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The cramdown legislation being fasttracked in Congress may cut back on the number of foreclosures in the country but the controversial proposal is already being opposed by bankers and lenders. The bill allows bankruptcy courts to dictate the lender as to the total amount owed by the homeowner to the lender to prevent a foreclosure. For example, you owe your lender $300,000 but the bank can tell your lender that since the property is only worth P$150,000 then that’s all you owe and need to pay to avoid foreclosure.
Once it becomes a law, the cramdown legislation will empower the courts to cram down or cut the interest rates as well…
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