Key House Panel Backs Measure Allowing Judges to Modify Mortgages

The Washington Post reports:

A measure allowing bankruptcy judges to modify the mortgages of troubled homeowners, including cutting the principal they owe, cleared a key congressional committee yesterday.

Under legislation passed by the House Judiciary Committee, a bankruptcy judge could change the terms of a loan by reducing its interest rate, extending its length, or lowering the principal or loan balance. These are known as "cramdown" provisions.