No Bailout for Bankruptcy

Chicago Tribune (09/29/08); Hamburger, Tom
The final version of the $700 billion financial bailout plan excludes a provision that would have modified federal bankruptcy laws and made it easier for struggling borrowers to get new loan terms and keep their homes. The Mortgage Bankers Association teamed up with other banking, mortgage and housing industry groups to lobby against the proposed change in the Senate version of the bailout. "Authorizing write-downs of mortgages by bankruptcy judges will increase the risks of mortgage lending at a time when the market is already struggling and this will harm consumers by increasing the cost of credit and reducing its availability," read a joint e-mail from the coalition. Still, the bailout plan is said to include some language that is favorable for homeowners.