House and Senate lawmakers reintroduced legislation to let judges modify mortgages in bankruptcy proceedings Tuesday, the first day of the 111th Congress.
The bill, introduced by the Senate's No. 2 Democrat, Sen. Dick Durbin of Illinois, and House Judiciary Committee Chairman John Conyers, D-Mich., is considered a major threat by the financial services industry. Both lawmakers introduced the same bill in the previous Congress.
Sen. Durbin has said his goal is to include bankruptcy reform in the massive economic stimulus package President-elect Barack Obama has set as his first legislative goal.
"For nearly two years we've heard dire predictions about the housing crisis and its effects on the economy. Sadly, they have not only come true, but have been far worse than anyone imagined," Sen. Durbin said in a press release. "The question that faces us now is this: After committing over one trillion dollars in taxpayer money to address the financial crisis, why don't we take a step that would indisputably reduce foreclosures and that would cost taxpayers nothing?"