The Senate today voted down the one common-sense solution that would have prevented over a million families from losing their homes to foreclosure ? allowing bankruptcy judges to modify home loans to fair market terms. This measure would have encouraged mortgage servicers to voluntarily restructure mortgages to make them affordable in much greater numbers, saving up to 1.7 million families from foreclosure. It also would have saved their neighbors from losing an additional $300 billion in reduced property values caused by these preventable foreclosures.
The banking industry, after receiving hundreds of billions of dollars in federal assistance, spent millions of dollars in its campaign against this measure. As a result of today's vote, foreclosures will continue to soar, the value of all homes will be diminished and the entire economy will be worse off.
"The mortgage crisis continues to worsen, and the need for this legislation will only grow," said Mike Calhoun, president of the Center for Responsible Lending. "Unfortunately, millions of homeowners and all Americans waiting for economic recovery will pay dearly for this delay."