One of the problems perpetuating the foreclosure crisis is the inability of lenders and borrowers to renegotiate those loans. Lenders don’t want to take care of vacant homes, and many borrowers could stay in their home if those ridiculous adjustable rates were locked into a reasonable fixed rate. Renegotiating those loans means more money to the lenders and a better deal (and a home) for the borrower. But because of securitization and other factors, few loans are being renegotiated.
One solution to this problem is to let bankruptcy judges modify those loans, and a House bill that includes such a “cramdown” provision will go to the floor tomorrow. But it is unlikely to survive without support from the public. Write to your senator and representative today and urge them to support the cramdown provision. They care what you think, and your support will help it survive.
House Package Addressing Foreclosure Crisis to Reach Floor on Thursday (PDF link) | Congressional Quarterly