House Democrats this week are expected to add to wide-ranging financial overhaul legislation a controversial amendment allowing bankruptcy judges to alter home mortgages.
The House already passed a bankruptcy measure this year, but the effort died in the Senate, with backers falling 15 votes shy. Senate Majority Whip Dick DurbinDick DurbinManchin: Negotiators to miss Friday target for deal on reconciliation bill Democrats look for plan B on filibuster The Memo: Cuts to big bill vex Democrats MORE (D-Ill.) was unable to round up enough Democrat votes behind the effort.
“We’re trying to give the Senate a second chance,” a Democratic aide said on Monday.
The provision is derided as “cramdown” by the financial industry and the Republicans who oppose the effort. The measure would empower bankruptcy judges to rewrite loan terms and lower rates on primary home mortgages. Supporters say it is necessary to force mortgage lenders and servicers to modify loans as the housing market continues to show weakness.
Consumer advocacy groups have argued all year that banks and mortgage servicers are not doing enough to alter home loans in ways that would avoid foreclosures.
The measure this week is supported by House Judiciary Committee Chairman Rep. John Conyers (D-Mich.) and Rep. Zoe Lofgren (D-Calif.). Lofgren's office confirmed to The Hill that it would be offered in the House, so long as the House Rules Committee allows it to proceed.
House Financial Services Committee Chairman Rep. Barney Frank (D-Mass.) has supported the bankruptcy measure.