No Principle in Principal

From today's Tribune...

Congress is poised to give bankruptcy judges more power to modify primary home mortgages in an attempt to halt the foreclosure crisis, a move Democrats and housing advocates have been pushing for two years in the face of stiff opposition from Republicans and the mortgage industry.

The House of Representatives is expected to pass the legislation Thursday.

The measure would temporarily remove an oddity in bankruptcy law: Judges can reduce or cram down the principle on a vacation home, car, or boat, but they cannot do it to a mortgage for a primary residence.

As it is now, bankruptcy often results in higher mortgage payments on a primary residence because skipped payments and other fees are tacked on to the principle, for which homeowners are responsible under their repayment plans.