Democrats in the U.S. House of Representatives disagree on legislation to let bankruptcy judges reduce the principal and interest rate on mortgages for debt-strapped homeowners, the Associated Press reported February 26, 2009.
President Barack Obama supports the measure, the most controversial part of a broader housing package that had been expected to pass the House already.
The banking industry has lobbied hard against the measure, mounting a successful multimillion-dollar effort last year to kill the legislation.
"This year, mortgage industry players who are scrambling to narrow the scope of the measure to reduce its potential cost for banks have won some key concessions. House Democrats agreed to limit the measure to existing loans made before the bill is enacted and to borrowers who can show they tried other ways of modifying their home loans before resorting to bankruptcy, among other changes."
Banks want to go much further. Banks want to restrict the bill to subprime or other exotic loans only.
"Consumer advocates and most Democrats regard the measure as crucial to slowing the rapid rate of foreclosures. They say it's the only way to force mortgage holders — known as loan servicers — to take steps to help homeowners stay in their homes."
The mortgage industry contends, however, that the measure will impose steep and unpredictable costs on its companies, which will be forced to raise fees and interest rates for borrowers.
Industry lobbyists welcome the delay, which will give them time to press for a more narrow measure.
Should bankruptcy judges have these broad powers?
Read The Associated Press Article
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Their not feuding their taking care of business, that is just their way of doing it. We have complete control of the house and senate it is only ours to mess up.