the financial services industry opposes the cramdown provision, Citigroup earlier this year came out in favor of a form of the legislation in a negotiation with Sens. Dick Durbin (D-Illinois) and Chuck Schumer (D-N.Y.).

For some reason I always hear this song in my head when I think of mortgage cram downs…heh

Per CNBC chyron on Kudlow LIVE:

House ‘Housing’ Bill provisions include:

Upping FDIC credit line from 30b to 100b

Let bankrupcty judges modify mortgages for ‘some’ 1st homes

Offer limited liability protection to firms that modify mortgages

Bill would permanently increase insured deposit limit to 250k

…MiM will follow up as soon as anything is released..

February 23, 2009. Tags: , , , , , , , , , , , , , , , . citigroup, Economy, FDIC, Finance, Foreclosures, Glam Metal, Hair Bands, Housing, Music, Obama Administration, Politics, Popular Culture, Wall St. 4 comments.

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