Consumers need a new type of bankruptcy that would better aid homeowners and be fairer for mortgage bond investors than the Obama administration's loan-modification program, BlackRock Inc. Vice Chairman Barbara Novick said.

BlackRock, the world's largest asset manager, proposes creating a bankruptcy option under which terms of a consumer's mortgage can be eased, though only after other debts are eliminated, Novick said in an interview. Judges would need to follow a formulaic approach, she said.

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