Today on the first day of the new 111th Congress, Senator Richard Durbin (D, IL) introduced S. 61, the "Helping Families Save Their Homes in Bankruptcy Act." Representative John Conyers (D, MI), chairman of the House Judiciary Committee, introduced identical legislation in the House in H.200. The bills propose various changes to the Bankruptcy Code to allow certain modifications of mortgages on principal residences, including as to reduction in amount amount, modification in interest rates, and extension of length of payment. It is reported that Representative Brad Miller (D, NC) will soon introduce another bill with a similar plan for mortgage modification.
It is reported that plans for moving the legislation are somewhat unclear although there are efforts being made to include the legislation in the economic recovery plan now being drafted by Congress and or in other broader packages expected to move early in the new Congress such as "TARP 2". The plan could become law quickly if it is included in an economic stimulus package being drafted now by congressional leaders or it could take many months to work its way through Congress.
It is also noted that today 23 state attorneys general sent letters to Congress endorsing mortgage modification in bankruptcy.
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