As the shape of a political compromise on the Helping Families Save Their Homes in Bankruptcy Act emerges, I wonder why modifications for homeowners will come hedged with prerequisites and conditions.
For the past three decades, a debtor in bankruptcy could modify a mortgage on anything but his home. That included a vacation home. No need to seek a consensual modification first, be threatened with foreclosure, prove inability to pay. The law did not condition the bankruptcy judge’s ability to confirm such changes to the original contract.
But offer that same ability to American homeowners, a frightening percentage of whom are at risk of losing their homes, and the bankers, the moralists, and the conservatives protest. ‘Fraid I don’t understand.