Why a Mortgage Cramdown Bill Is Still the Best Bet to Save the Economy | Truthout
With the mortgage meltdown showing no signs of abating, it is the time to set the record straight on the best plan we have had for reviving the housing market: the 2009 bankruptcy reform bill known as the cram-down bill. That controversial piece of legislation would have given bankruptcy judges the authority to write down mortgages on a primary residence to the current fair-market price of the property. In addition, cram-downs would have enabled bankruptcy judges to monitor and stop some of the widespread robo-signing abuses—where banks have been using fraudulent documents to foreclose on homeowners.
See below--this policy would allow BK judges to reduce the principal on mortages in Chapter 13 proceedings.