In my column a few weeks ago, I noted that the pressure from congressional Democrats had forced President Obama to commit to supporting major bankruptcy reforms that would allow judges to force banks to renegotiate their mortgages so that homeowners can avoid foreclosure. Now, Obama is out in Red America bragging about his commitment, as he should:
President Barak Obama said on Monday that he supported changing the rules to let judges modify first mortgages to prevent home foreclosures. Obama made his comments at a townhall meeting in Elkhart Indiana, as he campaigned for an $800 billion economic stimulus package being debated by lawmakers.
"If you are like most people, including me, and you've got one house ... it turns out that under current law you can't modify that mortgage if you are in bankruptcy," Obama told a townhall meeting as he campaigned for an $800 billion economic stimulus package being debated by lawmakers.
"That makes no sense ... that is forcing a lot of people into foreclosure," Obama said. "This is a piece of legislation that I strongly support."
This "cramdown" legislation is critically important. It should have been in the stimulus bill to begin with, but at minimum, it should be passed immediately after the stimulus bill passes. (h/t Atrios)
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