Lenders urged Congress on Thursday to expedite the bankruptcy process, saying long delays increase costs to consumers.

"Delays are of a particular concern to mortgage lenders because they can lead to the deterioration of the residential property," said Thomas H. Boone, managing director of portfolio services for Countrywide Home Loans Inc. "Often, by the time the automatic stay is lifted by the bankruptcy court and the lender is permitted to foreclose and sell the residence, the proceeds of the sale are insufficient to pay the mortgage loan in full."

Lenders recoup these losses by charging higher rates and fees, Mr. Boone told the House Judiciary commercial and administrative law subcommittee. "Any changes in the bankruptcy system that decrease the number of personal bankruptcies will ultimately reduce the cost of home mortgages," he said.

Earlier at the hearing, Navy Federal Credit Union president Brian L. McDonnell endorsed a proposed needs-based bankruptcy system that would require many debtors to repay at least some unsecured creditors.

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