Friday, December 11, 2009

House of Representatives Turn Down Bankruptcy Vote

By Meredith Anderson,

The House of Representatives were quite busy on Friday as they passed the legislation to reform the nation's regulatory system by a vote of 223 to 202. The new legislation puts an end to taxpayer bailout by creating a single agency to oversee mortgages and outlaws predatory lending. With the overall proposed legislation was bankruptcy cramdown amendment proposed by Rep. John Conyers. This amendment was not favored by the House and rejected with a vote of 241 to 188. One of the main reason for the turn down was the fact that the House had past an almost identical bill back in March that was later turned down by the Senate. Another reason was the strong concerns of the mortgage banking community that stated that if passed the legislation would have further increased that cost of borrowers. There was not much released about the specifics for not including the cram down amendment in the overall package. If the past it would have helped with home foreclosures that are continuing to hurt our nation. Currently bankruptcy courts are allowed to reduce many forms of debt on boats, summer home, cars, boat, farm, but not the families primary residence. By rejecting this new clause the House state that bankruptcy courts are not allowed to reconstruct mortgages.