President Obama kicked Senator Durbin’s bankruptcy bill with it’s “cramdown” forced loan modification provisions to help foreclosure victims, off his economic stimulus package. Friday, in a meeting the two decided Durbin’s bill could derail the passage of the more important recovery bill.

Cramdown Bill Ousted

The part of the bankruptcy bill President Obama was afraid of was the provision giving bankruptcy judges the power to “cramdown” the rate in a forced loan modification which has received a lot of cricism lately.

Many special interest groups are weighing in on this fight. The largest lobbyists opposing this new bankruptcy bill is the US Chamber of Commerce. We also know both the Mortgage Bankers Association and the Mortgage Brokers lobby oppose the bill as well. All told, over 10 special interests are against giving the bankruptcy court to “re-write” the mortgage terms of defaulting loans.

Senator Dick Durbin said on Friday in an AP story, that even though the bill won’t make it onto the stimulus package, Obama promised “…to attach the proposal to other “must pass” legislation-with the hope that supporters of the overall bill would not vote against it because of the bankruptcy provisions.”

I’ve got news for Durbin, Obama, foreclosure victims, and anyone else who thinks the bankers will let this “cramdown” bill pass…Keep Dreaming.

Well, this another indication, that everything is “business as usual” when this administration is leaving foreclosure victims out in the cold as much as the previous one.

Do we all still think an Obama administration is all that different?

Good Luck!

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