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House Passes Bill to Let Judges Rewrite Mortgages

WASHINGTON (AP) - A plan to help debt-strapped homeowners isn't
a sure thing as an even more divided Senate takes up the bill.
It faces the same industry opposition and reservations from
moderate Democrats that nearly derailed it in the House, where it
passed on Thursday.
The legislation would give bankruptcy judges power to reduce the
interest rate and principle on a home mortgage, something they
can't do now.
A group of Senate Democrats had cut a deal with Citigroup to
limit the measure to existing mortgages and cases where homeowners
had sought rewrites from their lenders.
A top Senate Democrat, Dick Durbin of Illinois, says he's
considering scaling back the bill even further to apply only to
subprime mortgages. That's another restriction the industry has
been seeking.
Supporters see such changes as fatal for chances of passage.


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