House Democrats have agreed to a compromise on pending bankruptcy/cramdown-related legislation that gives preference to interest rate reductions over reducing the loan amount.
According to combined press reports, principal reductions would still be allowed but lenders would have to share any profit on the eventual sale of their residence with the owner of the mortgage.
Also, limits would be placed on cramdowns if the homeowner has already modified his loan. Details were still being worked on at press time.
The compromise comes just as new figures show that 8.3 million homes are now worth less than their loan value with another 2.2 million units approaching a negative equity position.
