Tuesday, March 17, 2009

Mortgage 'Cramdown' Plan Hits Turbulence in Senate

Mortgage 'Cramdown' Plan Hits Turbulence in Senate; Wall Street Journal

A central piece of President Barack Obama's plan to aid strapped homeowners is running into turbulence in the Senate as Democrats scramble to secure support from both parties' moderates.

The bill, which has already passed the House, would allow judges to write down mortgage debt for people in bankruptcy court. Democratic leaders have long sought such a "cramdown" provision for homeowners.

But in the Senate, the measure has become a flash point for tensions between lawmakers who seek to aid homeowners -- in particular homeowners who owe more than their house is worth -- and lawmakers who feel such assistance penalizes people who have kept up with their debts.

The bill needs 60 Senate votes to clear a procedural hurdle to passage, and Democratic aides say they are several votes shy. They had hoped the bill would reach a vote before the April recess but it has yet to be scheduled. Senate aides involved in the talks say that timing may slip further.

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