Bankruptcy Out, A Whole Lot Else Could Be In House Housing Bill

A controversial measure that would allow bankruptcy judges to change mortgage terms for struggling homeowners won’t be in the housing package currently being assembled in the House, according to House Financial Services Chairman Barney Frank (D-Mass.).

“I think the Senate has made it clear that it doesn’t have the votes,” Frank said Thursday of the bankruptcy provision. Frank added that he supports the bankruptcy change himself. He is one of 82 co-sponsors of the stand-alone bill sponsored by Brad Miller (D-N.C.).

Senate Democrats stripped the provision from their own housing package earlier this month in order to win support from chamber Republicans. An earlier version of the bill that had the bankruptcy language in it failed to clear a GOP filibuster by 12 votes.

But Frank was optimistic that an ambitious list of other housing fixes could make it all into one package. Front and center, of course, is the chairman’s own proposal to use the Federal Housing Administration to encourage loan modifications in exchange for up to $300 billion in new mortgage guarantees. Frank’s panel is slated to mark up that bill next week.

Frank said there’s also a good chance that a final housing package would include a long-stalled bill to modernize the FHA, separate from the refinance proposal, and another to overhaul regulation of the so-called government-sponsored enterprises Fannie Mae and Freddie Mac.
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