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Bankruptcy is no silver bullet in housing crisis
By Mike Lillis, Colorado Independent(Photo/the truth about../Flickr)
While packed with carrots encouraging mortgage lenders to modify troubled loans, President Barack Obama’s plan to stem the foreclosure crisis still awaits its stick: the empowerment of bankruptcy judges to alter the terms of primary mortgages.
(Photo/the truth about../Flickr)
That controversial measure, which will require Congressional action, is viewed by housing advocates as crucial to keeping families in their homes. Obama this week reiterated his support for the idea, but even the advocates warn that the bankruptcy provision by itself is no panacea for the foreclosure crisis.
“Bankruptcy reform alone won’t solve the problem,” said David Berenbaum, executive vice president of the National Community Reinvestment Coalition.
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