With the opening of the 111th Congress this week, Democratic lawmakers have reintroduced legislation that, if passed, would allow for bankruptcy cramdowns, according to published reports.
Sen. Richard Durbin, D-Ill., and Rep. Brad Miller, D-N.C., have introduced the legislation, which is designed to reduce foreclosures by allowing judges the authority to eliminate mortgage debt. A Durbin spokesperson says he plans to attach the legislation to the expected economic stimulus package, MarketWatch reports.
Democrats in the House and Senate twice tried to pass similar legislation last year, once in the Housing and Economic Recovery Act of 2008 and later in the Emergency Economic Stabilization Act, but they ran into opposition from Republican leaders. President-elect Obama said during his presidential campaign that he would try to pass cramdown legislation upon taking office.
The MarketWatch report also notes that Obama co-sponsored Durbin's Helping Families Save Their Homes in Bankruptcy Act in 2008, Durbin's second attempt to pass the act.