Democrats are pressing ahead with efforts to provide relief for bankrupt homeowners facing foreclosure, as the House Judiciary Committee has approved legislation to allow bankruptcy courts to modify their mortgages and a similar bill has been introduced in the Senate. Under current law, courts can't modify loans secured by a debtor's principal residence, a provision originally intended to make home financing more widely available by assuring lenders that their security won't be impaired. However, critics contend that the result is to give homeowners less protection than other debtors, and they dispute the assertion that allowing so-called cramdowns on home loans will adversely affect the availability of mortgage credit.
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