The chief bankruptcy judge in Kansas says he and his colleagues are in the best position to help troubled homeowners, if they’re given the authority they need by a new bill going through Congress.
The bill, which Tuesday passed the U.S. House Judiciary Committee, would allow judges to reduce, or “cram down,” mortgages to meet market values for homeowners who owe more on their mortgages than their houses are worth.
“For 30 years bankruptcy judges have been denied the power to modify secured loans on primary residences,” said Judge Robert Nugent of Wichita. “But I think it makes sense. We have the power to do it with commercial debtors and we adjust the value of other assets all the time.”
Previous attempts to get judges the power to alter mortgages, which proponents said could help curb foreclosures, has faced fierce fights from the banking industry. But this time, lending giant Citigroup is supporting the measure.
Watch Kansas.com for more details on this story.
