It really is a sad day for those facing foreclosure in this country. Strangely, it is probably not good news for the mortgage industry either that must now foreclose millions of homes and sell them at bargain basement prices. Worse of all, it is bad news for the housing market in that everyone will probably see their home prices reduced further.
The Senate has defeated legislation that would have let hundreds of thousands of debt-ridden homeowners seek mortgage relief in bankruptcy court.
President Barack Obama had said the bill was important to saving the economy and promised to push for its passage. But facing stiff opposition from banks, Obama did little to lean on lawmakers who worried it might spike interest rates.
The bill would have allowed bankruptcy judges to rewrite a person’s mortgage terms, if a bank refused to offer better terms based on income and home value. Only 45 senators voted in favor of the bill, with 51 senators opposed.
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