“Cramdown” became the term used to refer to an action by a judge in a Chapter 13  Bankruptcy.  It would give the authority to the Judge to reduce what a person owes on credit cards, auto, boat and student loans – even a second home mortgage.  Under current law, they cannot cut the mortgage debt on the principal residence.  That allows lenders to foreclose on delinquent homeowners to recover what they are owed.  Some political leaders in the house and Senate have been pushing for a change in the bankruptcy law to include principal residence loans, i.e., “judicially modified”.  These were considered “crammed down” by the courts.

It has been argued that banks and mortgage companies too often have been unwilling to offer delinquent borrowers serious modifications because they have to foreclosure option.

The final outcome should be interesting, probably unrecognizable!