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RSS FeedThe ‘Specter” of Mortgage Modification in Bankruptcy |
Posted at The Loan Modification Expert by Peter Collins
Apr. 29, 2009
Categorized in: Loss Mitigation
Could the Senator’s defection to the Democrat’s mean Judicial Modifications?
From The Washington Post….
Pennsylvania Sen. Arlen Specter will switch his party affiliation from Republican to Democrat and announced today that he will run in 2010 as a Democrat, according to a statement he released this morning.
Specter's decision would give Democrats a 60 seat filibuster proof majority in the Senate assuming Democrat Al Franken is eventually sworn in as the next senator from Minnesota. (Former senator Norm Coleman is appealing Franken's victory in the state Supreme Court.)
What does this mean for the judicial mortgage modification or “cramdown” provision in bill HR1106?
Currently, a 16-member coalition known as the Moderate Dems Working Group was announced in a press release on March 18.
At this time, it is unclear where the members of the Moderate Dems Working Group stand on the "cram down" legislation. Only three of the 16 senators returned calls inquiring about their stance on granting judges the power to adjust mortgages in bankruptcy.
The three responses were evenly split. A spokesperson for Sen. Ben Nelson said that he opposed the provision because it would raise interest rates on other borrowers and further destabilize the mortgage industry. A spokesperson for Sen. Kay Hagan (D-North Carolina) said that Senator Hagan "had reservations about the bill and is currently considering changes and discussing it with her colleagues." A spokesperson for Sen. Bill Nelson (D-Florida) said that Senator Nelson has supported "cram down" in the past and continues to support it in some form.
The senators from the Moderate Dems Working Group who failed to return multiple phone calls inquiring about their stance on the bankruptcy provision were: Evan Bayh (D-Indiana), Tom Carper (D-Delaware), Blanch Lincoln (D-Arkansas), Herb Kohl (D-Wisconsin), Mary Landrieu (D-Louisiana), Joe Lieberman (I-Connecticut), Claire McCaskill (D-Missouri), Mark Pryor (D-Arkansas), Jeanne Shaheen (D-New Hampshire), Mark Warner (D-Virginia), Mark Begich (D-Alaska), Mark Udall (D-Colorado) and Michael Bennet (D-Colorado).
With a super majority in the senate, will the bill pass allowing judges to force loan modifications during bankruptcy proceedings? Or is the Mortgage Bankers Association lobby so powerful that this becomes a special interest power-play? Does the Specter departure change the complexion of this bill? Only time will tell.
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