Legislative Proposals to Amend the Bankruptcy Code to Modify Loan Terms

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Proposed changes to the bankruptcy laws that would allow bankruptcy judges to change unilaterally the terms of many mortgage loans, including the loan balance, as part of Chapter 13 bankruptcy proceedings, would, MBA believes, increase mortgage rates by at last one and a half points. By granting judges this power, it would throw into question the value of the collateral that backs every mortgage made in this country -- the home. Even a temporary change would be interpreted by the market as an additional risk, which lenders' prices must reflect.

In addition, lenders will be forced to require higher down payments and charge higher costs at closing. All these increased costs would be necessary to account for the new risks that lenders will face when judges decide to change how much borrowers owe on their mortgages.

For more information, please see MBA's Cram Down Issue Brief.

Issues Update

Date
3/8/2009	MBA Chairman David Kittle's Op-Ed in the Atlanta Journal-Constitution
3/6/2009	Letter to MBA Members on House Passage of the Helping Families Save Their Homes Act
2/26/2009	MBA Summary of H.R. 1106
2/24/2009	MBA Letter, Oppose Bankruptcy Cram Down Provisions in H.R. 1106
2/24/2009	Joint Letter, Oppose Bankruptcy Cram Down Provisions in H.R. 1106
1/27/2009	Joint Letter, Opposition to Cram Down
1/22/2009	Joint Statement for the Record, Bankruptcy Cram Down
1/13/2009	HUD Responds to Cram Down: Shares MBA's Views
1/9/2009	Joint Letter, Opposition to Cram Down
12/16/2008	MBA Answers Senator Durbin's Question on Bankruptcy
12/16/2008	MBA Responds for the Record: Bankruptcy
11/19/2008	MBA Testifies on Bankruptcy Cramdown
4/22/2008	Joint Industry Coalition Advertisement: Bankruptcy Cramdown Would Hurt
4/10/2008	MBA Policy Correspondence: Letter to Congressman Frank on H.R. 3609
4/1/2008	Op-Ed by MBA Chairman David Kittle, CMB - Bankruptcy reform wrongly peddled as housing-crisis fix
3/31/2008	Joint Industry Letter to Senate Regarding Mortgage Bankruptcy
3/25/2008	Experts on Cramdown
3/5/2008	MBA Policy Correspondence: Letter to Senate Judiciary Committee
2/27/2008	Bankruptcy is a last-ditch resort not a first-rate remedy
2/26/2008	Statement of Administration Policy on S. 2636
2/15/2008	Letter to Reid & McConnell Opposing S. 2636
2/15/2008	CRS Report on Proposals for Legislation to Impose an Interest Rate Freeze/Reduction on Existing Mortgages
1/29/2008	MBA Testimony: Growing Mortgage Foreclosure Crisis: Identifying Solutions and Dispelling Myths
1/28/2008	MBA Policy Correspondence: Letter to Speaker of the House
1/23/2008	Joint Industry Letter to House Regarding Mortgage Bankruptcy
12/11/2007	Bankruptcy Coalition Letter in Opposition to H.R. 3609
12/4/2007	MBA Policy Correspondence: Letter to Senate Judiciary Committee
11/6/2007	Former Regulators Letter to House Judiciary Committee
10/30/2007	MBA Testimony: H.R. 3609, the Emergency Home Ownership and Mortgage Equity Protection Act of 2007
10/15/2007	MBA Policy Correspondence: Letter to House Judiciary Committee
10/5/2007	MBA Policy Correspondence: Oppose H.R. 3609
9/20/2007	House of Representatives Bankruptcy Bill, H.R. 3609

Additional Resources

MBA's Stop the Cram Down Resource Center »