The Problems With The Mortgage Bailout Plan

Law360, New York (April 13, 2009, 12:00 AM EDT) -- One of the many proposals that have been advanced to deal with the current economic crisis, to provide relief to homeowners who are “upside down” in their mortgage loans — owing loan balances greater than the depressed value of the property — is now being considered by the Senate after being passed by the House.

The plan — the Helping Families Save Their Homes Act of 2009 — is to give bankruptcy judges the power to “cram down” reductions in home loan balances, thus forcing lenders...
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