Relief for Orange County homeowners under President Obama’s cramdown bill is far from certain. Today there is an indication that leading Republican representatives, mortgage industry trade groups and mortgage lenders have joined forces to oppose relief for homeowners provided by the cramdown bill expected to be introduced Thursday of this week. If Republic representatives and mortgage lenders successfully oppose the Democrat-led relief effort, Orange County bankruptcy attorney practitioners will not have the additional relief offered and will only have limited ability to help homeowners reduce their mortgage debt in bankruptcy.
From the Hill online:
“The financial services industry and House Republicans are fighting back against a bill pushed by House Democrats that would empower bankruptcy judges to write down mortgage interest rates and principal.
The bill could be up for a vote on Thursday and is part of a broader effort to invigorate the housing market and re-brand a federal program begun last year to reduce foreclosures that has had scant results…
The industry says the bill is “overly broad” in allowing too many homeowners to head to bankruptcy courts; it also does not limit the size of a mortgage that can be reduced.
“The housing market is already unstable and enacting cramdown legislation would make things worse by adding even more risk to the mortgage market, effectively undermining efforts by Congress and the administration to stabilize the housing market,” said a dozen trade associations in a letter to House Speaker Nancy Pelosi (D-Calif.) and Minority Leader John Boehner (R-Ohio).
The American Bankers Association, Mortgage Bankers Association and Financial Services Roundtable sent individual letters on Monday to Congress and the administration.”
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