The mortgage industry is already beginning to benefit from the Supreme Court's holding last week that bankruptcy law doesn't allow consumers to "cram down" their home mortgages, and analysts say a bill moving through Congress could help home lenders even more.
Credit-rating agencies say they are studying whether to reduce the current reserve requirement in mortgage-backed securities pools for potential bankruptcies. Fitch Investor Services Inc., for example, reaffirmed several days after the ruling its $100,000 borrower bankruptcy requirement for triple-A and double-A rated MBS. It also said it was thinking of reducing its reserve requirements for cramdowns because of the ruling made in Nobelman vs. American Savings Bank, No. 92-641.