By Susan Ferrechio
Chief Congressional Correspondent
When President Barack Obama announced a $275 billion plan to aid the housing market, the White House included a provision that would allow bankruptcy judges to reset the terms of some home mortgages. But legislation is still needed for the change and Congress will consider such a bill as early as next week.
“Maybe next week or the week after that, but soon,” said a top Pelosi aide. Democrats are clamoring for such a provision as a way to help distressed homeowners, particularly those whose home values have left them owing more than their home is worth.
Lenders hate the idea and say it will further cripple the mortgage industry. They and are backed by Republicans, who have dubbed it “cramdown” legislation. A similar bill failed to pass in the Senate last year but with a much bigger majority, it will likely clear Congress soon.
