Mortgage Cramdown Fails in Senate
The hotly-contested mortgage cramdown legislation, passed in the House last month as HR 1106, the "Helping Families Save Their Homes in Bankruptcy Act of 2009," has failed in the Senate.
Among other significant changes, the failed legislation would have permitted a Chapter 13 bankruptcy plan to: (1) modify the rights of claim holders with respect to a claim for a loan originated before the effective date of the Act and secured by a security interest in the debtor's principal residence that is the subject of a foreclosure notice; and (2) deny debtor liability for certain fees and charges incurred while the bankruptcy case is pending and arising from a debt secured by the debtor's principal residence, unless the claim holder observes specified requirements. The legislative summary detailed the bill's other proposed changes, including amendments to the HOPE for Homeowners plan.
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