Sen. Chuck Schumer (D-N.Y.) is not impressed with the new mortgage modification plan unveiled today by industry and the Bush administration.
Instead, he said lawmakers need to change the bankruptcy code to allow judges to reduce mortgage payments and keep people out of foreclosure, a proposal that industry fought to defeat several times this past year.
"These voluntary plans sound nice, but they don't do the job. No amount of incentives for investors can change the fact that a program like this will only really work if Fannie and Freddie hold the whole loan, which is true in too few cases. When the loan is chopped up into a million pieces and any investor can block a modification from happening, a program like this will only scratch the surface of the mortgage crisis. The only viable solution, and it is one we will take up under President-elect Obama, is to modify the bankruptcy code," Schumer said in a statement.
The full press release on the new foreclosure prevention plan is after the jump.
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