Rep. John Conyers: 'Cram Downs' are Much-Needed, Fair

A bill that would allow bankruptcy judges to alter the terms of mortgages has passed a House panel.

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Rep. John Conyers, a Democrat from Michigan, took to the Op-Ed page of The Wall Street Journal Friday to rally support for his "cram down" legislation:

To those who claim that my bill will end up harming consumers by increasing the cost of credit, I would respectfully suggest that they are not taking account of the track record of the modern-day bankruptcy code.

For more than three decades, the bankruptcy code has permitted the very kind of court modification we are considering today, for every other form of secured debt, including loans secured by second homes, investment properties, luxury yachts, and jets. For over 20 years, this very kind of modification has been available for home mortgages already -- if the home is a family farm. There is no indication that this has in any way increased the cost of credit for any of these kinds of loans.


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